U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO ____________.

Commission file number 000-49849

CELL WIRELESS CORPORATION

(Exact name of registrant as specified in its charter)

NEVADA                                           88-0483722

(State or jurisdiction of                               (IRS Employer IdentificationNo.)

incorporation or organization)

4625 EAST BROADWAY, TUCSON, ARIZONA 85711

(Address of Principal Executive Offices)

Registrant’s telephone number: (520) 881-4632

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

Securities registered pursuant to Section 12 (g) of the Act:

Common Stock, $ .001 Par Value

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports), and (2) been subject to such filing requirements for the past 90 days.

Yes [X] No [  ].

As of July 26, 2005 the Registrant had 95,296,270 shares of common stock issued and outstanding.

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

CELL WIRELESS CORPORATION

Quarterly Report on Form 10-QSB for the

Quarterly Period Ending June 30, 2005

Table of Contents

PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements (Unaudited)

Condensed Consolidated Balance Sheet: As of June 30, 2005

Condensed Consolidated Statements of Income: Six and Three months Ended June 30, 2005 and 2004

Condensed Consolidated Statement of Stockholders’ Equity: Six Months ended June 30, 2005

                 

Condensed Consolidated Statements of Cash Flows: Six Months Ended June 30, 2005  and 2004

           

Notes to Condensed Consolidated Financial Statements: as of June 30, 2005

         Item 2. Management Discussion and Analysis

         Item 3.  Controls and Procedures 

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Item 6. Exhibits

 

ITEM 1 FINANCIAL STATEMENTS

  

CELL WIRELESS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET

                              June 30 2005 (Unaudited)

ASSETS

Current Assets                             

     Cash and cash equivalents                            $     71,050

     Restricted cash  (Note B)                            139,348

     Other current assets                                 57,264

          Total Current Assets                             267,662

  Property and equipment, net of accumulated depreciation of $68,578 Net (Note C)                             281,957

  Intangible assets , net ( Note D)                               2,977,501

Total Assets                                $  3,527,120

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities                        

Accounts payable and accrued expenses (Note E)                               $1,231,447

Note payable (Note E)                                    160,601

Total Current Liabilities                         1,392,048

                             

Stockholders’  Equity: (Note F)                           

    Preferred stock $.001 par value; shares authorized: 10,000,000 ;shares issued and outstanding:  None                         -

    Common stock $.001 Par Value; share authorized: 500,000,000 ;issued and outstanding: 95,296,270                        95,297

  Additional paid in capital                             2,301,586

Accumulated deficit                                     (261,811)

                             

Total Stockholders’ Equity                           2,135,072        

    Total Liabilities Stockholders’  Equity                              $3,527,120

See accompanying footnotes to the unaudited condensed consolidated financial statements

 

CELL WIRELESS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)

           

      For the Three months Ended June 30      For the Six months Ended June 30

      2005      2004      2005      2004

Revenues       $563,584      $3,643,454  $1 982 016      $8,744,290

Cost of Sales       294,828      3,114,452      974,078      7,474,685

Gross Profit       268,756      529,002     1,007 938      1,269,605

Operating Expenses:                    

Selling, General & Administrative       452,094      237,149      796,565      569,158

Amortization and Depreciation      68,617      1,124      127,537     2,698

Total Operating Expenses      520,711      238,273      924,102      571,856

Income (loss)  from Operations      (251,955)      290,729     83,836      697,749

Income tax expense (benefit)         75,550      87,219                   25,151      209,325

Net Income (Loss)      $  (176,405)      $203,510        $      58,685      $488,424

                       

Net Earnings Per Share –Basic & Diluted       $     (  .00)  $      .00   $         ..00   $         .00

                       

Weighted Average Number of Common  Shares Used in the Computation of Earnings  Per Share      95,296,270      95,296,270     95,296,270      95,296,270

See accompanying footnotes to the unaudited condensed consolidated financial statements

CELL WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

FOR THE SIX MONTHS  ENDED JUNE 30, 2005

(UNAUDITED)

                             

                             

      Common Shares      Stock Amount      Additional paid in Capital      Accumulated Deficit      TotalShareholders Equity

Balance at January 1, 2005 (revised)      36,217,651  $  36,218      $             -        $(320,496)      $(284,278)   

Shares issued for acquisition of assets, 1Cellnet, LLC net of costs      59,078,617          59,079      2,301,586  -      2,360,665

Net income for the six months ended  June 30, 2005                                  -                   -                            -     58,685      58,685

Balance at June 30, 2005      95,296,268  $  95,297      $2,301,586      $(261,811)      $2,135,072

See accompanying footnotes to the unaudited condensed consolidated financial statements

CELL WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

      For the Six months Ended June 30

      2005  2004

           

Cash Provided  (Used) by Operating Activities      $(49,083)      $353,147

Cash  ( Used ) in Investing Activities      ( 6,343)      -

Cash Provided (Used ) in Financing Activity      (31,874)                 -

           

Net Increase (Decrease) in Cash Balances      (87,300)      353,147

Cash Balances at Beginning of Period      158,350         317,827

Cash Balance at End of Period      $71,050     $   670,974

           

Supplemental Information:           

Cash paid during the period for interest      $              -    $              -

Cash paid during the period for taxes $              -     $             -

Common shares issued in connection with recapitalization ,net       $2,670,257         $              -

See accompanying footnotes to the unaudited condensed consolidated financial statements

CELL WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(UNAUDITED)

NOTE A-SUMMARY OF ACCOUNTING POLICIES

General

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and theinstructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Accordingly, the results from operations for the three-month periodended June 30, 2005, are not necessarily indicative of the results that may be expected for the year ended December 31, 2005.

Basis of Presentation

Cell Wireless Corporation (the “Company”, “Cell Wireless”, or “CLWL”) is a Nevada Corporation, formerly named Arizona Aircraft Spares, Inc., maintains offices located in Tucson, Arizona andSurfers Paradise, Queensland, Australia.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Cell Wireless Australia, PTY, LTD a company formed under the laws of Queensland, Australia.  Significant intercompanytransactions have been eliminated in consolidation.

Acquisition and Capital Restructure

On November 15, 2004, the Company entered into an Asset Purchase Agreement ("Agreement") with 1Cellnet LLC, a limited liability company formed under the laws of the State of Delaware ("1Cellnet") a privately held company operatinga telecommunications multi-level marketing business in the Country of Australia. The Company consummated the acquisition of the 1Cellnet assets on March 9, 2005 and the agreement included an effective date of January 1, 2005.

In connection with the Agreement, the Company issued 59,078,619 shares of its restricted common stock to 1Cellnet  and assumed certain 1Cellnet liabilities in exchange for 1Cellnet assets. In addition, certain principalofficers of 1Cellnet acquired 17,158,397 shares of the Company's common stock held by its former President and Chief Executive Officer in exchange for $435,000 and a promissory in the amount of $200,000. As a result, 1Cellnet and its principals own eighty percent(80%) of the Company.

Subsequent to the date of the financial statements, the Company agreed to issue to its former President and Chief Executive Officer a warrant to acquire 1,000,000 shares of the Company's common stock with an exercise price of $.30per share and a warrant to acquire 1,000,000 shares of the Company's common stock at $1.00 per share. The warrants expire two (2) years from the date of issuance and will be accounted for as an organization cost pursuant to SOP 98-5.

At the time of the Agreement, the Company was an inactive publicly registered shell corporation with no significant assets or continuing operations. As a result of the Agreement, 1Cellnet owned eighty percent (80%) of theCompany's issued and outstanding shares, there was a change in control of the Company, and in accordance with SFAS No. 141, 1Cellnet is the acquiring entity. While the transaction is accounted for using the purchase method of accounting, in substance the Agreement isa recapitalization of the Company's capital structure.

For accounting purposes, the Company has accounted for the transaction as a reverse acquisition and 1Cellnet shall be the surviving entity. The total carrying value of net assets acquired was  $3,562,699, which includedIntellectual Property of  $3,080,000. The Company did not recognize goodwill or any other intangible assets in connection with the transaction.

Effective with the Agreement, substantially all of 1Cellnet's assets were exchanged for an aggregate of 59,078,619 shares of the Company's restricted common stock. The value of the stock that was issued was the historical cost ofthe Company's net tangible assets, which did not differ materially from their fair value.

The following summarizes the asset purchase agreement with 1Cellnet:

Assets acquired      $   3,562,699

Liabilities assumed      1,202,034

Issuance of  shares of common stock       $ 2,360,665

The Company initially allocated the asset purchase of 1Cellnet based upon the historical cost of the assets acquired and liabilities assumed. The Company is in the process of calculating valuations of certain intangible assets,and obtaining third party verification of the valuations. Accordingly, the allocation of the purchase price is subject to adjustment based upon these valuations

In connection with the Agreement, the Company's shareholders voted to change its name to Cell Wireless Corporation and increase its authorized shares of $.001 par value common stock from 40,000,000 to 500,000,000.

Spin-Off  of Subsidiary

On December 30, 2004, the Company initiated the spin-off and distribution (the "Distribution" or "Arizona Aircraft Spin-off") to its shareholders and former management of an amount equal to approximately eighty percent (80%) ofthe shares of its formerly wholly-owned and sole operating business segment and subsidiary, Arizona Aircraft Spares, Inc., an Arizona corporation ("Arizona

Aircraft").

Under the Distribution, the shareholders of record as of December 28, 2004, shall receive a dividend of approximately one (1) share of Arizona Aircraft for every 9 shares of common stock of Cell Wireless Corporation held by themat that date, or an aggregate amount equal to 4,000,000 shares of Arizona Aircraft Spares common stock. The total distribution of 4,000,000 common shares will be issued pro-rata to 36,217,651 shares in the ratio held at December 30, 2004 as soon as the spun offcompany has cash to issue the share.  As of the date of the financial statements, the distribution of the 4,000,000 shares to the Company's shareholders has not been completed.

In addition, Arizona Aircraft Spares issued four million two hundred (4, 200,000) shares of Arizona Aircraft Spares, Inc. common stock to former senior management of the Company and consultants.

Other than completing certain ministerial corporate acts, there is no operating or business relationships between Cell Wireless and Arizona Aircraft at the spin off date or any relationship currently planned.

The Company's investment in Arizona Aircraft represents 20% interest in that corporation's outstanding common stock. The Company does not have the ability to exercise significant influence over operating and financial policies, asdefined under FIN No. 46.  The estimated fair value of the investment is $0 as of June 30, 2005, and in accordance with APB 18, the Company does not utilize the equity method of accounting in connection with this investment.

Reclassification

Certain reclassifications have been made to conform prior periods’ data to the current presentation. These reclassifications had no effect on reported income.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments withcredit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. There was no allowance for doubtful accounts at June 30, 2005.

Stock Based Compensation

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123, "Accounting for Stock-Based Compensation," toprovide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures inboth annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has chosen to continue to account for stock-based compensation using the intrinsicvalue method prescribed in APB Opinion No. 25 and related interpretations. Accordingly, compensation expense for stock options is measured as the excess, if any, of the fair market value of the Company's stock at the date of the grant over the exercise price of therelated option. The Company has adopted the annual disclosure provisions of SFAS No. 148 in its financial reports for the year ended December 31, 2003 and has adopted the interim disclosure provisions for its financial reports for the subsequent periods. The Companyhas had no stock based employee compensation during the period of this report.

Revenue Recognition

The Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB104”), which superceded Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements(“SAB101”).

SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4)collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts.  Provisions for discountsand rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such timethat the Company and the customer jointly determine that the product has been delivered or no refund will be required.

The Company generates revenues from the forward purchase of specified amount of airtime by customers.  Revenues are recognized as credits as airtime is used.  Unused airtime is carried on the balance sheet and isincluded under unused telecom revenue within other current liabilities. Connection fees are recognized as revenue upon initial signing of contract with customers.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly actualresults could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held in bank deposit accounts and short term, highly liquid maturities of three months or less at the date of purchase. Cash equivalents are carried at amortized cost, which approximatefair value.

Foreign Currency Translation

The Company translates the foreign currency financial statements in accordance with the requirements of Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation.”  Assets and liabilitiesare translated at current exchange rates in effect during the period.  Resulting translation adjustments are recorded as a separate component in stockholder’s equity.  Foreign currency transaction gains and losses are included in the statement ofshareholders equity and the statement of operations when applicable..

Long-Lived Assets

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

Net Earnings Per Share

The Company computes earnings per share under Financial Accounting Standard No. 128, "Earnings per Share" (SFAS 128). Net income per common share is computed by dividing net income by the weighted average number of shares ofcommon stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents consist of shares to be issued upon conversion of convertible preferred shares and the exercise of the Company's stock options and warrants (calculatedusing the treasury stock method). During the period of this report common stock equivalents are not considered in the calculation of the weighted average number of common shares outstanding because they would be anti-dilutive, thereby increasing the net income percommon share.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive Income,” establishes standards for reporting and displaying of comprehensive income, its components and accumulatedbalances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under currentaccounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company does not have any items of comprehensive income in any of the periodspresented.

NOTE B- RESTRICTED CASH

Pursuant to an agreement with a credit card processing agent under a credit card marketing agreement (“Agent”), the Company agreed to deposit a portion of its credit card proceeds the Agent processes on behalf of theCompany from sales of its services and airtime  into an restricted non-interest bearing account to secure the Agent against  invalid credit card  charges.  The funds will be released in September 2005.  As of June 30, 2005, the amount has notbeen released to the Company amounted $139,348. 

NOTE C- PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Minor additions and renewals are expensed in the year incurred. Depreciation is calculated using the straight line method over the estimated useful lives of the assets. The property andequipment owned as of June 30, 2005 are as follows:

Description      Amount

Furniture & fixtures                                                       $          22,530

Computers & software      328,005

      350,535

Less accumulated depreciation      (68,578)

Property & equipment, net                                                         $       281,957

NOTE  D- INTANGIBLE ASSETS

The cost to acquire the intangible assets has been allocated to the assets acquired according to estimated fair values

The Company has adopted SFAS No. 142, Goodwill and Other Intangible Assets, whereby the Company periodically tests its intangible assets for impairment on an annual basis.  When there is reason to suspect that their valueshave been diminished or impaired, these assets will  be tested for impairment, and write-downs to be included in results from operations may be necessary.

The intangible assets acquired are:

      Gross Carrying Amount      Accumulated Amortization      Net      Residual Value      WeightedAverage Amortization Period (Years)

Amortizable Intangible Assets:      $3,080,000      $102,500      $2,977,500  $0.00      15

Total amortization expense charged to operations for the three months ended June 30, 2005 and 2004 was $51,200 and $0.00, respectively. The intellectual property was acquired in July, 2004.

Estimated amortization expense for the years ended December 31 is as follows:

2005  $       205,000

2006      205,000

2007      205,000

2008      205,000

2009                     205,000

Total            $   1,025,000

NOTE E- ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at June 30, 2005 are comprised of the following:

Accounts payable      $254,360

Income taxes payable       25,151

Accrued Payroll and  taxes payable               50,763

Members cash accounts      132,643

Unused Telecom revenue      768,530

Total       $1,231,447

Unused telecom charges are the accumulated prepaid accounts of the members and users of the telecom system.  Members Cash Accounts are prepaid cash and commissions not yet applied to services or withdrawn.  Since mostcharges are prepaid by credit or debit card, unused time is booked to the liability account and reflects the estimate of management totaling $ 768,530 for the total unused minutes at June 30, 2005.  These funds are non-refundable and will be recorded as incomewhen used by the member.  Members cash accounts are subject to withdrawal by the members.

Income Taxes Payable

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

Income taxes are not due until after the year end December 31, 2005.  Taxes are estimated at a rate of 30% of net income during the interim periods and adjusted to actual at year end.  Since the company does business inover 200 countries, the provision for taxes is difficult to predict, but the Australian rates for federal and state taxes in use in this report are an indication of the tax rates in most countries.  Our prediction of taxes due are as follows:

Type of Tax      Rate  TaxSix Months  Ended June 30, 2005

Federal Taxes             $25,151

Australian rates       30%        

Note Payable Performance Funding:

On March 17, 2005, Cell Wireless agreed to pay an outstanding debt of Arizona Aircraft Spares, Inc., its predecessor. The Company agreed to relinquish funds garnished in the amount of $16,935 as payment at the agreement date andto pay the balance of $192,745 over a period of 12 months with equal payments of $16,062 and interest in the amount of $9,637 on March 15, 2006. Since this agreement is a full assumption of the debt of Arizona Aircraft Spares, Inc., it is included in the balancesheet of Cell Wireless Corporation for the period ended June 30, 2005 and December 31, 2004.  Two payments have been made by AASI and the balance is $160,601 at June 30, 2005.

NOTE F – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 10,000,000 shares of preferred stock, with $0.001 par value per share. As of June 30, 2005 there were no preferred shares issued and outstanding. The Company is authorized to issue 500,000,000shares of common stock, with $0.001 par value per share.

Pursuant to the Asset Acquisition Agreement (see Note A) consummated on March 9, 2005,   59,078,617 common shares were issued to the shareholders of 1Cellnet for the assets acquired in the Agreement.

As of June 30, 2005, the Company has issued and outstanding 95,296,270 common shares.

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

Overview

The following information should be read in conjunction with the financial statements and the notes thereto, as well as the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations"from the Company's merger agreement Report on SEC Form 8-K.  The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

General Business Description

Cell Wireless Corporation (CLWL) is a Nevada Corporation, formerly Arizona Aircraft Spares, Inc., whose business offices are currently located in Tucson, Arizona and Surfers Paradise, Queensland, Australia.  The Company wasformed in November, 2000, is now involved in the marketing and sale of wireless telephone long distance services to individuals and businesses. "Cell Wireless Corporation" is an internet retailer of long distance phone services, and is supplying both standard lineand custom tailored solutions to residential and corporate business telephone service users in selected global markets. 

The unique selling position of "Cell Wireless Corporation" is the facility that allows customers (Member/Marketers) to network market the service products and therefore expand the user market by attracting additional members tothe system.  Each member can be both a seller and a user of the services.  There are currently more than 75,000 active member/users aligned with the service system.  New users must become a member and pay a member fee and a deposit on telephoneservice.  Renewals or recharges to a member’s account are paid in advance by credit card or bank transfer and credited for telephone time used.

Telephone time is currently purchased world wide from MCI, and then resold to the members at a markup.  Elaborate software systems are utilized to assure that time used is charged to the members account and subsequently paidto the MCI time provider.  Each member receives commissions from sponsored members use.  The purchase of telephone time and the membership fees are the revenue stream of the company. 

The major expenses of the Company is the purchase of the telephone time from MCI and maintaining membership records to properly allocate commissions and expenses to members accounts in over 200 countries worldwide.  All ofthe above is accomplished by the use of several proprietary software systems that have been developed or purchased over the last several years

FORWARD-LOOKING STATEMENTS

 

EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLYFROM THOSE SET FORTH IN SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, WITHOUT LIMITATION, THE COMPANY'S DEPENDENCE ON THE TIMELY DEVELOPMENT, INTRODUCTION AND CUSTOMER ACCEPTANCE OF PRODUCTS, THE IMPACT OF COMPETITION AND DOWNWARD PRICINGPRESSURES, THE ABILITY OF THE COMPANY TO REDUCE ITS OPERATING EXPENSES AND RAISE ANY NEEDED CAPITAL, THE EFFECT OF CHANGING ECONOMIC CONDITIONS, RISKS IN TECHNOLOGY DEVELOPMENT AND THE EFFECTS OF OUTSTANDING LITIGATION. OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTSTO DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH FORWARD-LOOKING STATEMENTS INCLUDE THE RISKS AND UNCERTAINTIES DETAILED IN THE COMPANY'S MOST RECENT FORM 10-KSB AND ITS OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME.

Overview

On March 9, 2005 the Company completed the acquisition of the assets of 1Cellnet, LLC (“1Cellnet”). For accounting purposes, the Company has accounted for the transaction as a reverse acquisition and  CellWireless is  the surviving entity. 1Cellnet ‘s predecessor is Global TLC Pty LTD ACN 107 826 782  (“Global”), an entity formed under the laws of the Country of Australia. The following discussion and analysis represents 1Cellnet results ofoperations during the six  months ended June 30, 2005.  The company was privately owned in 2004 and its audited statements presented in this report are the results of operations for that private company.  Since current management was not in control atthe time of the prior statements, no comments are made concerning those statements herein.

The Company's revenues are difficult to forecast and may vary significantly from quarter to quarter. In addition the Company's expense levels for each quarter are, to a significant extent, fixed in advance based upon the Company'sexpectation as to the net revenues to be generated during that quarter. The Company therefore is generally unable to adjust spending in a timely manner to compensate for any unexpected shortfall in net revenues.  Further as a result of these factors any delay inproduct introductions, whether due to internal delays or delays caused by third party difficulties, or any significant shortfall in demand in relation to the Company's expectations, would have an almost immediate adverse impact on the Company's operating results andon its ability to maintain profitability in a quarter.

 

During the first six months of the year, the revenues of the company reached $1,982,016 and net profits were $83,835 before tax provision of $25,151.  After deducting cost of sales of $974,078 and administrative expenses of$924,103 and income tax provision of $25,151, the company net income was $58,685.  Cash flows from operations totaled ($48,783) due to add back of non-cash expenses of depreciation and amortization totaling $127,537.  The company’s expenses increasedsubstantially this period because of the completion of the audit and the merger transaction.  Audit and accounting consulting fees in the amount of $182,270 were accrued in expenses during this period.  In addition, the company recognized additionalliabilities in connection with the acquisition of 1 Cellnet  of approximately   $309,592, which was  charged to operations in  ht period ended June 30, 2005.  The net effect of the two major adjustments equaled $491,862 charge to netincome for the six months ended June 30, 2005.

While the Company's expenses are, to a significant extent, fixed in advance, the Company is making efforts to adjust spending in relation to net revenues until such time that a new member drive commences and new revenue streamsare developed. However, there can be no assurance that new members will be recruited by the Company, or if signed on, that such new member revenues will be on a timely basis.  Substantial effort is being put forth to increase the revenue from existing membersand the results of these efforts will be realized during the remainder of the year and continue in the future. Failure to accomplish these goals on a timely basis would have a severe material adverse effect upon the Company.

Comparison of the Three Months Ended June 30, 2005 (the "2005 Period") with the Three Months Ended June 30, 2004

Revenues:

During the three months ended June 30, 2005 the Company generated revenues of $563,584, compared to $3,643,454 during the same period in 2004, a $3,079,870, or an 85% decrease.  The main reason for the reduction in sales isthat the company was receiving substantial revenues from new member sign up fees for the nearly 140,000 members that came to the company in its first 14 months of operations.  The Company was unable to handle the growth and international credit card fraud andsubstantial non-performance by contracting service systems providers.  The Company has made great strides in the last two quarters of 2004 to reduce the reliance on outside contracting by acquiring the intellectual property and equipment necessary to be selfcontained.  In addition, by switching credit card  service providers and developing proprietary software systems that contain control features, the credit card fraud of the past has been reduced to occasional.  The result is a profitable company withits management systems under complete control and revenues are once again on the rise.  Management is projecting modest growth in the next year and conservatively expects modest growth to continue at rates equal to the extremely fast growing competitivemarket.

Cost of Sales

For the three months ended June 30, 2005, the Company's gross profit margin was 48% compared to 15% for the same three months of 2004. Due to large commission costs in 2004 and the high payout of service related fees, the cost ofsales for the private company was 33% higher than the results of operations for the second quarter of 2005.  The increased margins are due to the efforts of management to control the operations of the company and to pull its operations under its own roof to stopinconsistent service provided by outside contractors.  The Company’s margins will fluctuate from period to period because absorbed overhead increases when volume decreases.

Selling, General and Administrative Expenses

 

The Company's selling, general and administrative expenses increased $ 282,438 to $520,711 in the second quarter of 2005 as compared to $238,273 for the three months ended June 30, 2004.  This increase is indicative of thefact that cutting costs of administration is related to the minimum cost of doing business.  Management does not expect reductions in the administrative costs of the company and is projecting an increase due to the cost of being a public entity.

Administrative expenses for consultants, legal costs, audits and accounting services will all increase during this 2005 period over the 2004 period. In addition, there are further increases expected in the coming years. Although the Company's general and administrative expenses are, to a significant extent, fixed in advance, the Company is making efforts to adjust spending in relation to the expected net revenues. The Company has yet to complete all increased expense items relatingto its public company status.  Until these expense categories have gone full cycle, the administrative expenses will continue to rise but will become more controlled in relation to sales revenue as the Company becomes well funded and revenuesincrease.

As the Company continues to expand, it will incur additional costs for personnel, marketing and travel. In order for the Company to attract and retain quality personnel, management anticipates it will continue to offer competitivesalaries, issue common stock to employees, and grant Company stock options to current and future employees.

Liquidity and Capital Resources

As of June 30, 2005, the Company had current assets of $267,662 and current liabilities of $1,392,048 which resulted in a negative working capital position of $1,124,386. Estimated income tax provision for interim period taxes inthe amount of $25,151 will be due in March, 2006. $160,601 of this deficiency is the Performance Funding note described above.  This note requires payments of $16,092 per month for twelve months.  Arizona Aircraft Spares, Inc. is liable for the note andmade the first two payments totaling $32,124. The results of operations created a net cash used in operations of $ 49,083 , adjusted for depreciation and amortization, along with changes in working capital. Cash used in investing activities represented an increase inrestricted capital reserve account in the amount of  $ 6.343 to $139,348 as of the date of this report. The reserve is the requirement of credit card processors for retention of a 10% amount of credit cards processed.  These funds are restricted for up toone year and are not available for operations until released.  The Company met its cash requirements during the period through operations and has not yet tapped the market for borrowings and sale of capital stock.

The Company is also pursuing other financial resources to augment its cash requirements for retirement of debt, expansion of operations and acquisition of suitable companies and products.  A restricted stock placement tosophisticated investors is an example of a cash infusion that will provide the Company with much needed working capital to continue its expansion and sales growth into international and domestic markets. We currently have no commitments for financing. There is noguarantee that we will be successful in raising the funds required.

By adjusting our operations and development to the level of capitalization, we believe we have sufficient capital resources to meet projected cash flow deficits. However, if during that period or thereafter, we are not successfulin generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to management, this could have a material adverse effect on our business, results of operations liquidity and financial condition

Application of Critical Accounting Policies

During December, 2002 the Financial Accounting Standards Board (FASB) issued a proposed Statement, Share-Based Payment, an amendment of FASB Statements No. 123 and 95, that would require companies to account for stock-basedcompensation to employees using a fair value method as of the grant date. The proposed statement addresses the accounting for transactions in which a Company receives employee services in exchange for equity instruments such as stock options, or liabilities that arebased on the fair value of the Company’s equity instruments or that may be settled through the issuance of such equity instruments, which includes the accounting for employee stock purchase plans. This proposed statement would eliminate a Company’sability to account for share-based awards to employees using APB Opinion 25, Accounting for Stock Issued to Employees but would not change the accounting for transactions in which a company issues equity instruments for services to non-employees or the accounting foremployee stock ownership plans. The proposed statement, if adopted, would be effective for awards that are granted, modified, or settled in fiscal years beginning after December 15, 2004. The Company is in the process of assessing the potential impact of thisproposed statement to the financial statements.

Non-GAAP Financial Measures

The financial statements appearing in this quarterly report on Form 10-QSB do not contain any financial measures which are not in accordance with generally accepted accounting procedures.

The Company's independent certified public accountant has stated in their report included in the Company's December 31, 2004 Form 10-KSB, that the Company is having difficulties generating sufficient cash flows to meet itsobligations and that the Company is dependent upon management's ability to develop profitable operations. These factors among others may raise substantial doubt about the Company's ability to continue as a going concern.

Inflation

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

Off-Balance Sheet Arrangements

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

Trends, Risks and Uncertainties:

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified allpossible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock.

Cautionary Factors That May Affect Future Results

We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business and our products. These are factors that we think could cause our actual results to differmaterially from expected results. Other factors besides those listed here could adversely affect us.

Potential Fluctuations In Annual Operating Results

Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the demand for our products; seasonal trends in purchasing, the amountand timing of capital expenditures and other costs relating to the development of our products; price competition or pricing changes in the industry; technical difficulties or system downtime; general economic conditions, and economic conditions specific to thetelephone service industry. Our results may also be significantly affected by the impact of the accounting treatment of acquisitions, financing transactions or other matters. Particularly at our early stage of development, such accounting treatment can have amaterial influence on the results for any period. Due to the foregoing factors, among others, it is likely that our operating results will fall below our expectations or those of investors in some future period.

Dependence Upon Management

Our future performance and success is dependant upon the efforts and abilities of our Management. To a very significant degree, we are dependent upon the continued services of John Bohringer, our Chief Executive Officer andChairman of the Board of Directors and David L. Shorey, CPA, our Chief Financial Officer and member of our Board of Directors. If the Company lost the services of either Mr. Bohringer or  Mr. Shorey, or other key employees before we could get qualifiedreplacements that loss could materially adversely affect our business. We do not maintain key man life insurance on any of our Management.

Lack of Independent Directors

We cannot guarantee that our Board of Directors will have a majority of independent directors in the future. In the absence of a majority of independent directors, our executive officers, who are also principal stockholders anddirectors, could establish policies and enter into transactions without independent review and approval thereof. This could present the potential for a conflict of interest between the Company and its stockholders generally and the controlling officers, stockholdersor directors.

Limitation of Liability and Indemnification of Officers and Directors

Our officers and directors are required to exercise good faith and high integrity in our Management affairs. Our Articles of Incorporation provide, however, that our officers and directors shall have no liability to ourshareholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated their duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated thelaw, approved an improper dividend or stock repurchase, or derived an improper benefit from the transaction. Our Articles and By-Laws also provide for the indemnification by us of the officers and directors against any losses or liabilities they may incur as a resultof the manner in which they operate our business or conduct the internal affairs, provided that in connection with these activities they act in good faith and in a manner that they reasonably believe to be in, or not opposed to, the best interests of the Company, andtheir conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations. To further implement the permitted indemnification, we have entered into Indemnity Agreements with our officers and directors.

Continued Control by Current Officers and Directors

The present officers and directors do not own the majority of the outstanding shares of the Company’s common stock.  They are not in a position to elect all of our Directors and otherwise control the Company. Theycannot authorize the sale of equity or debt securities of the Company, complete the appointment of officers and the determine officers' salaries. Shareholders have no cumulative voting rights.

Management of Potential Growth

We anticipate rapid growth, which will place a significant strain on our managerial, operational, and financial systems resources. To accommodate our current size and manage growth, we must continue to implement and improve ourfinancial strength and our operational systems, and expand, train and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage the expansion of our operations, or that our facilities, systems, procedures or controlswill be adequate to support our expanded operations. Our inability to effectively manage our future growth would have a material adverse effect on the Company.

Limited Market Due To Penny Stock

The Company's stock differs from many stocks, in that it is a "penny stock." The Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." These rules include, but are not limited to, Rules3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as amended. Because our securities probably constitute "penny stock" within the meaning of the rules, the rules would apply to us and our securities. The rulesmay further affect the ability of owners of our stock to sell their securities in any market that may develop for them. There may be a limited market for penny stocks, due to the regulatory burdens on broker-dealers. The market among dealers may not be active.Investors in penny stock often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers may be greater than any profit a seller may make. Because of large dealer spreads, investors may be unableto sell the stock immediately back to the dealer at the same price the dealer sold the stock to the investor. In some cases, the stock may fall quickly in value. Investors may be unable to reap any profit from any sale of the stock, if they can sell it at all.Stockholders should be aware that, according to the Securities and Exchange Commission Release No. 34- 29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include: - Control of the market for the securityby one or a few broker-dealers that are often related to the promoter or issuer; - Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; - "Boiler room" practices involving high pressure sales tactics andunrealistic price projections by inexperienced sales persons; - Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and - The wholesale dumping of the same securities by promoters and broker- dealers after prices have beenmanipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. Furthermore, the "penny stock" designation may adversely affect the development of any public market for the Company's shares of common stock or, ifsuch a market develops, its continuation. Broker-dealers are required to personally determine whether an investment in "penny stock" is suitable for customers. Penny stocks are securities (i) with a price of less than five dollars per share; (ii) that are not tradedon a "recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an issuer with net tangible assets less than $2,000,000 (if the issuer has been incontinuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000 for the last three years. Section 15(g) of the Exchange Act and Rule 15g-2 of the Commissionrequire broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for theinvestor's account. Potential investors in the Company's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock." Rule 15g-9 of the Commission requires broker-dealers in penny stocks toapprove the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experienceand investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of pennystock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that itaccurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for the Company's stockholders to resell their shares to third parties or to otherwise dispose ofthem.

Statements appearing in this  10 QSB do not contain any financial measures which are not in accordance with generally accepted accounting procedures.

ITEM 3 CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls andprocedures (as defined in Rules 13a-15(e) of the Exchange. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are adequately effective as of June 30, 2005 to ensure timely reportingwith the Securities and Exchange Commission. Our management is constantly in the process of identifying deficiencies with respect to our disclosure controls and procedures and implementing corrective measures for improvement, which includes the establishment of newinternal policies related to financial reporting.

        

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d), the Company’s Chairman and Chief Financial Officer, also conducted an evaluation of the Company’s internal controls over financial reporting to determine whether any changes occurredduring the  fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. There were no  changes in the Company's internal controls or in other factors that couldmaterially affected or are reasonable likely to materially affect, the Company's internal controls subsequent to the date of the most recent evaluation.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any controlsystem is based in part upon certain assumptions about the likelihood of future events. 

PART II OTHER INFORMATION

Item 1 Legal Proceedings

Shortly after the announced Asset Acquisition Agreement between the Company and 1Cellnet, LLC, a lawsuit was filed for collection of a secured promissory note of Arizona Aircraft Spares, Inc. (the Company’s formerwholly-owned subsidiary) in the approximate amount of $218,470 representing the amounts due on the note, interest, legal fees and settlement costs.

On March 17, 2005, Cell Wireless agreed to pay the outstanding debt and the Court dismissed the legal action with prejudice. In connection with the settlement, the Company agreed to pay $192,745 over a period of 12 monthsbeginning in March, 2005, with equal payments of $16,062 and interest in the amount of $9,637 on March 15, 2006. At December 31, 2004, the Company had accrued a liability of $160,601 in connection with the litigation.   The current balance on this liabilityis $160,601 at June 30, 2005.

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

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

On March 9, 2005 the Company issued 59,078,619 common shares of its common stock in connection with the consummation of its acquisition of the 1Cellnet assets. This issuance is considered exempt under Regulation D of theSecurities Act of 1933 and Rule 506 promulgated thereunder

 

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

     (a). Exhibits

         Exhibit (31) Certifications pursuant to Section 302, of the Sarbanes-Oxley Act of 2002

              (1)  Certification by John Bohringer

              (2)  Certification by  David L. Shorey

        

Exhibit (32)  Certifications pursuant  to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002.

              (1)  Certification by  David L. Shorey

              (2)  Certification by John Bohringer

 

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

                                                  CELL WIRELESS CORPORATION

                                                          

Date: August 22 , 2005                             By: /s/ John Bohringer 

                                                       John Bohringer 

                                                        President and Chief Executive Officer

                                                     

Date: August 22, 2005                            By: /s/ David L. Shorey

                                                  

                              David L. Shorey

           Chief Financial Officer

 

Exhibit 31.1                               CERTIFICATION

I, John Bohringer, certify that:

1.    I have reviewed this quarterly report on Form 10-QSB of Cell Wireless Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flowsof the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrantand have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under supervision, to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, asof the end of the period covered by this report based on such evaluation; and

c)      Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscalquarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of theregistrant's board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 22 , 2005         By: /s/ John Bohringer

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

                                          

President and Chief Executive Officer

  (Principal Executive Officer)

 

Exhibit 31.2                               CERTIFICATION

I, David L. Shorey, certify that:

6.    I have reviewed this quarterly report on Form 10-QSB of Cell Wireless Corporation;

7.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

8.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flowsof the registrant as of, and for, the periods presented in this report;

9.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrantand have:

d)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under supervision, to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

e)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, asof the end of the period covered by this report based on such evaluation; and

f)      Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscalquarter in the case of an annual report) that has materially affected, or is          reasonably likely to materially affect, the registrant's internal control over financial reporting; and

10.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of theregistrant's board of directors (or persons performing the equivalent functions):

c)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,process, summarize and report financial information; and

d)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 22,   2005                By: /s/ David L. Shorey

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

                                          

                                     Chief Financialofficer

 

  Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 10-QSB of Cell Wireless Corporation (the "Company") for the period ended June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the "Covered Report"),I, David L. Shorey, the principal financial officer of the Company, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that:

The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, I have executed this certificate as of this 22nd  day of  August 2005.

By: /s/David L. Shorey

David L. Shorey

Chief Financial Officer

                                    

 

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF

THE SARBANES-OXLEY ACT OF 2002

  In connection with the annual report on Form 10 Q-SB of Cell Wireless Corporation (the "Company") for the period ended June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the "CoveredReport"), I, John Bohringer, the principal executive  officer of the Company, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that:

The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, I have executed this certificate as of this 22nd  of  August, 2005.

By: /s/John Bohringer

John Bohringer

President