UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                -----------------
                                    FORM 10-Q
                                -----------------

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

                For the quarterly period ended September 30, 2008

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

            For the transition period from __________ to ___________

                        Commission file number: 000-33327

                         NEXHORIZON COMMUNICATIONS, INC.
                (Name of the Registrant Specified in its Charter)


               Delaware                               13-4151225
---------------------------------------- --------------------------------------
    (State or other jurisdiction of      (IRS Employer Identification Number)
     incorporation or organization)

                   9737 Wadsworth Pkwy, Westminster, CO 80021
                     (Address of principal executive office)

                                 (303) 404-9700
                                 --------------
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter  period that the registrant was required
to file such reports),  and (2) has been subject to the filing  requirements for
the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the  registrant is a large  accelerated  file, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer [  ]                              Accelerated filer [  ]
Non-accelerated filer  [  ] (Do not check if a smaller reporting company)
Smaller reporting company [X]

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

Indicate  the number of share  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

As of October 31, 2008, there were 40,262,151 shares of the registrant's  common
stock issued and outstanding.


<PAGE>


                         NEXHORIZON COMMUNICATIONS, INC.
                       2008 QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements     (Unaudited)                            Page
                                                                           ----

           Condensed Consolidated Balance Sheets -
                  September 30, 2008 and December 31, 2007                  F-1

           Condensed Consolidated Statements of Operations  -
                  Nine months ended September 30, 2008 and 2007             F-2

           Condensed Consolidated Statements of Operations  -
                  Three months ended September 30, 2008 and 2007            F-3

           Condensed Consolidated Statements of Cash Flows -
                  Nine months ended September 30, 2008 and 2007             F-4

           Notes to Condensed Consolidated Financial Statements             F-6

Item 2.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                   1

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
                  - Not Applicable                                            3

Item 4.    Controls and Procedures                                            4

Item 4T.   Controls and Procedures                                            4


PART II - OTHER INFORMATION

Item 1.    Legal Proceedings                                                  5

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds        6

Item 3.    Defaults Upon Senior Securities - Not Applicable                   6

Item 4.    Submission of Matters to a Vote of Security Holders - Not
                  Applicable                                                  6

Item 5.    Other Information - Not Applicable                                 7

Item 6.    Exhibits                                                           7

SIGNATURES                                                                    8



<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements

<TABLE>
<CAPTION>

                                                              NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                         CONDENSED CONSOLIDATED BALANCE SHEETS

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


                                                                        September 30,         December 31,
                                                                             2008                 2007
                                                                       -----------------    ------------------
                                                                         (Unaudited)
<S>                                                                    <C>                  <C>

Current assets:
ASSETS

Cash                                                                           $ 76,346                   $ -
Accounts receivable, net of allowance of $23,273 and
        $11,543, respectively                                                   126,749                14,524
Prepaid expenses and other current assets                                       128,457               109,468
                                                                       -----------------    ------------------
            Total current assets                                                331,552               123,992

Property and equipment, net                                                   3,433,241               361,472

Other assets                                                                     14,244                 7,538
Intangibles, net of accumulated amortization of $25,150
        and $17,605, respectively                                               175,450               182,995
                                                                       -----------------    ------------------

                                                                            $ 3,954,487             $ 675,997
                                                                       =================    ==================


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
       Accounts payable                                                     $ 1,908,084           $ 1,758,003
       Accrued expenses                                                         218,025               262,494
       Customer deposits                                                         64,059                     -
       Current portion of notes payable, net of unamortized
       discounts of $1,169,520 and $46,607, respectively                      1,110,274               472,512
                                                                       -----------------    ------------------
            Total current liabilities                                         3,300,442             2,493,009

Notes payable and accrued interest, net of current portion                    2,214,059             1,157,687
Derivative and warrant liabilities                                            1,350,000                     -
                                                                       -----------------    ------------------

            Total liabilities                                                 6,864,501             3,650,696
                                                                       -----------------    ------------------

Commitments and contingencies

Stockholders' deficit:
       Preferred Series A stock, $0.0001 par value; 4,250,000
       shares authorized, 4,250,000 and 0 shares issued,
       respectively and 2,500,000 and 0 shares outstanding,
       respectively (liquidation preference of $2,500,000 at
       September 30, 2008)                                                          250                     -
       Preferred Series B stock, $0.0001 par value, 5,500,000
       shares authorized, 0 shares issued and outstanding                             -                     -
       Preferred Series C stock, $0.0001 par value, 15,250,000
       shares authorized, 0 shares issued and outstanding                             -                     -
       Common stock, $0.0001 par value, 225,000,000 shares authorized,
       40,262,151 and 21,341,418 shares issued and outstanding,
       respectively                                                               4,026                 2,134
       Additional paid in capital                                            11,021,237             8,746,942
       Accumulated deficit                                                  (13,935,527)          (11,723,775)
                                                                       -----------------    ------------------

       Total stockholders' deficit                                           (2,910,014)           (2,974,699)
                                                                       -----------------    ------------------

                                                                            $ 3,954,487             $ 675,997
                                                                       =================    ==================


--------------------------------------------------------------------------------------------------------------
F-1                                      See accompanying notes to condensed consolidated financial statements
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                     (UNAUDITED)

                                                                         For The Nine Months Ended September 30,


----------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                     <C>
                                                                            2008                    2007
                                                                     -------------------     -------------------

Net sales                                                                   $ 1,470,943               $ 262,019

Cost of sales                                                                   420,557                 134,584
                                                                     -------------------     -------------------

Gross profit                                                                  1,050,386                 127,435
                                                                     -------------------     -------------------

Operating expenses:
Salaries and related expenses                                                   772,715                 254,322
Other general and administrative expenses                                     1,627,080                 616,947
Impairment of goodwill                                                                -               1,200,000
                                                                     -------------------     -------------------

          Total operating expenses                                            2,399,795               2,071,269
                                                                     -------------------     -------------------

Loss from operations                                                         (1,349,409)             (1,943,834)

Other income (expense):
   Interest expense                                                            (829,922)               (304,568)
   Loss on settlement of debt, net                                              (49,500)                      -
   Other income                                                                  17,079                       -
                                                                     -------------------     -------------------

           Total other expense                                                 (862,343)               (304,568)
                                                                     -------------------     -------------------

Net loss                                                                   $ (2,211,752)           $ (2,248,402)
                                                                     ===================     ===================


Basic and diluted loss per common share                                         $ (0.07)                $ (0.34)
                                                                     ===================     ===================

Weighted average number of common shares outstanding, basic
 and diluted                                                                 29,742,721               6,638,766
                                                                     ===================     ===================











----------------------------------------------------------------------------------------------------------------
F-2                                        See accompanying notes to condensed consolidated financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                   NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                        (Unaudited)

                                                                           For The Three Months Ended September 30,

-------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                      <C>

                                                                             2008                     2007
                                                                      --------------------     --------------------

Net sales                                                                       $ 522,512                $ 108,679

Cost of sales                                                                      76,675                   33,168
                                                                      --------------------     --------------------

Gross profit                                                                      445,837                   75,511
                                                                      --------------------     --------------------

Operating expenses:
Salaries and related expenses                                                     286,072                  168,754
Other general and administrative expenses                                         506,542                  511,776
                                                                      --------------------     --------------------

         Total operating expenses                                                 792,614                  680,530
                                                                      --------------------     --------------------

Loss from operations                                                             (346,777)                (605,019)

Other income (expense):
  Interest expense                                                               (347,880)                (203,226)
  Other income                                                                     17,079                        -
                                                                      --------------------     --------------------
         Total other expense                                                     (330,801)                (203,226)
                                                                      --------------------     --------------------

Net loss                                                                       $ (677,578)              $ (808,245)
                                                                      ====================     ====================



Basic and diluted loss per common share                                           $ (0.02)                 $ (0.06)
                                                                      ====================     ====================


Weighted average number of common
shares outstanding - basic and diluted                                         35,448,219               14,397,024
                                                                      ====================     ====================











-------------------------------------------------------------------------------------------------------------------
F-3                                           See accompanying notes to condensed consolidated financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                             NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES


                                                                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                  (Unaudited)

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

                                                                                         Nine Months Ended September 30,
                                                                                      ---------------------------------------
                                                                                            2008                 2007
                                                                                      ------------------  -------------------
<S>                                                                                   <C>                 <C>

Cash flows from operating activities:
      Net loss                                                                             $ (2,211,752)        $ (2,248,402)
      Adjustments to reconcile net loss to net cash (used in) provided by
        operating activities:
         Depreciation and amortization                                                          572,078               48,999
         Common stock issued to pay operating expenses                                        1,014,990              310,806
         Net interest accrued on notes payable                                                  118,302                    -
         Gain on extinguishment of debt                                                        (188,000)                   -
         Common stock issued to settle put option related to note payable                       237,500                    -
         Amortization of the estimated fair value of beneficial conversion features
            and warrants                                                                              -              139,361
         Amortization of common stock issued for prepaid services                                     -                7,500
         Goodwill impairment                                                                          -            1,200,000
         Changes in operating assets and liabilities:
            Accounts receivable                                                                (112,225)             (16,729)
            Prepaid expenses and other current assets                                           (18,989)              39,249
            Customer deposits                                                                    64,059                    -
            Accounts payable and accrued expenses                                               293,612              440,359
                                                                                      ------------------  -------------------

        Net cash used in operating activities                                                  (230,425)             (78,857)
                                                                                      ------------------  -------------------

Cash flows from investing activities:
      Purchase of cable company assets                                                         (750,000)                   -
      Cash acquired in acquisition                                                                    -               27,398
      Purchase of property and equipment                                                       (306,267)             (18,304)
                                                                                      ------------------  -------------------

        Net cash (used in) provided by investing activities                                  (1,056,267)               9,094
                                                                                      ------------------  -------------------

Cash flows from financing activities:
      Proceeds from the issuance of common stock                                                  8,000               46,000
      Proceeds from issuance of notes payable, net of issuance costs                          1,670,000               25,000
      Payments on notes payable                                                                (314,962)              (1,623)
                                                                                      ------------------  -------------------

        Net cash provided by financing activities                                             1,363,038               69,377
                                                                                      ------------------  -------------------

Increase (decrease) in cash                                                                      76,346                 (386)

Cash at beginning of period                                                                           -                  386
                                                                                      ------------------  -------------------

Cash at end of period                                                                          $ 76,346                  $ -
                                                                                      ==================  ===================

Supplemental disclosure of cash flow information -
      Cash paid during the period for:
         Interest                                                                             $ 240,155                  $ -
                                                                                      ==================  ===================
         Income taxes                                                                               $ -                  $ -
                                                                                      ==================  ===================

F-4

<PAGE>

Supplemental schedule of noncash investing and financing activities:
      Goodwill acquired in acquisition                                                              $ -          $ 1,200,000
                                                                                      ==================  ===================
      Acquisition of fixed assets included in accounts payable                                      $ -            $ 148,138
                                                                                      ==================  ===================
      Fixed assets acquired in acquisition                                                          $ -             $ 46,200
                                                                                      ==================  ===================
      Intangible asset acquired in acquisition                                                      $ -            $ 100,000
                                                                                      ==================  ===================
      Estimated fair value of beneficial conversion feature and warrants                            $ -             $ 69,394
                                                                                      ==================  ===================
      Estimated fair value of common stock issued upon conversion of accounts payable               $ -             $ 16,801
                                                                                      ==================  ===================
      Reclassification of accrued interest to note payable                                          $ -            $ 183,233
                                                                                      ==================  ===================
      Issuance of note payable for prepaid consulting                                               $ -            $ 124,000
                                                                                      ==================  ===================
      Issuance of common stock for prepaid consulting                                               $ -             $ 60,000
                                                                                      ==================  ===================
      Fair value of put option accounted for as a discount on related debt                  $ 1,350,000                  $ -
                                                                                      ==================  ===================
      Conversion of notes payable to common stock                                             $ 615,947            $ 164,456
                                                                                      ==================  ===================
      Cable company assets acquired for:
          Notes payable                                                                     $ 1,750,000                  $ -
                                                                                      ==================  ===================
          Preferred stock                                                                     $ 400,000                  $ -
                                                                                      ==================  ===================
      Issuance of notes payable to acquire equipment                                           $ 49,221                  $ -
                                                                                      ==================  ===================

-----------------------------------------------------------------------------------------------------------------------------
F-5                                                     See accompanying notes to condensed consolidated financial statements
</TABLE>


<PAGE>



                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

NexHorizon Communications,  Inc. (the "Company") was incorporated in Delaware on
January 16, 2001. Prior to January 29, 2007, NexHorizon Communications was named
Y-Tel International,  Inc. ("Y-Tel").  On January 29, 2007, Y-Tel International,
Inc. changed its name to NexHorizon  Communications,  Inc.  ("NexHorizon" or the
"Company" hereafter).

The  Company's  mission is to  identify  and  acquire a series of  strategically
targeted  rural  cable  systems  and  networks.  The  Company has and intends to
continue to selectively  acquire,  upgrade and consolidate  the  capabilities of
these  systems  such that the sum of the whole will be  greater  than its parts.
Each acquired system will expand its basic cable TV services to include Digital,
Video on  Demand  ("VoD"),  Pay per View,  High-speed  Internet,  and  Telephone
through either its existing  cable network or WiFi  ("Wireless  Fidelity")  last
mile strategies.

In January 2008, the Company completed its acquisition of two cable TV companies
located in the San Diego  metropolitan  area (see Note 2). In October 2008,  the
Company also  acquired  two  additional  cable TV systems  located in the Tulsa,
Oklahoma metropolitan area (see Note 8).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared by the  Company in  accordance  with  accounting  principles  generally
accepted  in the United  States of America for  interim  financial  information.
These  principles are consistent in all material  respects with those applied in
the Company's financial  statements  contained in the Company's annual report on
Form  10-KSB  for  the  year  ended  December  31,  2007,  and  pursuant  to the
instructions  to Form 10-Q and Item 8-03 of Regulation  S-K  promulgated  by the
United States  Securities and Exchange  Commission  ("SEC").  Interim  financial
statements  do not  include all of the  information  and  footnotes  required by
accounting  principles  generally  accepted in the United  States of America for
complete financial  statements.  In the opinion of management,  the accompanying
unaudited condensed  consolidated  financial  statements contain all adjustments
(all of which are of a normal  recurring  nature,  including the  elimination of
intercompany  accounts)  necessary  to present  fairly the  financial  position,
results of operations  and cash flows of the Company for the periods  indicated.
Interim results of operations are not  necessarily  indicative of the results to
be expected  for the full year or any other  interim  periods.  These  unaudited
condensed  consolidated  financial statements should be read in conjunction with
the financial statements and footnotes thereto contained in the Company's annual
report on Form 10-KSB for the year ended December 31, 2007.

Going Concern

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of  business.  The  Company  has a working  capital  deficit of
$2,968,890 at September  30, 2008 and has incurred a net loss of $2,211,752  and
negative  cash flows from  operations  of $230,425  during the nine months ended
September 30, 2008, which raise  substantial doubt about its ability to continue
as a going concern.  Management  recognizes the Company must generate additional
resources to enable it to continue operations. The Company will continue to seek
working  capital through the public  markets.  The successful  outcome of future
fund  raising  activities  cannot be  determined  at this time,  and there is no
assurance that, if achieved,  the Company will have sufficient  funds to execute
its intended business plan or generate positive operating results.

F-6

<PAGE>



                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
(Continued)


Principles of Consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
NexHorizon  Communications,   Inc.  and  its  wholly  owned  subsidiaries.   All
significant  intercompany  transactions  and balances  have been  eliminated  in
consolidation.

Fair Value of Financial Instruments

The  Company's  financial  instruments,  including  cash,  accounts  receivable,
accounts  payable,  accrued  expenses and certain notes  payable,  have carrying
amounts that approximate  their fair values,  except for the Debenture (see Note
4), for which an equivalent instrument was not available.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of the contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting periods.  Significant estimates made by management include,
among others, the realizability of accounts  receivable,  property and equipment
and intangibles,  and the valuation of stock, options, warrants and deferred tax
assets. Actual results could differ from these estimates.

Concentration of Credit Risk and Foreign Operations

Financial instruments which potentially subject the Company to concentrations of
credit  risk  consist of cash.  The  Company  places its cash with high  quality
financial  institutions  and at times may exceed the Federal  Deposit  Insurance
Corporation  ("FDIC") $100,000  insurance limit. At September 30, 2008 and 2007,
the  Company  did not have any  accounts  with  balances  in  excess of the FDIC
insurance limits.

During the nine months ended  September 30, 2008 and 2007,  the Company  offered
its services  predominantly to rural customers  located within the United States
and extends credit based on an evaluation of a customer's  financial  condition,
generally  without  collateral.  Exposure  to losses on accounts  receivable  is
principally  dependent  on each  customer's  financial  condition.  The  Company
monitors its exposure for credit losses and maintains allowances for anticipated
losses, if required. Although the Company expects to collect amounts due, actual
collections may differ from the estimated  amounts.  The Company does not expect
any customer to exceed 10% of its sales or total accounts receivable.

Property and Equipment

Property and equipment are stated at cost, and are being  depreciated  using the
straight-line  method over the  estimated  useful  lives of the related  assets,
ranging from three to fifteen years. Maintenance and routine repairs are charged
to expense as incurred. Significant renewals and betterments are capitalized. At
the time of retirement or other disposition of property and equipment,  the cost
and  accumulated  depreciation  are removed from the accounts and any  resulting
gain or loss is reflected in the statement of operations.

F-7

<PAGE>


                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
(Continued)

Intangibles

Identifiable  intangibles acquired in connection with business  acquisitions are
recorded  at their  respective  fair  values.  Deferred  income  taxes have been
recorded to the extent of  differences  between the fair value and the tax basis
of the assets  acquired and  liabilities  assumed.  The  estimated  amortization
expense for the next five years is $10,060 per year. For each of the nine months
ended  September 30, 2008 and 2007,  amortization  expense was $7,545,  which is
recorded in other  general and  administrative  expenses.  For each of the three
months ended September 30, 2008 and 2007, amortization expense was $2,515.

Long-Lived Assets

The Company's management assesses the recoverability of its long-lived assets by
determining  whether the depreciation and amortization of long-lived assets over
their remaining lives can be recovered  through  projected  undiscounted  future
cash flows. The amount of long-lived asset impairment, if any, is measured based
on fair  value and is charged to  operations  in the period in which  long-lived
asset  impairment  is determined by  management.  As of September 30, 2008,  the
Company  determined  that no impairment of its  long-lived  assets was required.
There can be no assurance,  however,  that market  conditions will not change or
demand for the Company's products and services will continue, which could result
in impairment of long-lived assets in the future.

Revenue Recognition

The Company  recognizes  revenue in accordance  with Staff  Accounting  Bulletin
("SAB") No. 101, Revenue Recognition in Financial Statements,  as revised by SAB
No. 104. As such, the Company recognizes revenue when persuasive  evidence of an
arrangement exists, services have been performed,  the price is fixed or readily
determinable  and  collectibility  is probable.  Sales are recorded net of sales
discounts.  To date,  the Company's  revenue is generated  primarily  from cable
television  services whereby the revenue is recognized during the month in which
the service is rendered.

Stock-Based Compensation

At September 30, 2008, the Company had two  stock-based  compensation  plans. No
stock-based  employee  compensation  cost was  recognized  in the  statements of
operations for the nine months ended  September 30, 2008 and 2007 as all options
granted to employees  under the plans were fully vested prior to January 1, 2006
and none are outstanding.

The Company  recorded  stock-based  compensation  under  Statement  of Financial
Accounting  Standards  ("SFAS") No.  123(R),  Share Based  Payment.  The Company
calculates stock-based  compensation by estimating the fair value of each option
using the  Black-Scholes  option pricing model.  The Company's  determination of
fair value of share-based  payment awards are made as of their  respective dates
of grant using that option pricing model and is affected by the Company's  stock
price as well as assumptions regarding a number of subjective  variables.  These
variables  include,  but are not limited to the Company's  expected  stock price
volatility  over the term of the awards and actual and projected  employee stock
option exercise behavior.  The Black-Scholes  option pricing model was developed
for use in  estimating  the value of traded  options  that  have no  vesting  or
hedging restrictions and are fully transferable.  Because the Company's employee

F-8

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
(Continued)

stock options have certain characteristics that are significantly different from
traded  options,  the  existing  valuation  models may not  provide an  accurate
measure of the fair value of the Company's employee stock options.  Although the
fair value of employee  stock options is determined in accordance  with SFAS No.
123(R) using an  option-pricing  model,  that value may not be indicative of the
fair value observed in a willing  buyer/willing  seller market transaction.  The
calculated  compensation  cost will be recognized on a straight-line  basis over
the vesting period of the option.

The Company has issued stock options to employees and  directors,  with the only
condition  for  vesting are  continued  employment  or service  with the Company
during the related  vesting  period.  Option awards are granted with an exercise
price deemed  appropriate  by the board of  directors.  Prior to the adoption of
SFAS No. 123(R), the Company presented all tax benefits of deductions  resulting
from the exercise of stock  options as operating  cash flows in the statement of
cash flows.  Statement  123(R)  requires the cash flows  resulting  from the tax
benefits  resulting  from tax  deductions  in  excess of the  compensation  cost
recognized for those options  (excess tax benefit) to be classified as financing
cash  flows.  As there were no stock  options  exercised  during the nine months
ended  September  30,  2008 and 2007,  there was no excess  tax  benefit  to the
Company.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company's common stock for non-cash consideration have been
assigned a dollar amount  equaling  either the market value of the shares issued
or the value of consideration  received whichever is more readily  determinable.
The  majority  of the  non-cash  consideration  received  pertains  to  services
rendered by  consultants  and others and has been valued at the market  value of
the shares  issued.  In certain  issuances,  the Company may  discount the value
assigned to the stock issued for illiquidity and restrictions on resale.

The Company's accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services  follows the  provisions  of Emerging
Issues Task Force ("EITF") No. 96-18, Accounting for Equity Instruments That are
Issued to Other Than  Employees for Acquiring,  or in Conjunction  with Selling,
Goods or  Services  and EITF  No.  00-18,  Accounting  Recognition  for  Certain
Transactions  Involving Equity Instruments Granted to Other Than Employees.  The
measurement  date  for the  fair  value  of the  equity  instruments  issued  is
determined at the earlier of (i) the date at which a commitment for  performance
by the  consultant or vendor is reached or (ii) the date at which the consultant
or vendor's performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting  agreement.  In accordance to EITF 00-18, an asset acquired in
exchange for the issuance of fully vested,  non-forfeitable  equity  instruments
should not be presented or  classified  as an offset to equity on the  grantor's
balance sheet once the equity instrument is granted for accounting purposes.

Loss Per Share

Basic  earnings  per share  ("BEPS") is computed by dividing  loss  available to
common  stockholders by the weighted average number of outstanding common shares
during the period of  computation.  Diluted  earnings per share  ("DEPS")  gives
effect to all dilutive  potential common shares outstanding during the period of
computation.  The  computation of DEPS does not assume  conversion,  exercise or
contingent  exercise of securities  that would have an  anti-dilutive  effect on
earnings.  All potentially dilutive shares,  approximately  3,688,320 shares and
1,130,000  shares  for the nine  months  ended  September  30,  2008  and  2007,
respectively,  have been excluded  from diluted loss per share,  as their effect
would be anti-dilutive for the periods then ended.

Beneficial Conversion Feature

The  convertible  features of certain  convertible  notes  provide for a rate of
conversion  that  is  below  market  value  (see  Note  6).  Such  features  are
characterized as a "beneficial conversion feature" ("BCF"). Pursuant to EITF No.
98-5 Accounting For Convertible  Securities with Beneficial  Conversion Features
or Contingently  Adjustable Conversion Ratio and EITF No. 00-27,  Application of
EITF Issue No. 98-5 To Certain Convertible Instruments,  the relative fair value
of the BCF  has  been  recorded  as a  discount  from  the  face  amount  of the
respective  debt  instrument.  The Company is amortizing  the discount using the
effective interest method through maturity of such instrument.

F-9

<PAGE>


                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
(Continued)

Derivative Financial Instruments

The Company has derivative  financial  instruments  which consist of the put and
call  options  on the  warrant  related  to the  Debenture  (see  Note  4).  The
accounting  treatment of  derivative  financial  instruments  requires  that the
Company record the  derivatives at their fair values as of the inception date of
the agreements and at fair value as of each  subsequent  balance sheet date. Any
change  in  fair  value  of  the   derivatives   and  warrants  is  recorded  as
non-operating,  non-cash  income or expense at each reporting  date. If the fair
value is higher at the subsequent  balance sheet date, the Company will record a
non-operating,  non-cash  charge.  If the fair value is lower at the  subsequent
balance sheet date, the Company will record non-operating,  non-cash income. For
the nine months ended September 30, 2008,  there has been no change in the value
of the derivative liability.

Extinguishment of Debt

During the nine months ended September 30, 2008 and 2007, the Company recorded a
gain from the  extinguishment  of  certain  accounts  payable  of  approximately
$188,000 and $0, respectively. The accounts payable are related to the Company's
old international  telecommunications operations that were not paid. The Company
has recorded this gain as a loss on settlement of debt,  net in other income for
the nine months ended September 30, 2008.

Reclassification.

During the nine months ended September 30, 2008, the gain on  extinguishment  of
debt of $188,000 was  reclassified in the condensed  consolidated  statements of
operations from other general and administrative  expenses to loss on settlement
of debt,  net in other income  (expense)  and  interest  expense of $104,000 was
reclassified from other general and administrative expenses to interest expense.

New Accounting Pronouncements

In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements  SFAS
No. 157 defines fair value,  establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands disclosures about
fair  value   measurements.   This  statement  applies  under  other  accounting
pronouncements  that require or permit fair value measurement where the FASB has
previously  determined  that  under  those  pronouncements  fair  value  is  the
appropriate  measurement.  This  statement  does not  require any new fair value
measurements  but  may  require  companies  to  change  current  practice.  This
statement is effective for those fiscal years  beginning after November 15, 2007
except that the FASB has issued a one-year  deferral  of fair value  measurement
requirements for non-financial assets and liabilities. The Company's adoption of
SFAS No. 157 did not have a material impact on its financial position or results
of operations.

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial  Assets and Financial  Liabilities.  SFAS No. 159 permits  entities to
choose to measure, on an item-by-item basis, specified financial instruments and
certain  other  items at fair  value.  Unrealized  gains and losses on items for
which the fair value  option has been  elected  are  required  to be reported in

F-10

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
(Continued)

earnings at each  reporting  date.  SFAS No. 159 is  effective  for fiscal years
beginning  after  November 15, 2007,  the provisions of which are required to be
applied  prospectively.  The  Company's  adoption  of SFAS  159  did not  have a
material impact on its financial position or results of operations.

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  Business
Combinations.   SFAS  No.  141R  will  change  the   accounting   for   business
combinations.  Under SFAS No.  141R,  an  acquiring  entity  will be required to
recognize all the assets  acquired and  liabilities  assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.

Accordingly,  any  business  combinations  we  engage  in will be  recorded  and
disclosed  following  existing GAAP until January 1, 2009.  The Company  expects
SFAS No. 141R will have an impact on accounting for business  combinations  once
adopted but the effect is dependent upon  acquisitions at that time. The Company
is still assessing the impact of this pronouncement.

In December  2007,  the FASB issued SFAS No. 160,  Noncontrolling  Interests  in
Consolidated  Financial  Statements--An  Amendment  of ARB No. 51.  SFAS No. 160
establishes  new  accounting  and reporting  standards  for the  non-controlling
interest in a subsidiary and for the  deconsolidation of a subsidiary.  SFAS No.
160 is effective for fiscal years  beginning on or after  December 15, 2008. The
Company  believes  that  SFAS 160  should  not  have a  material  impact  on its
financial position or results of operations.

In March  2008,  the FASB  issued SFAS No.  161,  Disclosures  about  Derivative
Instruments and Hedging Activities.  SFAS No. 161 requires additional disclosure
related to derivatives  instruments  and hedging  activities.  The provisions of
SFAS No. 161 are  effective  as of January 1, 2008 and the Company is  currently
evaluating the impact of adoption.

In May  2008,  the  FASB  issued  FASB  Staff  Position  ("FSP")  No.  APB  14-1
"Accounting for Convertible  Debt  Instruments  That May Be Settled in Cash upon
Conversion  (Including  Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1
requires the issuer of certain  convertible debt instruments that may be settled
in cash (or other assets) on conversion to separately  account for the liability
(debt) and equity  (conversion  option) components of the instrument in a manner
that reflects the issuer's  non-convertible debt borrowing rate. FSP APB 14-1 is
effective for fiscal years  beginning  after  December 15, 2008 on a retroactive
basis and will be adopted by the  Company in the first  quarter of fiscal  2009.
The  Company  does not  expect the  adoption  of FSP APB 14-1 to have a material
effect on its results of operations and financial condition.

NOTE 2 - ACQUISITIONS

On January 1, 2008  pursuant to the Agreement  Regarding  Sale of Assets of, and
Stock in, Two Cable Companies (the "Purchase  Agreement"),  the Company acquired
certain assets, stock and the businesses of two cable TV companies,  Chula Vista
Cable, Ltd., a California limited  partnership ("Chula Vista") and National City
Cable, Inc.  ("National  City") located in the San Diego  metropolitan area (the
"January 2008 Acquisition"). The two entities combined serve approximately 3,400
subscribers  offering  cable TV,  high speed  Internet,  and phone  (Voice  over
Internet Protocol,  VoIP) services. The results of operations of Chula Vista and
National  City  have  been  included  in the  Company's  consolidated  financial
statements since January 1, 2008.

The Company  purchased,  on the terms and  conditions  set forth in the Purchase
Agreement,  substantially  all of the assets and the business of Chula Vista and
National  City,  for a total  purchase  price  consisting  of cash of  $750,000,
secured convertible notes payable of $1,750,000,  and 2,500,000 shares of Series
A  Preferred  stock  with an  estimated  fair  value of  $400,000,  based on the
equivalent  common shares into which the Series A Preferred Stock is convertible
as of the date of the  transaction.  The Preferred stock is convertible into the
Company's  common stock,  at the option of the holder,  on January 1, 2009.  The
convertible  note payable is secured by 1,750,000 shares of the Company's Series
A Preferred stock and requires  quarterly  interest payments at 6% and one final
payment of principal and any unpaid interest in January 2011 (see Note 6).

The assets of the January 2008 Acquisition  consist primarily of underground and
aerial  cable,  underground  conduit  equipment,  and a three  year  non-compete
agreement from the sellers. The Company has tentatively  allocated the aggregate
purchase price of $2,900,000 to underground  conduit of $2,400,000 and equipment
of $500,000.  The Company is depreciating  the equipment over a five-year useful
life and will start  depreciating  the  underground  conduit  once it is used in
operations.  The Company is still in the process of analyzing  the fair value of
the assets acquired to determine the final purchase price  allocation,  which it
expects to complete during 2008.

F-11

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 2 - ACQUISITIONS (Continued)

The  unaudited pro forma  combined  historical  results,  as if the January 2008
Acquisition had been acquired as of the beginning of the nine-month period ended
September 30, 2007, are estimated as follows:

<TABLE>
<CAPTION>

                                                              Three Months Ended            Nine Months Ended
                                                              September 30, 2007           September 30, 2007
                                                           --------------------------   --------------------------
<S>                                                      <C>                           <C>

        Net sales                                        $                504,000      $             1,447,000

       Net loss                                          $               (873,000)     $            (2,552,000)

        Weighted average common shares outstanding:
             basic and diluted                                         14,397,024                    6,638,766
        Loss per share:
             basic and diluted                           $                 (0.06)      $                 (0.38)
</TABLE>

The pro forma  information has been prepared for  comparative  purposes only and
does  not  purport  to be  indicative  of  what  would  have  occurred  had  the
acquisition actually been made at such date, nor is it necessarily indicative of
future operating results. The pro forma information does include corporate cost.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and  equipment  consists of the  following  at  September  30, 2008 and
December 31, 2007:



                                               2008                 2007
                                               ----                 ----

      Underground conduit                   $    2,400,000      $            -
      Cable distribution systems                 1,186,182             371,163
      Vehicles                                     101,145              60,512
      Software                                      56,434               6,000
                                             -------------       -------------
                                                 3,743,761             437,675
      Less accumulated depreciation               (310,520)            (76,203)
                                             -------------       -------------

      Fixed assets, net                     $    3,433,241      $      361,472
                                             =============       =============


Depreciation  expense for  property  and  equipment  for the nine  months  ended
September 30, 2008 and 2007 was $177,013 and $36,424,  respectively, and $63,769
and  $26,327  for  the  three  months  ended   September   30,  2008  and  2007,
respectively.

F-12

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)

NOTE 4 - DEBENTURE

On January 31, 2008, the Company  executed a three-year  Secured  Original Issue
Discount  Debenture for $1,760,000 (the "Debenture") with a finance company (the
"Holder").  The Company  received  proceeds of $1,600,000  from the Holder.  The
$160,000  original  issue  discount has been  recorded as a debt discount in the
accompanying  condensed  consolidated  balance sheet.  The debt discount will be
amortized to interest  expense over the life of the Debenture on a straight-line
basis, which approximates the effective interest method.

The  Debenture is repaid as interest  only for the first six months with monthly
principal  payments of $25,000  beginning on July 31, 2008,  $35,000 on November
30,  2008,  $45,000 on January 31, 2009,  $55,000 on July 31,  2009,  $65,000 on
January 31, 2010,  $70,000 on April 30, 2010,  $75,000 on July 31, 2010, and one
installment  of $210,000 on the  maturity  date of December  31,  2010.  Monthly
interest  is paid at the higher of 11.5% or prime plus 4% (18% if the Company is
in default). The Company may prepay the Debenture within the first 120 days with
no penalty or premium;  after 120 days, it is required to pay a 10% premium. The
Debenture  is  automatically  due and  payable  upon the  closing of a qualified
financing in the amount of  $5,000,000  or more,  as disclosed in the  Debenture
agreement.  The Company is also required to pay down additional  principal equal
to 35% of excess EBITDA, if any, as defined in the Debenture agreement.

The Debenture is secured by substantially  all the assets of the Company and its
wholly-owned  subsidiaries,  and is senior to the convertible notes entered into
for the January 2008  Acquisition  (see Notes 2 and 6). The Debenture  agreement
contains various covenants,  including  prohibitions on future issuances of debt
or equity securities,  and requirements for minimum monthly revenues and monthly
profitability.

The Holder also was granted a 5-year warrant to acquire  3,688,320 shares of the
Company's  common stock,  for an aggregate  exercise price of $100, or it can be
exercised  on a cashless  basis.  The  exercise  price is  subject  to  downward
adjustment  if the Company  issues  securities at a price less than the exercise
price in the future.  As of September 30, 2008, the Company has not adjusted the
exercise price.

The  Company  entered  into a Put and Call Option  Agreement  (the "Put and Call
Option")  with the Holder  related to the  warrant  shares.  If the  Company has
repaid the entire  principal  and  interest on the  Debenture on or prior to the
one-year anniversary of the Debenture, the Company may require on that date, the
Holder to sell 75% of the warrant (2,766,240 common shares) at an exercise price
equal to $540,000 to the Company.  As the Call Option is  contingent on a future
event with an unknown likelihood,  the Call Option has not been accounted for in
the accompanying condensed consolidated financial statements.

The Holder has the right to require the Company to repurchase the warrant shares
beginning  from and  after  the  earlier  of (a) the date on which  all  amounts
payable under the  Debenture are paid in full;  and (b) January 31, 2011 through
January 31, 2013,  for  $1,350,000  (the "Put  Option").  As a result of the Put
Option,  the  Company has  recorded  the value of the  associated  warrants as a
credit of $1,350,000 in derivative and warrant liabilities, with a corresponding
debit to debt discount in the accompanying condensed consolidated balance sheet.
The debt  discount is being  amortized to interest  expense over the life of the
Debenture on a straight-line  basis,  which  approximates the effective interest
method.

Amortization  expense  for the total debt  discount  during  nine  months  ended
September  30,  2008 was  $340,481  and  $112,067  for the  three  months  ended
September 30, 2008.

The Company also entered in to a Registration  Rights Agreement with the Holder.
This agreement  requires the Company to file a registration  statement  covering
the warrant  shares by March 31, 2008, and to have such  registration  statement
declared  effective  40 to 60  days  thereafter,  as  well  as to  maintain  the
effectiveness of such registration.  The Company is required to pay a liquidated
damages fee of 2% per month of the  Debenture  amount  ($35,200 per month) until
the Company is in compliance with this agreement.  As of September 30, 2008, the
Company was not in compliance with this agreement, and the Holder has waived its
rights for default  and damages as of this date.  Subsequent  to  September  30,
2008, the Company is out of compliance with this agreement and the Debenture has
been reflected as a current liability as of September 30, 2008.

F-13

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)
NOTE 5 - DEBT

<TABLE>
<CAPTION>

<S>                                                                                 <C>                <C>

Notes payable consist of the following at September 30, 2008:                        September 30,     December 31,
                                                                                         2008              2007
                                                                                         ----              ----
Notes payable of $1,750,000 dated January 1, 2008 to sellers of the January 2008
Acquisition  (see Note 2), bearing  interest at 6% per annum payable  quarterly,
principal due December 31, 2010,  convertible  commencing January 1, 2009 at the
higher of the  average  previous  five days'  closing  stock  price or $1.00 per
common share,  secured by 1,750,000  shares Company Series A Preferred  stock in
escrow, including accrued interest of $26,250 at September 30, 2008.                $  1,776,250        $        -

Secured  Original Issue  Discount  Debenture (see Note 4). At September 30, 2008
the unpaid interest was $16,387.                                                       1,726,387                 -

Notes  payable to various  lenders,  interest at 10%,  convertible  at $0.20 per
share,  due December 2010  (includes  $115,885 of accrued  interest added to the
principal  balance as part of a refinancing on December 31, 2007).  If converted
to common stock, the lenders will receive warrants equal to the number of shares
converted,  50% of which will be exercisable at $0.40 per share and 50% of which
will be  exercisable at $0.75 per share for two years from the date of issuance.
At September 30, 2008, includes accrued interest of $24,442.                             350,340           325,885

Note payable from the April 2006 acquisition,  interest at 12%, includes accrued
interest of $11,254 at September 30, 2008.                                               161,254           150,000

Note  payable to  finance  company,  including  accrued  interest  of $33,721 at
September 30, 2008,  due in six quarterly  payments in common stock of principal
of approximately $153,000 beginning September 2007 (based on the average closing
price of the  Company's  common stock prior to the payment  date,  but no higher
than $1.00 per share or less than $0.10 per share) plus interest at 10%. For the
nine months ended  September 30, 2008, the Company issued  4,886,420  shares for
debt reduction of $488,642.                                                              148,986           595,000

Notes payable to various lenders, interest at 10%, convertible, at the Company's
option,  at $0.10 per share,  due  December 31,  2008.  At  September  30, 2008,
includes accrued interest of $542.                                                        70,542                 -

Notes  payable  assumed  in June  2007  acquisition  and an  additional  vehicle
purchased  in  March  2008,  all  from  a  finance  company,  collateralized  by
automobiles,  bearing  interest at rates ranging from 0% to 2.9%,  principal and
interest due in monthly installments ranging from $472 to $575 through May 2012.          69,122            53,024

Notes  payable to a related party  totaling  $59,850,  plus accrued  interest of
$4,414 at September 30, 2008; interest ranging from 10% - 12%.                            64,264           307,350

Note  payable of $50,000 from an  individual,  annual  interest at 20%,  note is
under a repayment  plan. At September  30, 2008,  includes  accrued  interest of
$12,280.                                                                                  62,280            50,000

Note payable of $25,000 from an individual,  annual interest at 20%, convertible
to common at $0.10 per common  share,  in default  and is being  negotiated.  At
September 30, 2008, includes accrued interest of $6,042.                                  31,042           148,000

F-14

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)


NOTE 5 - DEBT (Continued)

Other notes payable                                                                       33,386               940
Unamortized discount on the Debenture (see Note 4)                                    (1,169,520)               -
                                                                                ------------------    ----------------

                                                                                       3,324,333         1,630,199
Less current portion                                                                  (1,110,274)         (472,512)

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

                                                                                $      2,214,059      $  1,157,687
                                                                                ==================    ================
</TABLE>

NOTE 6 - STOCKHOLDERS' DEFICIT

Preferred Stock

The Company has designated  4,250,000  shares of its preferred stock as series A
preferred  stock ("Series A Preferred"),  with a par value of $0.0001 per share.
The Series A Preferred  stock  shall rank  senior to all other  classes of stock
relating  to  liquidation.  The  shares  are non  dividend  bearing,  and have a
liquidation preference of $1.00 per share.

During the nine months ended  September 30, 2008, the Company  issued  4,250,000
Series A Preferred  shares in connection with the January 2008  Acquisition (see
Note 2), as follows: (a) 2,500,000 shares as part of the purchase price; and (b)
1,750,000  shares as security in case of default on the $1,750,000 notes payable
(see Note 5). The  estimated  fair value of the  2,500,000  shares was  $400,000
(based on the value of the common shares on the date of issuance as if converted
to common  stock on that  date).  As the  additional  1,750,000  shares  will be
returned to the  Company  upon  repayment  of the  related  notes,  they are not
considered  outstanding for financial reporting purposes and thus are not valued
in the accompanying condensed consolidated balance sheet. After January 1, 2009,
the Series A Preferred  shares are  convertible to common shares at a conversion
price of 100% of the average  closing price for the preceding  five days divided
by $1.00 per share of Series A  Preferred,  with a common  stock  minimum  floor
value of $1.00 and a maximum  ceiling value of $5.00. At September 30, 2008, the
total  outstanding  Series A Preferred  shares are  convertible  into  2,500,000
shares of common stock.

On August 25, 2008,  the Company held its annual  shareholders'  meeting.  There
were sufficient votes to pass the expansion of preferred stock from 5,000,000 to
25,000,000 (4,250,000 Series A, 5,500,000 Series B and 15,250,000 Series C).

Common Stock

During the nine months ended  September  30,  2008,  the Company  issued  40,000
shares of restricted  common stock and 20,000 warrants  exercisable at $0.40 per
share and  20,000  warrants  exercisable  at $0.75  per share for cash  totaling
$8,000.

During the nine months ended  September 30, 2008, the Company  issued  6,477,625
shares of  restricted  common stock in connection  with the  settlement of notes
payable and related  accrued  interest  totaling  $615,947 with no gain or loss.
During the nine months ended  September 30, 2008, the Company  issued  4,908,007
shares of restricted  common stock to  consultants  in connection  with services
provided for a fair value of $556,352 (based on the related  measurement dates).
In addition,  the Company issued 1,250,000 shares of restricted  common stock in
connection with the  cancellation of the put feature on the bridge loan that was
repaid during the nine months ended September 30, 2008. These shares were valued
at $237,500 and are recorded as a loss on settlement of debt in the accompanying
condensed consolidated statement of operations.

F-15

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)

NOTE 6 - STOCKHOLDERS' DEFICIT (Continued)

During the nine months ended September 30, 2008, the Company issued an aggregate
of  6,245,101  shares of its  common  stock as  compensation  to  certain of its
employees.  The  estimated  fair value of the shares was $458,638  (based on the
related measurement dates), which was expensed in the accompanying  statement of
operations.

On August 25, 2008,  the Company held its annual  shareholders'  meeting.  There
were  sufficient  votes to pass the expansion of common stock from 50,000,000 to
250,000,000.


Stock Options and Warrants

In June 2007,  the Company  adopted  the  existing  2001 Stock  Option Plan (the
"Plan").  The Plan has reserved  3,500,000  shares of common stock,  as amended.
Under  provisions  of the  Plan,  the  exercise  price of the  options  shall be
determined by the Board of Directors at the time of grant.  The exercise  period
shall be no more than 10 years and the awards will vest over a period of time to
be determined by the Board of Directors.

In January 2007, the Board of Directors approved the 2007 Stock Option Plan (the
"2007 Plan").  The Plan has reserved  1,100,000  shares of the Company's  common
stock, as amended.  Under provisions of the 2007 Plan, the exercise price of the
options  issued under the Plan shall be  determined by the Board of Directors at
the time of grant.  The  exercise  period shall be no more than 10 years and the
awards  will  vest  over a  period  of time to be  determined  by the  Board  of
Directors at the time of grant.

As of September 30, 2008,  the Company had no  outstanding  options under either
plan.

The  following  represents  a summary of the warrants  outstanding  for the nine
months ended September 30, 2008:

<TABLE>
<CAPTION>

                                                                  Weighted             Weighted
                                                                  Average               Average
                                                                  Exercise             Remaining          Aggregate
                                              Number of            Price              Contractual         Intrinsic
                                               Warrants          Per Share           Terms (Years)          Value
                                             -------------    -----------------    ------------------    -------------
<S>                                          <C>              <C>                  <C>                   <C>

Balance at December 31, 2007                    1,924,199              $0.64                  3.0         $        -
     Grant                                      3,728,320              0.008                  5.0         $  221,224
     Exercised                                          -                  -
     Expired/Forfeited                           (721,699)            (0.72)
                                               ----------       ------------

Balance at September 30, 2008                   4,930,820              $0.15                 3.17         $  221,224
                                               ----------       ------------

Weighted average fair value of warrants granted:
     September 30, 2008                             $0.37
</TABLE>


The fair value of each warrant  granted  during the nine months ended  September
30, 2008 and 2007, was estimated using the Black-Scholes option pricing model on
the date of grant using the following  assumptions:  (i) no dividend yield, (ii)
average  volatility  ranged from 56% - 172%,  (iii) weighted  average  risk-free
interest rate ranged from 2.36% - 2.63%,  and (iv) average  expected life of 0.5
and 4.5 years.

F-16

<PAGE>

                NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Indemnities and Guarantees

The Company has made certain  indemnities and guarantees,  under which it may be
required to make payments to a guaranteed or indemnified  party,  in relation to
certain transactions. The Company indemnifies its directors, officers, employees
and  agents to the  maximum  extent  permitted  under the laws of the  States of
Delaware,  California,  Colorado and Florida.  In  connection  with its facility
leases,  the Company has indemnified its lessors for certain claims arising from
the use of the facilities.  In connection with certain of its stock purchase and
other  agreements,  the Company has indemnified  lenders,  sellers,  and various
other  parties  for  certain  claims  arising  from  the  Company's   breach  of
representations,  warranties and other  provisions  contained in the agreements.
The duration of the guarantees and indemnities do not provide for any limitation
of the maximum potential future payments the Company could be obligated to make.
Historically,  the Company has not been obligated to make any payments for these
obligations  and no  liabilities  have been recorded for these  indemnities  and
guarantees in the accompanying condensed consolidated balance sheets.

Litigation
The Company is currently  in  negotiations  regarding  the final  settlement  of
termination costs from an acquisition that wasn't  consummated.  The Company has
recorded  approximately  $64,000 in accrued expenses as of September 30, 2008 in
the accompanying consolidated balance sheet related to these claims.

In July 2008, the Company received notice of a legal complaint filed against the
Company in the  District  Court of  Arapahoe  County,  Colorado.  The  complaint
alleges  that the Company  owes funds in the amount of $70,390.  Management  has
contacted counsel regarding the suit. No actions have been taken at this time on
the Company's behalf. The Company does not believe the outcome of this case will
have a material adverse effect on the financial condition, results of operations
or liquidity of the Company.

From time to time,  the Company may be involved in various  claims,  lawsuits or
disputes  arising in the normal  operations of its business.  The Company is not
currently  involved in any such matters which  management  believes could have a
material  adverse  effect on the Company's  consolidated  financial  position or
consolidated results of operations.

NOTE 8 - SUBSEQUENT EVENTS

On July 28, 2008, the Company entered into a Letter Of Intent to acquire Phoenix
Communications  Inc. (dba Pine River Cable)  headquartered in McBain,  Michigan.
Pine River provides cable television and wireless Internet services to more than
2,500  customers  located in and around  McBain,  Michigan.  The  transaction is
contingent  upon  completion  of due  diligence  and  audit,  which has not been
completed.

Effective October 1, 2008, pursuant to the Agreement Regarding Sale of Assets of
Story Communications,  LLC, the Company closed its purchase of all of the assets
and cable TV systems of Story Communications, LLC located in the Tulsa, Oklahoma
metropolitan  area.  The purchase  price consists of cash of $11,500 and 513,500
shares of the Company's  Series B Preferred  stock.  After October 1, 2009,  the
Series  B  Preferred  stock  may  convert  to the  Company's  common  stock at a
conversion  price equal to 100% of the average closing price for the preceding 5
days  divided by $1.00 per share of Series B Preferred  stock.  In the event the
average  closing  price for the  preceding 5 days is less than the minimum floor
price of $1.00 per share or exceeds a maximum  ceiling price of $5.00 per share,
then  conversion  shall  occur at the floor  price.  As of October 1, 2008,  the
513,500  shares of the Series B Preferred  stock had an estimated  fair value of
$25,675,  based on the value of the  equivalent  common  shares  into  which the
Series B Preferred Stock is convertible as of the date of the  transaction.  The
Company has not yet determined an allocation of the purchse price.

On  October  9,  2008,  the  Company  executed  a  $50,000  note  payable  to an
individual.  The promissory  note is due on or before  December 31, 2008,  bears
interest at 10% per annum,  and is convertible at the Company's  option at $0.10
per share.

F-17

<PAGE>

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

The  following  discussion  should  be read in  conjunction  with our  unaudited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward-looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ  materially from those expressed in any forward looking
statements  made by, or on our behalf.  We  disclaim  any  obligation  to update
forward-looking statements.

The  independent  registered  public  accounting  firm's report on the Company's
financial  statements as of December 31, 2007,  and for each of the years in the
two-year period then ended,  includes a "going concern"  explanatory  paragraph,
that describes  substantial  doubt about the Company's  ability to continue as a
going  concern.  Management's  plans in  regard  to the  factors  prompting  the
explanatory  paragraph are  discussed  below and also in Note 1 to the unaudited
quarterly financial statements.

Business Overview

The  Company's  mission is to  identify  and  acquire a series of  strategically
targeted  rural  cable  systems  and  networks.  The  Company has and intends to
continue selectively acquire,  upgrade and consolidate the capabilities of these
systems  such that the sum of the whole  will be greater  than its  parts.  Each
acquired  system will  expand its basic  cable TV  services to include  Digital,
Video on  Demand  ("VoD"),  Pay per View,  High-speed  Internet,  and  Telephone
through either its existing  cable network or WiFi  ("Wireless  Fidelity")  last
mile strategies.

Plan of Operations

At  September  30,  2008,  we had  $76,346  cash on hand.  We  intend to use our
operating cash flow to continue to support operations.  We intend to continue to
develop the business  opportunity  through  acquisition and organic growth.  The
development of the business opportunity includes continued marketing efforts and
product testing over the next twelve months.

On  January  1,  2008,  the  Company  acquired  certain  assets,  stock  and the
businesses from two cable TV companies ("Chula Vista Cable,  Ltd." and "National
City Cable, Inc.") both located in the San Diego metropolitan area (the "January
2008  Acquisition").  The two  entities  combined  serve over 3,400  subscribers
offering  cable TV, high speed and phone (Voice over  Internet  Protocol,  VoIP)
services.

The January 2008  acquisition  was  acquired  for $750,000 of cash,  2.5 million
shares of the Company's  Class A Preferred stock with an estimated fair value of
$400,000 and a $1.75 million three year secured balloon note bearing interest at
6%, paid quarterly (see Note 2). On the effective close date of January 1, 2008,
the  estimated  fair value of the  preferred  stock if  converted  to common was
$400,000.  For accounting  purposes,  based on the value of the stock,  cash and
note, the transaction was recorded on the books at $2,900,000  based on the fair
market value of the Company's  common stock as of completion of the acquisitions
on January 1, 2008.

On July 28, 2008, NexHorizon Communications,  Inc. announced it has entered into
a letter of intent to acquire Phoenix Communications Inc. (dba Pine River Cable)
headquartered  in McBain,  Michigan.  Pine River provides  cable  television and
wireless  Internet  services to more than 2,500 customers  located in and around
McBain, Michigan. The transaction is contingent upon completion of due diligence
and audit, which has not yet been completed.

                                       1

<PAGE>

Effective October 1, 2008, pursuant to the Agreement Regarding Sale of Assets of
Story Communications,  LLC, the Company closed its purchase of all of the assets
and cable TV systems of Story Communications, LLC located in the Tulsa, Oklahoma
metropolitan  area.  The purchase  price consists of cash of $11,500 and 513,500
shares of the Company's  Series B Preferred  stock.  After October 1, 2009,  the
Series  B  Preferred  stock  may  convert  to the  Company's  common  stock at a
conversion  price equal to 100% of the average closing price for the preceding 5
days  divided by $1.00 per share of Series B Preferred  stock.  In the event the
average  closing  price for the  preceding 5 days is less than the minimum floor
price of $1.00 per share or exceeds a maximum  ceiling price of $5.00 per share,
then  conversion  shall  occur at the floor  price.  As of October 1, 2008,  the
513,500  shares of the Series B Preferred  stock had an estimated  fair value of
$25,675, based on the equivalent common shares into which the Series B Preferred
Stock is convertible as of the date of the transaction.

On August 25, 2008,  the Company held its annual  shareholders'  meeting.  There
were  sufficient  votes to pass the expansion of common and preferred stock from
50,000,000  to  250,000,000  and 5,000,000 to  25,000,000  (4,250,000  Series A,
5,500,000 Series B and 15,250,000 Series C), respectively.

We are dependent on raising additional equity and/or debt to fund any negotiated
settlements  with our  outstanding  creditors  and meet  our  ongoing  operating
expenses.  There is no  assurance  that we will be able to raise  the  necessary
equity  and/or  debt  that we will  need  to be  able  to  negotiate  acceptable
settlements  with  our  outstanding  creditors  or fund  our  ongoing  operating
expenses.  We cannot  make any  assurances  that we will be able to raise  funds
through such activities.

Results of Operations

For the Nine  Months  Ended  September  30, 2008  Compared to Nine Months  Ended
September 30, 2007

Net Sales

Net sales were $1,470,943 for the nine months ended September 30, 2008, compared
to $262,019  for the nine months  ended  September  30,  2007.  All sales were a
result of our activities involving cable TV systems and networks. The $1,208,924
increase in sales is directly attributed to the acquisition of the two San Diego
cable TV companies effective January 1, 2008.

Cost of Sales

Cost of sales  was  $420,557  for the nine  months  ended  September  30,  2008,
compared to the $134,584 for the nine months ended  September 30, 2007.  Cost of
sales principally consists of programming,  high speed Internet and other direct
costs involving cable TV systems and networks.  The $285,973 increase in cost of
sales is directly  attributable to the acquisition of the two San Diego cable TV
companies effective January 1, 2008.

Operating Expenses

Operating expenses were $2,399,795 for the nine months ended September 30, 2008,
compared to  $2,071,269  for the nine  months  ended  September  30,  2007.  The
increase of $328,526 was a result of the  acquisition of the two San Diego cable
companies,  offset by a one-time  impairment  of goodwill of $1,200,000 in 2007.
During the nine months  ended  September  30,  2008,  salary  expenses  includes
$458,638 of  compensation  related to salaries of certain  members of management
that was paid in common stock rather than cash.

Operating  expenses also include other  general and  administrative  expenses of
$1,627,080  compared to $616,947 for the nine months ended  September  30, 2007.
Included  in our other  general and  administrative  expense for the nine months
ended September 30, 2008,  approximately $772,418 was for legal,  consulting and
professional  services  representing  approximately  47% of  other  general  and
administrative expenses. The remaining other general and administrative expenses
principally  consists of operating expense such as non-cash consulting expenses,
depreciation, rent and utilities expense.


                                       2
<PAGE>

Other income (expense)

Other income  (expense) was $(862,343)  for the nine months ended  September 30,
2008,  compared to $(304,568) for the nine months ended  September 30, 2007. The
increase  of  $557,775  in other  expense  was a result of  additional  interest
expense of $525,000  primarily from the $1,750,000  secured balloon note and the
$1,760,000  secured  original  issue  discount  debenture  that  were  issued in
connection with the January 2008  Acquisition and the loss on settlement of debt
of $237,500, offset by the gain on extinguishment of debt of $188,000 during the
nine months ended September 30, 2008.

Results of Operations  -Three Months Ended  September 30, 2008 Compared to Three
Months Ended September 30, 2007

Net Sales

Net sales were $522,512 for the three months ended September 30, 2008,  compared
to $108,679  for the three  months ended  September  30, 2007.  All sales were a
result of our  activities  involving  cable systems and  networks.  The $413,833
increase in sales is directly attributed to the acquisition of the two San Diego
cable TV companies acquired effective January 1, 2008.

Cost of Sales

Cost of sales was  $76,675  for the  three  months  ended  September  30,  2008,
compared to the $33,168 for the three months ended  September 30, 2007.  Cost of
sales principally consists of programming,  high speed Internet and other direct
costs involving cable TV systems and networks.  The $43,507  increase in cost of
sales is directly  attributable to the acquisition of the two San Diego cable TV
companies effective January 1, 2008.

Operating Expenses

Operating  expenses were $792,614 for the three months ended September 30, 2008,
compared to $680,530 for the three months ended September 30, 2007. The increase
of $112,084 was a result of the acquisition of the two San Diego cable companies
acquired  effective January 1, 2008. During the three months ended September 30,
2008,  salary  expenses  included a $183,971  non-cash  compensation  related to
salaries of certain members of management paid in common stock rather than cash.

Operating  expenses also include other  general and  administrative  expenses of
$506,542 compared to $511,776, for the three months ended September 30, 2008 and
2007, respectively. Included in our other general and administrative expense for
the three months ended September 30, 2008, approximately $247,956 was for legal,
consulting and professional  services  representing  approximately  49% of other
general  and   administrative   expenses.   The  remaining   other  general  and
administrative  expenses  principally  consists  of  operating  expense  such as
non-cash consulting expenses, depreciation, rent and utilities expense.

Other income (expense)

Other income  (expense) was $(330,801) for the three months ended  September 30,
2008,  compared to $(203,226) for the three months ended September 30, 2007. The
increase  of $127,575  of expense  was a result of the  interest  expense on the
$1,750,000  secured  balloon  note and the  $1,760,000  secured  original  issue
discount debenture issued in connection with the January 2008 Acquisition.

Liquidity and Capital Resources

As of  September  30,  2008,  the  Company  has a  working  capital  deficit  of
$2,968,890. Management recognizes the Company must generate additional resources
to enable it to continue  operations.  The Company will continue to seek working
capital  through  the equity  markets.  The  successful  outcome of future  fund
raising  activities cannot be determined at this time, and there is no assurance
that,  if  achieved,  the  Company  will have  sufficient  funds to execute  its
intended business plan or generate positive operating results.


                                       3
<PAGE>

Cash flow from  operations  during the nine months  ended  September  30,  2008,
included net losses of  $2,211,752  adjusted  for non-cash  items of $572,078 in
depreciation  and  amortization  expense,   $1,014,990  of  stock  compensation,
$118,302 of accrued interest added to notes payable,  and $49,500 of net loss on
debt extinguishment.

Cash flow from  operations  during the nine months  ended  September  30,  2007,
included net losses of  $2,248,402  adjusted  for  non-cash  items of $48,999 in
depreciation and amortization expense.

In January 2008, the Company executed a three-year  debenture for  approximately
$1,760,000.  The debenture is repaid with interest only for the first six months
and then with  principal  and interest  payments  during the  remaining  months.
Payments  are made  monthly  at the  higher  of 11.5%  or prime  plus 4%.  As of
September 30, 2008 the current balance is $1,726,387, including accrued interest
of $16,387.

A portion of the  debenture  proceeds was used to acquire two cable TV companies
located  in the San  Diego  metropolitan  area  ("Chula  Vista  Cable,  Ltd" and
"National  City Cable,  Inc.") on January 1, 2008.  The combined  entities serve
over 3,400  subscribers.  The combined  entities  were  acquired for $750,000 of
cash, 2.5 million shares of Series A Preferred stock convertible to common after
the one year anniversary from the transaction and $1.75 million in the form of a
3 year balloon note bearing interest at 6% annually, paid quarterly.

On July 28, 2008,  the Company  announced it has entered into a letter of intent
to acquire Phoenix  Communications Inc. (dba Pine River Cable)  headquartered in
McBain,  Michigan.  Pine River provides cable  television and wireless  Internet
services to more than 2,500  customers  located in and around McBain,  Michigan.
The transaction is contingent upon completion of due diligence and audit.

Effective  October 1, 2008, the Company closed on the purchase of certain assets
and cable TV systems  located  in the Tulsa,  Oklahoma  metropolitan  area.  The
assets and systems  acquired  were  purchased  from a bank for $11,500  cash and
513,500 Series B Preferred  stock.  The Preferred stock is convertible to common
stock,  at the  option of the  holder,  after the  one-year  anniversary  of the
transaction.  The conversion to common will be based upon the higher of the five
day closing average stock price or $1.00 per share.

We Require  Additional  Capital  for Cable TV, High Speed  Internet  and Digital
Phones

The Company  will  require  additional  capital for  acquisitions,  upgrades and
expansion of  additional  services.  If we are unable to raise  capital when our
needs arise, we will be unable to pursue our current  business  strategy and may
not be able to fund our operations.

We Require Additional Capital for Acquiring Other Companies

The Company will require  additional  capital for acquisition of other companies
that will complement the Company's  growth  strategy.  If we are unable to raise
capital when our needs arise,  we will be unable to pursue our current  business
strategy and may not be able to fund our operations.

Our Business Depends on:
      A.  The Company's ability to secure adequate funding to ensure the Company
          meets its financial objectives.

      B.  The Company's ability to acquire  strategic  companies that complement
          the company's business model.

      C.  The Company's ability to offer competitive rates to our customers.

Critical Accounting Policies

As of the date of the filing of this  quarterly  report,  we believe  there have
been no material  changes to our  critical  accounting  policies  and  estimates
during the nine months ended September 30, 2008.


ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable


                                       4
<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES.

Disclosures Controls and Procedures

Under the supervision and with the  participation  of our management,  including
our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure  controls and  procedures,  as such term is defined
under Rule 13a-15(e)  promulgated under the Securities  Exchange Act of 1934, as
amended  (the  Exchange  Act).  As a result of this  evaluation,  we  identified
material  weaknesses  in our  internal  control over  financial  reporting as of
December 31, 2007.  Accordingly,  we concluded that our disclosure  controls and
procedures were not effective as of December 31, 2007.

As required by SEC Rule 15d-15(b),  our Chief  Executive  Officer carried out an
evaluation  under the supervision and with the  participation of our management,
of the effectiveness of the design and operation of our disclosure  controls and
procedures  pursuant  to  Exchange  Act Rule  15d-14 as of the end of the period
covered by this report. Based on the foregoing  evaluation,  our Chief Executive
Officer has  concluded  that our  disclosure  controls  and  procedures  are not
effective  in  timely  alerting  them to  material  information  required  to be
included in our periodic SEC filings and to ensure that information  required to
be disclosed in our periodic SEC filings is accumulated and  communicated to our
management,  including our Chief Executive  Officer,  to allow timely  decisions
regarding  required  disclosure  as a result of the  deficiency  in our internal
control over financial reporting discussed below.

The material  weakness  identified  in our annual  report on Form 10-KSB for the
year  ended  December  31,  2007  was  related  to a lack  of  accounting  staff
responsible  for  the  authorization,  processing,  approval  and  reporting  of
transactions as well as the overall financial reporting process.


ITEM 4T. CONTROLS AND PROCEDURES.

Management's Quarterly Report on Internal Control over Financial Reporting.

Management is responsible for  establishing  and maintaining  adequate  internal
control over financial reporting.  Our management conducted an evaluation of the
effectiveness  of our internal  control over  financial  reporting  based on the
framework in Internal  Control -  Integrated  Framework  ("ICFT")  issued by the
Committee of Sponsoring  Organizations of the Treadway Commission.  Based on our
evaluation,  management  has  concluded,  as of September  30, 2008,  we did not
maintain effective controls over the financial  reporting process because we had
the following deficiencies:

     1. Shortage of qualified information technology, IT personnel and financial
reporting personnel due to limited financial  resources.  This material weakness
can lead to the following:

     - an inability to ensure there is timely  analysis and review of accounting
records, spreadsheets, and supporting data; and

     - an  inability to  effectively  monitor  access to, or maintain  effective
controls over changes to,  certain  financial  application  programs and related
data.

Management has determined that these control  deficiencies  constituted material
weaknesses in our internal  control over financial  reporting as of December 31,
2007 and September  30, 2008. A material  weakness is a control  deficiency,  or
combination  of control  deficiencies,  in ICFR such that there is a  reasonable
possibility  that a material  misstatement  of our  annual or interim  financial
statements  will not be  prevented or detected on a timely basis by employees in
the normal course of their assigned functions.

Notwithstanding  these  material  weaknesses,  we believe that the  consolidated
financial  statements  included in this report fairly  present,  in all material
respects,  our consolidated  financial  position and results of operations as of
and for the quarter ended September 30, 2008.

                                       5
<PAGE>

Remediation of Material Weakness

As discussed in  Management's  Annual Report on Internal  Control over Financial
Reporting,  as of December  31,  2007,  there were  material  weaknesses  in our
internal control over financial reporting.  To the extent reasonably possible in
our current financial  condition,  we have authorized the addition of additional
staff  members to the finance  department  to ensure  that there are  sufficient
resources  within  the  department  to  prepare  our  financial  statements  and
disclosures in accordance with accounting  principles  generally accepted in the
United  States of America.  We are in the process of analyzing our processes for
all business  units and  establishing  of formal  policies and  procedures  with
necessary  segregation of duties,  which will establish  mitigating  controls to
compensate for the risk due to lack of segregation  of duties.  In addition,  we
are evaluating the necessary steps to improve the financial  reporting of all of
our business units and we are in the initial planning phase of upgrading,  where
possible,  certain of our information  technology  systems  impacting  financial
reporting.  We are currently  analyzing  the  financial  impact of the hiring of
information  technology  management staff that is adequately qualified to ensure
that the IT general computing  controls are effective over our systems impacting
financial reporting.

Through these steps, we believe we are addressing the deficiencies that affected
our  internal  control  over  financial  reporting  as of December  31, 2007 and
September  30,  2008.  However,  the  effectiveness  of any  system of  internal
controls is subject to inherent  limitations  and there can be no assurance that
our internal control over financial reporting will prevent or detect all errors.
Because the remedial actions require hiring of additional  personnel,  upgrading
certain of our information technology systems, and relying extensively on manual
review and approval,  the  successful  operation of these  controls for at least
several quarters may be required before  management may be able to conclude that
the material weakness has been remediated. We intend to continue to evaluate and
strengthen  our  ICFR  systems.  These  efforts  require  significant  time  and
resources. If we are unable to establish adequate ICFR systems, we may encounter
difficulties  in  the  audit  or  review  of  our  financial  statements  by our
independent public accountants, which in turn may have a material adverse effect
on our ability to prepare  financial  statements in accordance  with GAAP and to
comply with our SEC reporting obligations.

Beginning in the quarter  ended June 30, 2008,  we initiated and began to change
our internal  control over financial  reporting to remediate the  aforementioned
deficiency  and to  strengthen  our internal  control  processes,  including the
seeking of  additional  accounting  staff and/or the  consultation  with outside
resources as we deem  appropriate.  During the quarter  ended June 30, 2008,  we
purchased and installed a billing  software  package  throughout the Company and
its subsidiaries. During the quarter ended September 30, 2008, we implemented an
accounting software package throughout the Company and its subsidiaries and have
been  evaluating  the  results  upon our  internal  controls.  We have  incurred
approximately  $35,000 to date in  remediation  costs.  The  aggregate  costs of
remediation are unknown at this time.


                          PART II. - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

While the Company is not formally engaged in any litigation,  legal  proceedings
or claims, it is involved in resolving the following issues:

     - The Company is currently in negotiations  regarding  final  settlement of
     termination  cost from an acquisition  agreement.  The Company has included
     approximately  $65,000 in accrued  expenses  at  September  30, 2008 in the
     accompanying consolidated balance sheet related to these claims.

     - In July 2008,  the Company  received  notice of a legal  complaint  filed
     against the Company in the District Court of Arapahoe County, Colorado. The
     complaint  alleges  that the  Company  owes funds in the amount of $70,390.
     Management has contacted  counsel  regarding the suit. No actions have been
     taken at this time on the  Company's  behalf.  The Company does not believe
     the  outcome  of this  case  will  have a  material  adverse  effect on the
     financial condition, results of operations or liquidity of the Company.


                                       6
<PAGE>

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The Company made the following unregistered sales of its securities from July 1,
2008 through September 30, 2008.

<TABLE>
<CAPTION>

      DATE OF SALE         TITLE OF SECURITIES     NO. OF SHARES       CONSIDERATION
      ------------         -------------------     -------------       -------------
<S>                        <C>                     <C>                 <C>

    7/1/08 - 9/30/08           Common Stock          1,564,360         Note settlement valued at $156,436
    7/1/08 - 9/30/08           Common Stock          2,397,705         Services rendered valued at $204,736
    7/1/08 - 9/30/08           Common Stock          2,793,139         Salaries valued at $183,971
</TABLE>

Exemption from Registration Claimed

All of the sales by the Company of its unregistered  securities were made by the
Company in reliance upon Section 4(2) of the Act. All of the individuals  and/or
entities listed above that purchased the unregistered  securities were all known
to the Company and its management,  through pre-existing business relationships,
as long standing business  associates,  friends,  and employees.  All purchasers
were provided access to all material information,  which they requested, and all
information  necessary to verify such  information  and were afforded  access to
management of the Company in connection with their purchases.  All purchasers of
the unregistered securities acquired such securities for investment and not with
a view  toward  distribution,  acknowledging  such  intent to the  Company.  All
certificates  or  agreements  representing  such  securities  that  were  issued
contained restrictive legends,  prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from  registration in any further resale or
disposition.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

NONE


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

NONE


ITEM 5.  OTHER INFORMATION.

NONE.


ITEM 6.  EXHIBITS.

Exhibits.  The  following is a complete  list of exhibits  filed as part of this
Form 10-Q.  Exhibit  numbers  correspond  to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.

          Exhibit 31.1  Certification  of Chief  Executive  Officer  pursuant to
                        Section 302 of the Sarbanes-Oxley Act

          Exhibit 31.2  Certification  of Chief  Financial  Officer  pursuant to
                        Section 302 of the Sarbanes-Oxley Act

          Exhibit 32.1 Certification of Principal  Executive Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act

          Exhibit 32.1 Certification of Principal  Financial Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act


                                       7
<PAGE>



                                   SIGNATURES


     Pursuant to the  requirements  of Section 12 of the Securities and Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                NexHorizon Communications, Inc.
                                (Registrant)



        /s/ Calvin D. Smiley Sr.
        ------------------------------------------
        Calvin D. Smiley Sr., President and Chief Executive Officer


        November 19, 2008


        /s/ Daniel M. Smith
        --------------------------------------------
        Daniel M. Smith, Chief Financial Officer

        November 19, 2008




                                       8