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

                                   FORM 10-KSB

(Mark One)
[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934
         For the fiscal year ended December 31, 2004

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the transition period from ________________ to ______________

                         Commission file number: 0-49763


                               CIROND CORPORATION
                 (Name of small business issuer in its charter)

                       NEVADA                          88-0469593
         (State or other jurisdiction of            (I.R.S. Employer
          incorporation or organization)           Identification No.)

    4185 STILL CREEK DRIVE #B-101, BURNABY, BRITISH COLUMBIA, CANADA V5C 6G9
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (604) 205-5039


       Securities registered under Section 12(b) of the Exchange Act: NONE

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

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of class)

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

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

State issuer's revenues for its most recent fiscal year:  $955,931

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days: $6,387,523 AS OF MARCH 18, 2005

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 37,110,000 AS OF MARCH 11, 2005

Transitional Small Business Disclosure Format (Check one):    Yes    ; No  X
                                                                 ---     ----



                                       1
<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT

         We were originally incorporated in the State of Nevada on April 6, 2000
to engage in the business of providing Internet-based email-to-mail printing and
delivery services. We established the eXmailit.com website which had not yet
commenced providing an Internet-based email-to-mail service. The network, which
was still under construction, was intended to consist of a consumer-based,
software product that would have a number of strategically located international
distribution centers enabling users to send email as standard mail. We did not
generate any revenue and therefore only sustained losses.

         As a result of our lack of profitability and the receipt of numerous
inquires from entities seeking to merge with us, our operational focus expanded
beyond our email-to-mail service to include reviewing potential merger or
acquisition candidates.

         On November 25, 2003, pursuant to a Stock Exchange Agreement (the
"Stock Exchange Agreement") with Seaside Holdings Inc. (f/k/a Cirond
Technologies Inc.), a Colorado corporation ("CTI"), as amended by the First
Amendment to the Stock Exchange Agreement dated November 13, 2003 (the "First
Amendment") (the Exchange Agreement and the First Amendment and collectively
referred to herein as the "Agreement"), we acquired all of the issued and
outstanding capital stock of CTI's wholly owned subsidiary, Cirond Networks
Inc., a Nevada corporation ("CNI"), in exchange for 17,000,000 post-Forward
Split shares ("Shares") of our common stock ("Common Stock"). As a result of
this share exchange, CTI owned approximately 51.2% (not taking into account the
issuance of 750,000 shares of our common stock in a private placement, the
certificates for which were issued subsequent to December 31, 2003, or 1,300,000
shares of common stock issued for the CNI Indebtedness described below) of our
issued and outstanding shares. In addition, pursuant to the terms of the
Agreement, we issued an aggregate of 1,300,000 post-Forward Split shares of our
Common Stock in exchange for $650,000 in indebtedness of CNI (the "CNI
Indebtedness"), which was held by Cirond Venture Partners Inc., Stumdell
Limited, and Steven Velardi.

         As a result of the Agreement, effective November 25, 2003, CNI became
our wholly-owned subsidiary. We changed our name to Cirond Corporation as of
October 14, 2003.

OUR BUSINESS

         CNI was founded in March 2001 to develop technologies designed to
enhance the performance and security of wireless networking technologies, with
an initial specific focus on 802.11b Wireless Local Area Network ("WLAN")
technology. A WLAN is one in which a mobile user can connect to a local area
network ("LAN") through a wireless (radio) connection. The 802.11b standard for
WLANs - often called "WiFi" - is part of the 802.11 series of WLAN standards
from the Institute of Electrical and Electronics Engineers ("IEEE"). CNI
conducts its research and development activities through its subsidiary, Cirond
Networks (Canada) Inc., a British Columbia corporation.

         CNI's initial product set, which was announced in late 2002 and shipped
in 2003, included a wireless network management and security solution, known as
Winc Manager, and a pair of wireless connectivity utilities, known as Winc and
pocketWinc.

         In late 2003, we announced a new family of products dedicated primarily
to the goal of securing wired networks against the threat of unauthorized
wireless devices (such as wireless-equipped laptop computers and wireless access
points). These products were announced under the AirPatrol name and included
AirPatrol Enterprise(TM) and AirPatrol Mobile(TM). AirPatrol Enterprise(TM) is a
network security product aimed at securing an organization's network against the
wireless threat around the clock and capable of being repurposed as a wireless
network management solution at such time as the customer implements a wireless
network. AirPatrol Mobile(TM) is a software-only solution that allows customers
to detect and locate unauthorized wireless devices and access points without the
use of any specialized hardware.


                                       2
<PAGE>

         On July 19, 2004, we announced that we were focusing our entire
resources around the AirPatrol product line as part of a comprehensive strategy
to deal with the significant threat to network security posed by the
implementation of wireless laptop computers and other wireless devices. We
believe that whenever a wireless-enabled computer is plugged into an
organization's network, and certain wireless capabilities are left on, network
security is potentially compromised, as access to the network can be
inadvertently broadcasted to unauthorized and potentially undetected users
outside the organization's premises. Similarly, we believe that the installation
of unauthorized wireless access points, which are being purchased and installed
increasingly by employees so they can use their laptops wirelessly within an
office, exposes organization networks to a high level of danger.

         Our strategy addresses wireless security threats with a two-pronged
approach: first, by addressing the problem at its source, by automatically
disabling the wireless capability of laptops whenever they are connected to the
organization's wired network; and second, by providing a comprehensive
capability to not only detect but also to located unauthorized wireless devices.
We believe this strategy enables organizations to lock out access by preventing
wireless laptops from inadvertently providing unauthorized access to the
organization's network, and to notify the organization by providing wireless
equipment detection and location capability.


PRODUCTS

Our products include the following:

         AIRPATROL ENTERPRISE(TM). AirPatrol Enterprise(TM) is a comprehensive
wireless network management and security solution designed for medium to large
organizations. AirPatrol Enterprise(TM) can be used either by organizations that
have implemented a wireless network to manage and secure it, or by organizations
to ensure against and detect the unauthorized use or implementation of wireless
technology. The product is based on the customer's server. Unlike the AirPatrol
Mobile(TM), which scans only when the user is walking around the premises
conducting a scan, the AirPatrol Enterprise(TM) scans constantly. Whenever an
unauthorized or unidentified station is identified, a pop-up box on the system
manager's screen is triggered to alert him or her of a possible problem. The
alert system can be programmed to operate on a remote computer, to an e-mail to
a hand-held computing device, or by a text message to a mobile phone. AirPatrol
Enterprise(TM) is priced at $6,995.00

         AIRPATROL SENSOR(TM). This is a hardware device that detects and
locates rogue wireless access points and rogue ad hoc networks. It weighs
approximately 1.1 pounds and measures approximately 1.4 inches by 6.1 inches by
3.9 inches. The sensor is compatible with 802.11 a, b, and g standards worldwide
and supports the IEEE 802.3af standard for Power over Ethernet, for easier and
lower cost installation. For organizations that do not currently have a wireless
network and wish to secure their organization against the security threat posed
by the unauthorized installation and use of wireless network equipment, we
recommend using several sensors in conjunction with the AirPatrol Enterprise(TM)
in each area to be monitored for wireless activity. The sensors detect and
analyze all wireless stations and airborne packets within range, process the
data, and forward the information to AirPatrol Enterprise(TM), which runs on a
desktop PC connected to the wired network. A packet is a piece of a message
transmitted over a network that contains the destination address in addition to
the data. Our retail price for this product is $495.00.

         AIRSAFE(TM). This is a software utility that automatically disables a
notebook computer's wireless radio whenever the computer is plugged into a wired
organization's network. This is designed to eliminate the possibility of a user
inadvertently wirelessly rebroadcasting an authorized connection to the
organization's network to unauthorized users. This product works with all
wireless enabled Microsoft Windows(TM)-based mobile computers. Our retail price
is $995.00 for 50 client licenses, $2,495.00 for 200 client licenses, and
$8995.00 for 1000 client licenses.

         AIRPATROL MOBILE(TM). This is a software-only solution for detecting
and locating rogue wireless devices using a laptop or tabletop mobile computer.
Users running this software can perform scans at different locations on their
premises. By performing a wireless scan at three or more locations per floor,
AirPatrol(TM) Mobile can pinpoint the location of a rogue access point using an
on-screen map of the floor plan of the premises. AirPatrol(TM) Mobile can also
detect and locate "hidden" wireless networks, which are networks configured with
the SSID identity of the wireless access point switched off, as well as 802.11a,
802.11b, and 802.11g-based wireless networks. SSID, which stands for Service Set
Identifier, is essentially a name that identifies a wireless network. Our retail
price for this product is $995.00.



                                       3
<PAGE>

         AIRPATROL SENTINEL(TM). This is a software-based network scanning tool
that provides continuous "wired side" detection of unauthorized wireless
devices. It constantly scans the wired network for any evidence of new wireless
devices being attached to the network. Upon detection of a wireless access
point, AirPatrol Sentinel(TM) displays the type of access point, its IP address,
unique MAC address, wireless channel on which it is operating, transmitter
power, and the SSID it is using. IP, which stands for Internet Protocol,
specifies the format of packets and the addressing scheme. MAC address, which is
short of Media Access Control address, is a hardware address that uniquely
identifies each node of a network. Network administrators can then use this
information to determine the location of the access point. Our retail price for
this product is $995.00.

         WINC 2.1. CNI's Winc is a software-based wireless access connectivity
tool designed to simplify the process of finding and connecting to wireless
networks, as well as diagnosing various elements of the wireless network
connection to the Internet. Winc works with mobile and desktop personal
computers running Microsoft Windows 2000, Microsoft Windows XP, and Microsoft
Windows XP Tablet PC Edition to automatically detect and connect to networks and
store personalized profiles so that users can automatically connect to networks
without having to reconfigure their settings each time. Winc also allows users
to set up ad hoc networks anywhere to share resources, such as a high-speed
connection to the Internet, and data within a workgroup, without requiring a
wireless access point. Winc is the "client software" required for implementation
of AirPatrol(TM) Enterprise. Winc 2.1 has a retail price of $19.95.

         POCKETWINC. This is a wireless access connectivity tool that provides
many of the same features as Winc, but operates on handheld computers running
the Microsoft Pocket PC 2002 and Microsoft Mobile Windows 2003 operating system
platforms. pocketWinc 2.0 has a retail price of $19.95.

SALES AND MARKETING

         We use a four-tiered method of sales and distribution as follows:

         1)       Direct sales - We offer direct sales through our Web site at
                  http://www.cirond.com - where consumers and businesses alike
                  can purchase our products online and download them.

         2)       VAR sales - our products can also be purchased through our
                  network of value added resellers (VARs), which is the method
                  often selected by mid-enterprise customers who want
                  installation and maintenance support for our wireless network
                  and security management solutions.

         3)       Licensing - In addition to sales of our branded products, we
                  also achieve revenue through licensing of our technology by
                  other software development firms and wireless network hardware
                  manufacturers.

         4)       Marketing representatives - We have engaged Regency Capital
                  Partners to introduce our products to the Central Intelligence
                  Agency, the National Security Administration, various branches
                  of the military, and other government entities. Through this
                  relationship, we have a presence in Arlington, Virginia.

CUSTOMERS

         During the fiscal year ended December 31, 2004, a source code licensing
agreement with Computer Associates generated 83% of our revenues. During the
current fiscal year, we do not expect to be dependent on any key customers.

COMPETITION

         The WiFi, or WLAN industry, is characterized by intense competition.
There are many companies, both public and private, offering WiFi management and
security solutions. Our solutions cover a broad range of competitors. These
competitors include companies such as AirDefense, Airespace, AirMagnet, Inc.,
Aruba Wireless Networks, Cisco Systems, Inc., Network Chemistry, Network
Instruments, LLC, and Newbury Networks, Inc. Most


                                       4
<PAGE>

of these firms have products that protect wireless networks from outside
attacks. We believe that our most significant competitive advantage is that our
product protects a wired network against attack from a connected laptop that is
wireless enabled.

         We believe that customers select products based on cost, ease of
installation and use, and product features, and that we compete favorably on
these factors. Since our products are software, with the exception of AirPatrol
Sensor(TM), customers do not have to purchase specialized hardware. Our software
can be downloaded and immediately operational.

         Many, if not most of our competitors, however, have greater financial
resources and have been able to market their products more extensively. Some of
our competitors have existing customers bases for non-competitive products,
which provides them with the advantage of greater market recognition.

PATENTS

         We recently filed provisional patents in the United States and Canada
on our AirSafe(TM) product. We have until May 29, 2005 to take further action in
order to maintain this patenting pending status.

RESEARCH AND DEVELOPMENT

         During the fiscal years ended December 31, 2004, 2003 and 2002, we
spent $576,894, $404,886, and $251,438, respectively, on research and
development activities.

GOVERNMENT REGULATION

         We do not anticipate that any government regulations will significantly
affect our business.

EMPLOYEES

         As of December 31, 2004, we employed a total of 14 persons, of which 7
were full-time and 7 were consultants. None of our employees is covered by a
collective bargaining agreement.


ITEM 2.  DESCRIPTION OF PROPERTY.

         Our principal offices are located at 4185 Still Creek Drive, Suite
B101, Burnaby, British Columbia, Canada. The base rent on the lease is CDN$2,644
per month. The operating costs relating to the lease are approximately CDN$4,256
per month. We lease approximately 3,173 square feet under a lease that expires
April 30, 2006.

         We lease approximately 400 square feet of office space at 1999 Bascom
Avenue, Suite 700, Campbell, California, at a cost of approximately $800 per
month, on a month-to-month basis.


ITEM 3.  LEGAL PROCEEDINGS.

         We are not a party to any pending legal proceedings.


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

         None.




                                       5

<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

         Our common stock has been listed on the over-the-counter bulletin board
("OTCBB") since September 3, 2002, originally under the symbol "EXMA." Since
October 16, 2003, it has been listed under the symbol "CROO." The trading symbol
often appears as "CROO.OB" in quotation requests on the Internet. Trading did
not commence until December 5, 2003. The following table sets forth the range of
high and low bid quotations for each fiscal quarter for the last two fiscal
years and the current fiscal year, and have been adjusted to reflect a 1-for-16
reverse stock split. These quotations reflect inter-dealer prices without retail
mark-up, mark-down, or commissions and may not necessarily represent actual
transactions.

         FISCAL QUARTER ENDING                      HIGH BID          LOW BID

         December 31, 2003...................       $   1.01         $   1.01
         March 31, 2004......................       $   1.50         $   0.65
         June 30, 2004.......................       $   1.50         $   1.26
         September 30, 2004..................       $   1.60         $   0.85
         December 31, 2004...................       $   1.38         $   0.45

         On March 18, 2005, the closing bid price for the common stock on the
OTC Bulletin Board was $0.25.

HOLDERS

         As of March 11, 2005, there were 164 record holders of our common
stock.

DIVIDENDS

         We do not anticipate paying dividends on our common stock at any time
in the foreseeable future. Our board of directors plans to retain earnings for
the development and expansion of our business. Our directors also plan to
regularly review our dividend policy. Any future determination as to the payment
of dividends will be at the discretion of our directors and will depend on a
number of factors, including future earnings, capital requirements, financial
condition and other factors as the board may deem relevant. We cannot pay any
dividends on our common stock if any dividends due on our outstanding Series B
preferred stock are unpaid. Dividends of $2,466 were accrued to December 31,
2004 related to redeemable, convertible preferred stock issued on December 22,
2004.

SALES OF UNREGISTERED SECURITIES

         All sales of unregistered equity securities made during the quarter
ended December 31, 2004 were reported in our current reports on Form 8-K.


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

OVERVIEW

         On November 25, 2003, pursuant to a Stock Exchange Agreement with
Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.), a Colorado corporation
("CTI"), as amended by the First Amendment to the Stock Exchange Agreement dated
November 13, 2003 (the "First Amendment") (the Exchange Agreement and the First
Amendment are collectively referred to herein as the "Agreement"), we acquired
all of the issued and outstanding capital stock of CTI's wholly owned
subsidiary, Cirond Networks, Inc., a Nevada corporation ("CNI"), in exchange for
17,000,000 post-Forward Split shares of our common stock. As a result of this
share exchange, CTI owned approximately 51.2% (not taking into account the
issuance of 750,000 shares of our common stock in a private placement, the
certificates for which were issued subsequent to December 31, 2003, or 1,300,000
shares of common stock issued


                                       6
<PAGE>

for the CNI Indebtedness described below) of our issued and outstanding shares.
In addition, pursuant to the terms of the Agreement, we issued an aggregate of
1,300,000 post-Forward Split shares of our common stock to fulfill CNI's debt
obligations totaling $650,000 owed to Cirond Venture Partners Inc., Stumdell
Limited, and Steven Velardi. These three parties loaned $650,000 to CNI and
agreed to be paid in shares at the same price at which shares were sold in the
private placement.

         As a result of the Agreement, effective November 25, 2003, CNI became
our wholly-owned subsidiary. We changed our name to Cirond Corporation as of
October 14, 2003.

         For accounting purposes, the acquisition of CNI has been accounted for
as a recapitalization transaction. Under recapitalization accounting, CNI is
considered to have issued shares for consideration equal to our net monetary
assets with the results of our operations included in the consolidated financial
statements from the date of recapitalization on November 25, 2003. The
consolidated statements of loss, stockholders' deficiency and comprehensive loss
and cash flows reflect the results of operations and changes in financial
position of CNI, for the period from January 1, 2003 to December 31, 2003 and
January 1, 2004 to December 31, 2004, combined with those of the legal parent,
Cirond Corporation, from November 25, 2003, the date of the recapitalization, in
accordance with accounting principles generally accepted in the United States of
America.

         As CNI is a software development company, it earns revenues through
license sales of its products, all of which utilize the proprietary technology
developed by CNI. Development of the technology requires a significant outlay of
cash before a viable product is developed that utilizes the technology. After
development of a product, even more cash is required to market the product
before any revenues are realized. Accordingly, the challenge that faces many
software development companies is being able to obtain enough cash to fund
research and development and marketing expenses and sustain the company until
revenues are generated. Such funds are needed fairly quickly after products are
developed, as the environment in which the products are used is constantly
changing. Companies face the risk of discovering that their products do not meet
the needs of the potential customers or are technologically outdated after a
marketing campaign is launched.

         CNI entered into the above transaction with a publicly-held company to
improve its ability to obtain funding for research and development of its
products and marketing efforts. Management believed that it would be easier to
obtain funding if investors identified an "exit strategy" via the public
marketplace. By entering into the non-exclusive source code licensing agreement
with Computer Associates International, Inc. in January 2004, management
believed that CNI had achieved validation of its product by a well-recognized
firm in the computer industry. During 2004, we raised $323,500 through the
issuance of our common shares for cash and $1,815,000 through the sale of
convertible preferred shares. In addition, we were able to pay for the
consulting services of Securities Trading Services Inc. with common shares. We
used these funds for operations, which included research and development
expenses of $576,894 and marketing efforts.

         While we will continue to improve our products, we believe that we have
now developed a viable suite of products dedicated to the goal of securing wired
networks against the threat of unauthorized wireless devices that is ready for
the marketplace. For the current fiscal year, management is focusing its efforts
and resources on marketing products through several channels. While we are
pursuing the licensing of our technology to other software development firms and
wireless network hardware manufacturers, such as the Computer Associates type of
arrangement, we are also trying to offer direct sales through our web site,
through value added resellers, and through marketing representatives.

GOING CONCERN

         The accompanying consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America, which contemplate continuation of our company as a going concern. We
had net losses of $1,437,439 and $1,063,962 and negative cash flows from
operations of $1,155,226 and $925,867 for the years ended December 31, 2004 and
2003, respectively. At December 31, 2004, we had an accumulated deficit of
$3,141,514. These factors raise substantial doubt as to our ability to continue
as a going concern.


                                       7
<PAGE>

         The application of the going concern concept is dependent upon our
ability to receive continued financial support from our creditors, stockholders
and external investors and attaining profitable operations through the sale of
our software. These consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of liabilities that might be necessary
should we be unable to continue as a going concern and, therefore, be required
to realize our assets and discharge our liabilities in other than the normal
course of operations. Management plans to obtain equity and debt financing from
external investors and to actively market our network security applications.

         Management believes the plan described above will be sufficient to meet
our liabilities and commitments as they become payable over the next twelve
months. There can be no assurance that management's plan will be successful.
Failure to obtain the support of additional external investors to finance the
development and marketing of our network security applications will cause us to
curtail operations and impair our ability to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

         Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities. On an ongoing basis, we evaluate our
estimates, including those related to the valuation of accounts receivable and
inventories, the impairment of long-lived assets, any potential losses from
pending litigation and deferred tax assets or liabilities. We base our estimates
on historical experience and on various other assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions; however, we believe that
our estimates, including those for the above-described items, are reasonable.

         REVENUE RECOGNITION. In accordance with the provisions of the American
Institute of Certified Public Accountant's Statement of Position 97-2 "Software
Revenue Recognition," revenue from software license sales, both directly and
through value-added resellers, is recognized once delivery has occurred,
evidence of an arrangement exists, the fee is fixed and determined and
collection of the fee is probable, provided there are no significant vendor
obligations remaining. We estimate allowances for returns arising from warranty
provisions based on historical experience. For multiple element arrangements,
where Vendor Specific Objective Evidence ("VSOE") of fair value is available for
all elements, the contract value is allocated to each element proportionately
based upon relative VSOE of fair value and revenue is recognized separately for
each element. Where VSOE of fair value is available for all undelivered
elements, the residual method is used to value the delivered elements. Where
VSOE of fair value is not available for an undelivered element all revenue for
the arrangement is deferred until the earlier of the point at which VSOE does
exist or all elements of the arrangement have been delivered, unless the
undelivered elements are post contract customer support arrangements, in which
case the arrangement revenue is recognized ratably, or services, in which case
the arrangement revenue is recognized as the services are provided. Periodically
we sell to value-added resellers ("VAR") under terms consistent with those
applied to other customers. We do not offer price protection or rights of return
to VARs and consideration terms and sales are not dependent on the option of the
resellers.

RESULTS OF OPERATIONS

         FISCAL YEAR ENDED DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED
DECEMBER 31, 2003

         Revenues from operations increased from $27,649 for the year ended
December 31, 2003 to $955,931 for the year ended December 31, 2004. Revenue from
the Source Code Licensing agreement described above, which closed in the first
quarter of 2004, accounted for approximately 83% of revenues for the 2004 fiscal
year. We also received revenue from licensing of our Winc Manager, Winc,
pocketWinc and recently introduced AirPatrol Mobile, AirPatrol Sentinel and
AirPatrol Enterprise software products. Our revenues during the 2004 fiscal year
increased significantly compared to the same period during 2003; however, almost
all of the increase is attributable to the Source Code Licensing Agreement. All
of the payments due to us under this agreement were paid at the time of the


                                       8
<PAGE>

contract and, at this time, we do not anticipate any further payments. We have
recorded a portion of the fees received as revenue each month for the 12 months
from January 21, 2004 to January 20, 2005 relating to the support fees earned in
connection with this agreement. Management is seeking to enter into other
license agreements for our technology during the next 12 months; however, there
are no assurances that we will be successful in entering into any such
agreements.

         During fiscal 2004, our expenses increased over the prior year as we
invested in a variety of television, print and online marketing initiatives and
attended four major industry exhibitions in the United States and the United
Kingdom - all of which contributed to an increase in marketing expenses compared
to the prior year. In addition, we increased expenditures for research and
development in that period - all of which resulted in the announcement and
shipment of Winc Manager 2.0, AirPatrol Mobile, AirPatrol Enterprise, AirPatrol
Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0. We also undertook initiatives to
expand our distribution, which resulted in the conclusion of agreements with
hardware vendor Netgear as well as leading online mobile computer software
vendors Handango and Pocketgear to carry our products. We also expanded our
range of international distribution agreements during this period.

         Our net loss for the year ended December 31, 2004 was $1,437,439
compared to a net loss of $1,063,962 for the year ended December 31, 2003. The
increase in the net loss is primarily a result of the 120% increase in expenses
compared to the year ended December 31, 2003. During the 2004 fiscal year, the
most dramatic increases in expenses were in the areas of advertising and
promotion (218%), consulting fees (239%), office and administrative (226%),
professional fees (104%), and salaries and benefits (141%). Advertising and
promotion and travel expenses have increased as our products have reached the
sales portion of the sales cycle. Professional fees for fiscal 2004 were
$203,775 compared to $100,071 during 2003 due to costs incurred in 2004 as a
result of being a public company, compared to 2003 when CNI was privately held,
and includes legal fees, accounting fees and costs associated with corporate
communications. Salaries and benefits for fiscal 2004 were $238,598 compared to
$98,894 for 2003 as a result of our having two more employees in 2004 than in
2003, and the result of the accrual of a termination settlement payment for a
terminated employee in the amount of $45,000, which was paid in January 2005.
During fiscal 2004, consulting fees increased by from $255,945 to $868,883. The
increase in consulting fees is due to increased fees paid for online marketing
initiatives, corporate finance initiatives and the expensing of the fair value
of shares issued in exchange for services totaling approximately $229,976. Also
contributing was the fact that we retained on-going marketing and public
relations services in 2004, which we did not need in the same period in 2003,
when our products were at an earlier stage of development. Travel has also
increased as sales and marketing personnel attended more trade shows in 2004
compared to 2003. Research and development is also higher in 2004 as a result of
$100,000 of purchased research and development.

         Dividends of $2,466 were accrued to December 31, 2004 related to
redeemable, convertible preferred stock issued on December 22, 2004. No cash
dividends were declared during the year ended December 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2004, we had cash of $1,308,086 and a working
capital surplus of $497,618 due to the completion of a private placement of
redeemable, convertible preferred stock and warrants in late December 2004,
resulting in net proceeds of $1,815,000. In addition, we sold shares of our
common stock during 2004, which resulted in net proceeds of $323,500 and
received share subscription proceeds of $400,000. The $2,403,499 of cash
provided by our financing activities offset the $1,155,226 of cash used in
operations and $26,253 used in investing activities.

         Receivables of $14,883 at December 31, 2004 consisted of sales made on
Esellerate and Handango websites in December 2004 and paid to us in January
2005, as well as refundable taxes from the Canadian government. The entire
amounts receivable at December 31, 2004 of $14,883 was collected in the first
quarter of 2005. The amounts receivable at December 31, 2003 of $19,679 was
collected in the first quarter of 2004.

         Prepaid expenses consisted of prepaid rent.


                                       9
<PAGE>

         Property plant and equipment consisted of hardware equipment purchased
from independent suppliers in North America for the development of our products.

         Consulting fees payable consisted of payables owed to two of our
officers, Nicholas Miller and Mitchell Burton.

         Deferred revenue at December 31, 2004 included support revenue in
connection with the Source Code Licensing Agreement, which was recognized each
month for the 12 months from January 21, 2004 to January 20, 2005.

         Accounts payable increased from December 31, 2003 to December 31, 2004
as a result of the increased level of operating expenses and liabilities
relating to accrued severance pay of $45,000 for a terminated employee.

         In April 2004, we received $2,000,000 in funds from a private investor
in connection with a private placement offering pursuant to an irrevocable
subscription agreement. During the quarter ended June 30, 2004, the investor
requested that his investment be rescinded and, without waiving any of our
rights we may have against the investor under the subscription agreement, we
returned $1,500,000 to the investor of the $2,000,000 received. In connection
with the private placement, we paid a $100,000 finder's fee. During the quarter
ended June 30, 2004, we recovered the finder's fee, which we returned to the
investor as well. It is our intent to return the $400,000 balance of the
investment only when the investor enters into a mutual settlement agreement
acceptable to us. Even though we have offered to return the remaining $400,000
to the investor if the investor executes a mutual settlement agreement, the
investor has refused to execute the settlement agreement. We have informed the
investor that if he continues to refuse to execute the settlement agreement, we
will enforce the terms of the subscription agreement relating to the remaining
$400,000 and issue shares of our common stock and common stock purchase warrants
in accordance with the terms of the subscription agreement. The investor has
indicated that he may initiate an action to recover the remaining $400,000.
Although we have returned $1,600,000 of the $2,000,000 invested, we have not
admitted to any facts or circumstances that would support a legal right to
rescind the investment and we intend to vigorously defend any legal action on
that basis. The $400,000 is reflected as share subscriptions payable at December
31, 2004.

         During June 2004, we began a private placement offering of 2,000,000
shares of common stock at a price of $0.50 per share for an aggregate of
$1,000,000. We concluded the offering in September 2004, selling a total of
700,000 shares for net cash proceeds of $323,500.

         In December 2004, we entered into securities purchase agreements with
several accredited investors pursuant to which we agreed to sell, and the
investors agreed to purchase, 2,000 shares of Series B 5% Redeemable Convertible
Preferred Stock, warrants to purchase 2,325,584 shares of common stock, and
Additional Investment Rights for a total of $2,000,000. The warrants are
exercisable for five years at $0.55 per share. The preferred stock may be
converted in shares of common stock at a price of $0.43 per share. The
Additional Investment Rights entitle the investors to buy up to $4,000,000 of
preferred stock and warrants on the same terms for period of six months
following the effective date of the registration statement we agreed to file, of
which this prospectus is a part. We disclosed, as a subsequent event, the
receipt of common share subscriptions totaling $250,000 in our September 30,
2004 consolidated interim financial statements. The subscriber agreed to apply
its $250,000 investment to purchase 250 shares of preferred stock in connection
with this financing.

         In connection with the subscription, we paid Ascendiant Securities, LLC
a cash commission of $160,000 and a non-accountable expense allowance of
$25,000, and issued Ascendiant warrants for the purchase of up to 1,674,419
shares of common stock at $0.55 per share. The warrants are exercisable for a
five-year period commencing from the date on which the right to exercise the
warrants vested. The warrants are currently vested as to 372,093 shares. Further
vesting will occur as warrants and the Additional Investment Right securities
are exercised. The warrants contain piggyback registration rights and a net
exercise provision.

PLAN OF OPERATION

         We believe we do not have sufficient funds to cover our operating
overhead for the next twelve months. While we had approximately $1,300,000 of
cash at December 31, 2004, our projected "burn rate" for the current


                                       10
<PAGE>

fiscal year is approximately $150,000 per month. This cash flow rate is
representative of the capital requirements over the twelve-month period from the
date of the prospectus, based on our current growth plan. Our plans for the
current fiscal year include doubling the size of research and development
expenditures from $576,894 in 2004 to approximately $1.2 million in 2005 and
increasing amounts spent on marketing and sales from $220,715 in 2004 to
approximately $5.4 million. We anticipate that, if sufficiently funded over the
next twelve months, our focus will be: marketing our products, supporting
customers, and conducting on-going research and development.

         We intend to continue our product research and development activities
to further enhance our existing product line and to create new products focused
on the same markets. We have budgeted approximately $1.2 million for research
and development costs during fiscal 2005. Our spending on research and
development is contingent upon us receiving sufficient funding to support such
expenditures. We do not plan to purchase or sell any significant plant or
equipment in 2005. We expect to increase the number of employees by
approximately 10 to 20 individuals in the areas of engineering, marketing,
sales, and customer support during fiscal 2005, provided we have sufficient
funding to support the hiring of additional employees.

         Accordingly, we estimate that we will need cash from one or more
external sources of approximately $700,000 to $800,000 over the next twelve
months. While we issued Additional Investment Rights as part of our December
2004 private placement that could potentially result in gross proceeds of
$4,000,000 if fully exercised, we cannot assure you that any of the rights will
be exercised. Therefore, we intend to conduct additional financings to raise
funds from private investors. However, there are no assurances that we will be
able to complete any such financings.

         If we are successful in implementing our growth strategy, management
believes that we can undergo a period of rapid growth. For our AirPatrol
technology, we will actively search for more partners for the provision of
software licenses and related software consultancy and engineering services in
relation to its further development. Management expects AirPatrol Mobile,
AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0
to ship in greater numbers in 2005, and thus will require further software
developments and upgrades for the remainder of the year. We also intend to enter
into other license agreements for our technology, similar to the source code
licensing agreement described above, during the next 12 months; however, there
are no assurances that we will be successful in entering into any such
agreements.

OFF BALANCE SHEET ARRANGEMENTS

         We do not have any material off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

FORWARD-LOOKING STATEMENTS

         Certain statements in this Annual Report on Form 10-KSB, as well as
statements made by us in periodic press releases, oral statements made by our
officials to analysts and shareholders in the course of presentations about us,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by the
forward looking statements. There are many factors that could cause these
forward-looking statements to be incorrect including, but not limited to, the
following:

         o   our ability to generate desired technologies;
         o   the lack of liquidity of our common stock;
         o   the risks associated with technology companies;
         o   our ability to find and retain skilled personnel;
         o   availability of capital;
         o   the strength and financial resources of our competitors; and
         o   general economic conditions.



                                       11
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS.

         See pages beginning with page F-1.


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

         Effective December 1, 2003, our board of directors dismissed our
independent auditor, Parker & Co. ("Parker"). The dismissal of Parker was
unrelated to Parker's performance. The dismissal, which was approved by our
board of directors, was related to the acquisition of CNI and the appointment of
CNI's independent auditor, KPMG, LLP, as our independent auditor.

         Parker's report on our financial statements for either of the past two
years did not contain an adverse opinion or disclaimer of opinion, and was not
modified as to uncertainty, audit scope or accounting principles. During our two
most recent fiscal years and the subsequent interim period ending December 1,
2003, there were no disagreements between us and Parker on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of Parker, would
have caused that firm to make reference to the subject matter of the
disagreement in connection with its audit report. During our two most recent
fiscal years and the subsequent interim period ending December 1, 2003, Parker
did not advise us of any of the items listed any Item 304(a)(1)(iv)(B) of
Regulation S-B.

         We requested Parker to furnish us a letter addressed to the Commission
stating whether it agreed with the above statements. A copy of that letter,
dated December 3, 2003, was filed as Exhibit 16.1 to our Form 8-K filed December
5, 2003.

         On December 1, 2003, our board of directors approved the engagement of
KPMG, LLP to audit the financial statements for the fiscal year ended December
31, 2003. During the two most recent fiscal years and the subsequent interim
period through December 1, 2003, neither we nor anyone on our behalf consulted
KPMG, LLP regarding the application of accounting principles to a specific
completed or contemplated transaction, or the type of audit opinion that might
be rendered on our financial statements.


ITEM 8A. CONTROLS AND PROCEDURES.

         As required by SEC rules, we have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures at the end of the
period covered by this report. This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer. Based on this
evaluation, these officers have concluded that the design and operation of our
disclosure controls and procedures are effective. There were no changes in our
internal control over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

         Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by us in the reports that we file under the Exchange Act is
accumulated and communicated to our management, including principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.


FORM 8B. OTHER INFORMATION.

         None.

                                       12
<PAGE>


                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

        Our executive officers and directors are:

        NAME                      AGE     POSITION
        Nicholas R. Miller         53     CEO, President, and Director
        David Redekop              33     Chief Financial Officer and Treasurer
        Mitchell G. Burton         41     Chief Technology Officer
        Isaac Moss                 52     Secretary
        Tate Holt                  53     Director
        Blain Archer               55     Director

         Our shareholders elect our directors annually and our board of
directors appoints our officers annually. Vacancies in our board are filled by
the board itself. Set forth below are brief descriptions of the recent
employment and business experience of our executive officers and directors.

         NICHOLAS MILLER, CEO, PRESIDENT, AND DIRECTOR. Nicholas Miller has held
his positions with us since November 25, 2003. Immediately prior to his
appointment, he was the founder, officer, director, CEO and chairman of Cirond
Networks, Inc. (a private company based in Campbell, California), Cirond
Technologies Inc. (from June 30, 2002 to present and n/k/a Seaside Holdings
Inc.) and Cirond Networks Canada Inc. (a wholly owned subsidiary of Cirond
Networks, Inc. based in British Columbia, Canada) - Cirond Networks Canada Inc.
and Cirond Networks, Inc. were founded in March 2001. Between 1999 and March
2001, Mr. Miller was president of Arundel Holdings, a private Canadian
investment company. During that period, he also served as a director of Ezenet
Corp. (a public company traded on the TSX) until it was acquired by Cognicase
Inc. in August 2001. In addition, Mr. Miller was a director of Workfire.com (a
privately-held Nevada company, acquired by Packeteer Inc. in July 2000 - at
which time he ceased to be a director). Mr. Miller was also vice-chairman and a
director of Mulgrave Independent School Society in West Vancouver, British
Columbia on a voluntary basis from 1999 through 2002.

         DAVID REDEKOP, CHIEF FINANCIAL OFFICER AND TREASURER. David Redekop has
been Chief Financial Officer of Cirond Corporation since January 1, 2004.
Immediately prior to joining Cirond Corporation, Mr. Redekop was a self-employed
consultant - a position he held from September 2001 to January 2004. In July of
2001, he was appointed a director of Hawkair Aviation Services Ltd. based in
Terrace, British Columbia - a privately-held Canadian company to which he was
also appointed Chief Financial Officer in July 2003. From April 2001 to
September 2001, he served as controller for TCENet, a public Canadian company
based in Calgary, Alberta, that was traded on the TSX Venture Exchange (or CDNX,
as it was known during that period). From October 2000 to March 2001, Mr.
Redekop served as Chief Financial Officer at Boltons Capital Corporation, a
public Canadian company based in Kelowna, British Columbia, and traded on the
TSX Venture Exchange. From April 1998 until September 2000, Mr. Redekop served
as controller for Workfire Technologies Corporation, a private company based in
Kelowna, British Columbia. In addition, since January 2004, Mr. Redekop has
served as controller of Crossflux - a privately-held Canadian company based in
Kelowna, British Columbia, and its subsidiary Itiva Development Corporation. Mr.
Redekop has been working on a full-time basis for us since January 2005.

         MITCHELL G. BURTON, CHIEF TECHNOLOGY OFFICER. Mitchell Burton has been
Chief Technology Officer of Cirond Corporation since January 15, 2004.
Immediately prior to joining Cirond Corporation, he was Chief Technology Officer
of Cirond Networks Inc. (a private company based in Campbell, California), a
position he assumed in November 2001. Prior to this, he was founder and CEO of
Headline Technologies Inc., a private British Columbia, Canada-based company
founded in 1993 that provided engineering design services involving analog,
digital, DSP and software design. In 2000, he also became Director of
Engineering for Sentry Telecom - a private British Columbia, Canada-based
company until January of 2001. He joined Cirond Networks Inc. in November 2001.
He is still CEO and a director of Headline Technologies Inc. Mr. Burton devotes
all of his working time to Cirond, but is paid through his company, Headline
Technologies, for personal tax reasons.


                                       13
<PAGE>

         ISAAC MOSS, SECRETARY. Isaac Moss has been the Secretary of Cirond
Corporation since September 25, 2004. He is a graduate of the University of Cape
Town with a bachelors degree in Social Science and a masters degree in Public
Administration. Since 1987, Mr. Moss has served as a consultant providing
strategic business advisory services to emerging growth companies in diverse
fields in the chemical, resource, hospitality, entertainment, forest products,
environmental, agro-industrial, telecommunications, and bio-technology sectors.
He has been semi-retired since 2000. Since 1992, Mr. Moss has been a director of
Resource Finance & Investment Ltd., a Bermuda company, which files reports with
the Securities and Exchange Commission and whose common stock is quoted on the
OTC Bulletin Board.

         TATE HOLT, DIRECTOR. Tate Holt has been a director of Cirond
Corporation since September 23, 2004. Mr. Holt is the president of Holt &
Associates of Larkspur, California, a company which he founded in 1990 that
provides growth management and turnaround consulting to assist mid-market
companies in maximizing their profits. He is the author of the book
"Prescriptions for Growth, growth management for mid-market businesses." From
May 1974 to December 1989, Mr. Holt served in various senior sales and marketing
positions, which included senior vice president for ADP (October 1986 to
December 1989), national sales manager for Triad Systems Corporation (May 1976
to October 1986), and marketing representative for IBM (May 1974 to May 1976).
Since May 1994, Mr. Holt has been a director of Onsite Energy Corporation,
Carlsbad, California. He was also a director of AremisSoft Corporation,
Minneapolis, Minnesota, from April 1999 to July 2003. From December 2000 to
approximately August 2002, he served as the chief executive officer of dvGarage,
a development stage digital media company. Prior to joining dvGarage, from June
1999 through November 2000, Mr. Holt served as the president and chief executive
officer of NewStar Ltd., a development stage company formed as a subsidiary of
DBS Industries Inc., seeking to market meter reading services via satellite.

         BLAIN ARCHER, DIRECTOR. Blain Archer has been a director of Cirond
Corporation since September 23, 2004. He has been a chartered accountant and
founding partner of the accounting firm of Johnsen Archer of Vancouver, British
Columbia, since September 1983. Johnsen Archer primarily addresses the
accounting requirements of Canadian companies and Mr. Archer specializes in
providing strategic advice to high-growth entrepreneurial organizations. Johnsen
Archer is affiliated with JHI (Jeffries Henry International). Prior to
establishing his own firm, Mr. Archer was involved with the tax group of what
was then KPMG Peat Marwick from September 1980 to August 1983.

CONFLICTS OF INTEREST

         Members of our management are associated with other firms involved in a
range of business activities. Consequently, there are potential inherent
conflicts of interest in their acting as officers and directors of our company.
While the officers and directors are engaged in other business activities, we
anticipate that such activities will not interfere in any significant fashion
with the affairs of our business, in terms of having adequate time to devote to
the business of the company.

         Our officers and directors are now and may in the future become
shareholders, officers or directors of other companies, which may be formed for
the purpose of engaging in business activities similar to us. Accordingly,
additional direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of us or other entities. Moreover, additional
conflicts of interest may arise with respect to opportunities which come to the
attention of such individuals in the performance of their duties or otherwise.
Currently, we do not have a right of first refusal pertaining to opportunities
that come to their attention and may relate to our business operations.

         Our officers and directors are, so long as they are our officers or
directors, subject to the restriction that all opportunities contemplated by our
plan of operation which come to their attention, either in the performance of
their duties or in any other manner, will be considered opportunities of, and be
made available to us and the companies that they are affiliated with on an equal
basis. A breach of this requirement will be a breach of the fiduciary duties of
the officer or director. If we or the companies with which the officers and
directors are affiliated both desire to take advantage of an opportunity, then
said officers and directors would abstain from negotiating and voting upon the
opportunity. However, all directors may still individually take advantage of
opportunities if we should decline to do so. Except as set forth above, we have
not adopted any other conflict of interest policy with respect to such
transactions.


                                       14
<PAGE>

CODE OF ETHICS

         We have adopted a code of ethics that applies to our principal
executive officers, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of the code is filed
as an exhibit to this report.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires our
officers, directors, and persons who beneficially own more than 10% of our
common stock to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than 10% beneficial owners are also required by rules
promulgated by the SEC to furnish us with copies of all Section 16(a) forms they
file.

         Based solely upon a review of the copies of such forms furnished to us,
or written representations that no Form 5 filings were required, we believe that
during the fiscal year ended December 31, 2004, there was compliance with all
Section 16(a) filing requirements applicable to our current officers, directors
and greater than 10% beneficial owners. No beneficial ownership reports were
filed by the former officers, directors or greater than 10% beneficial owners.


ITEM 10. EXECUTIVE COMPENSATION.

         The following table sets forth information the remuneration of our
chief executive officers and our four most highly compensated executive officers
who earned in excess of $100,000 per annum during any part of our last three
fiscal years:

<TABLE>
                           SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                          LONG TERM COMPENSATION
                                ANNUAL COMPENSATION                --------------------------------------

                                                                            AWARDS             PAYOUTS
                  ---------------------------------------------------------------------------------------
                                                         OTHER      RESTRICTED   SECURITIES
   NAME AND                                             ANNUAL        STOCK      UNDERLYING      LTIP      ALL OTHER
   PRINCIPAL       FISCAL                              COMPENSA-     AWARD(S)     OPTIONS/      PAYOUTS    COMPENSA-
   POSITION         YEAR    SALARY ($)    BONUS ($)     TION($)        ($)        SARS (#)        ($)       TION($)
---------------------------------------------------------------------------------------------------------------------
<S>                 <C>      <C>             <C>          <C>          <C>          <C>          <C>          <C>
Nicholas Miller,    2004     $180,000        -0-          -0-          -0-          ___          -0-          -0-
CEO(1)<F1> (2)<F2>  2003     $120,000        -0-          -0-          -0-          -0-          -0-          -0-
---------------------------------------------------------------------------------------------------------------------
Mitchell Burton,    2004     $120,000        -0-          -0-          -0-          ___          -0-          -0-
Chief Technol-      2003     $120,000        -0-          -0-          -0-          -0-          -0-          -0-
ogy Officer
 (2)<F2>(3)<F3>
---------------------------------------------------------------------------------------------------------------------
 M. Kevin Ryan,     2003        -0-          -0-          -0-          -0-          -0-          -0-          -0-
President (4)<F4>   2002        -0-          -0-          -0-          -0-          -0-          -0-          -0-
---------------------------------------------------------------------------------------------------------------------
-------------
<FN>
(1)<F1>  Mr. Miller became our CEO in November 2003.
(2)<F2>  Amounts incurred as consulting fees pursuant to our contracts with
         Amber Tiger Holding Corp. and Headline Technologies Ltd. are listed as
         salary.
(3)<F3>  Mr. Burton has been CNI's Chief Technology Officer since November 2001.
(4)<F4>  Mr. Ryan was President from our inception in 2000 to November 2003.
</FN>
</TABLE>

         For fiscal 2005, we pay Nicholas Miller, through Amber Tiger Holding
Corp., $15,000 per month and Mitchell Burton, through Headline Technologies
Ltd., $10,000 per month.

COMPENSATION OF DIRECTORS

         Nicholas Miller is not compensated separately for his service as a
director. Beginning in January 2005, we began paying each of our non-officer
directors $1,500 for their attendance at board of director meetings and $1,000
for their attendance at committee meetings.


                                       15
<PAGE>


STOCK OPTION PLANS

         By written consent dated September 20, 2004, our Board of Directors
adopted the 2004 Stock Option Plan. The Board of Directors approved an amendment
to the 2004 Stock Option Plan, as of January 26, 2005, to increase the number of
shares available under the Plan to 6,710,000 shares of our common stock (the
"Available Shares") that may be purchased pursuant to the exercise of stock
options ("Options") which may be granted to our employees, officers, directors
and consultants. The 2004 Stock Option Plan also provides for quarterly
adjustments in the number of Available Shares, to a number equal to 15% of the
number of shares outstanding as of the end of the preceding fiscal quarter or
6,710,000 shares, whichever is greater. Our shareholders must still approve this
amendment. If our shareholders do not approve the 2004 Stock Option Plan as
amended by September 20, 2005, any options granted under the 2004 Stock Option
Plan will be rescinded and void.

         The 2004 Stock Option Plan is designed to (i) induce qualified persons
to become employees, officers, consultants, or directors of our company; (ii)
reward such persons for past services to our company; (iii) encourage such
persons to remain in the employ of our company or associated with our company;
and (iv) provide additional incentive for such persons to put forth maximum
efforts for the success of our business.

         The 2004 Stock Option Plan will be administered by the Board of
Directors (the "Board"). Transactions under the 2004 Stock Option Plan are
intended to comply with all applicable conditions of Rule 16b-3 under the 1934
Act. In addition to determining who will be granted Options, the Board has the
authority and discretion to determine when Options will be granted and the
number of Options to be granted. The Board may determine which Options may be
intended to qualify ("Incentive Stock Option") for special treatment under the
Internal Revenue Code of 1986, as amended from time to time (the "Code"), or
Non-Qualified Options ("Non-Qualified Stock Options") which are not intended to
so qualify. The Board also may determine the time or times when each Option
becomes exercisable, the duration of the exercise period for Options and the
form or forms of the instruments evidencing Options granted under the 2004 Stock
Option Plan. The Board may adopt, amend, and rescind such rules and regulations
as in its opinion may be advisable for the administration of the 2004 Stock
Option Plan. The Board may amend the 2004 Stock Option Plan without shareholder
approval where such approval is not required to satisfy any statutory or
regulatory requirements; provided, however, that the Board may not materially
increase the number of Available Shares (except for allowed quarterly
adjustments and as a result of stock dividends, recapitalizations, stock splits
or combinations), materially increase the benefits accruing to participants
under the Plan or materially modify the eligibility requirements for the
participants.

         Grants can be either Non-Qualified Stock Options or Incentive Stock
Options, to the extent that they do not exceed the Incentive Stock Option
exercise limitations, and the portion of an option that exceeds the dollar
limitations of Code Section 422 will be treated as a Non-Qualified Stock Option.

         The Board also may construe the 2004 Stock Option Plan and the
provisions in the instruments evidencing options granted under the 2004 Stock
Option Plan to employee and officer participants and is empowered to make all
other determinations deemed necessary or advisable for the administration of the
2004 Stock Option Plan. The Board may not adversely affect the rights of any
participant under any unexercised option or any potion thereof without the
consent of such participant. This Plan will remain in effect until it is
terminated by the Board, except that no Incentive Stock Option will be granted
after September 20, 2014.

         The 2004 Stock Option Plan contains provisions for proportionate
adjustment of the number of shares for outstanding options and the option price
per share in the event of stock dividends, recapitalizations, stock splits or
combinations.

         Participants in the 2004 Stock Option Plan may be selected by the Board
from directors, employees and officers of our company and its subsidiaries and
consultants to our company and its subsidiaries. In determining the persons to
whom options will be granted and the number of shares to be covered by each
option, the Board will take into account the duties of the respective persons,
their present and potential contributions to our success, and such other factors
as the Board deems relevant to accomplish the purposes of the 2004 Stock Option
Plan.

         Only employees of our company and its subsidiaries, as the term
"employee" is defined for the purposes of the Code, will be entitled to receive
Incentive Stock Options. Incentive Stock Options granted under the 2004 Stock


                                       16
<PAGE>


Option Plan are intended to satisfy all requirements for incentive stock options
under Section 422 of the Code and the Treasury Regulations thereunder.

         Each option granted under the 2004 Stock Option Plan will be evidenced
by a written option agreement between us and the optionee. The option price of
any Incentive Stock Option may be not less than 100% of the Fair Market Value
per share on the date of grant of the option; provided, however, that any
Incentive Stock Option granted under the 2004 Stock Option Plan to a person
owning more than ten percent of the total combined voting power of the common
stock will have an option price of not less than 110% of the Fair Market Value
per share on the date of grant of the Incentive Stock Option. Each Non-Qualified
Stock Option granted under the 2004 Stock Option Plan will be at a price no less
than 85% of the Fair Market Value per share on the date of grant thereof. "Fair
Market Value" per share as of a particular date is defined in the 2004 Stock
Option Plan as the closing price of our common stock as reported on a national
securities exchange or the last transaction price on the NASDAQ System or, if
none, the average of the closing bid and asked prices of our common stock as
reported by NASDAQ or, if such quotations are unavailable, the value determined
by the Board in its discretion in good faith.

         The exercise period of Incentive Stock Options granted under the 2004
Stock Option Plan may not exceed ten years from the date of grant thereof.
Incentive Stock Options granted to a person owning more than ten percent of the
total combined voting power of our common stock will be for no more than five
years. The Board will have the authority to modify, extend or renew any
outstanding option at such time and under such circumstances as it, in its sole
discretion, deems appropriate.

         To exercise an option, the optionee must pay the full exercise price in
cash, by check or such other legal consideration as may be approved by the
Board. Such other consideration may consist of shares of common stock having a
Fair Market Value equal to the option price or in property or in a combination
of cash, shares, and property, subject to approval of the Board. The Board has
the sole and absolute discretion to determine whether or not property other than
cash or common stock may be used to purchase the shares of common stock
thereunder and, if so, to determine the value of the property received.

         An option may not be exercised unless the optionee then is an employee,
consultant, officer, or director of our company or its subsidiaries, and unless
the optionee has remained continuously as an employee, consultant, officer, or
director of our company since the date of grant of the option. If the optionee
ceases to be an employee, consultant, officer, or director of our company or its
subsidiaries other than by reason of death, disability, or for cause, all
options granted to such optionee, fully vested to such optionee but not yet
exercised, will terminate 90 days after the date the optionee ceases to be an
employee, consultant, officer or director of our company.

         If the employee is terminated "for cause" (as that term is defined in
the 2004 Stock Option Plan), such employee's options will terminate immediately
on the date the optionee ceases employment or association.

         If an optionee dies while an employee, consultant, officer or director
of our company, or if the optionee's employment, consultant, officer, or
director status terminates by reason of disability, all options theretofore
granted to such optionee, whether or not otherwise exercisable, unless earlier
terminated in accordance with their terms, may be exercised at any time within
twelve months after the date of death or disability of said optionee, by the
optionee or by the optionee's estate or by a person who acquired the right to
exercise such options by bequest or inheritance or otherwise by reason of the
death or disability of the optionee.

         Options granted under the 2004 Stock Option Plan are not transferable
other than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or the rules
thereunder. Options may be exercised, during the lifetime of the optionee, only
by the optionee and thereafter only by his legal representative. An optionee has
no rights as a shareholder with respect to any shares covered by an option until
the option has been exercised.

         As a condition to the issuance of shares upon the exercise of an
option, we will require the optionee to pay to us the amount of our tax
withholding liability required in connection with such exercise. We, to the
extent permitted or required by law, may deduct a sufficient number of shares
due to the optionee upon exercise of the option to allow us to pay such
withholding taxes. We are not obligated to advise any optionee of the existence
of any tax or the amount which we will be so required to withhold.


                                       17
<PAGE>


         Unless otherwise specified in an optionee's agreement, options granted
under the 2004 Stock Option Plan will become vested with the optionee over a
two-year period, with one-sixth of the options vesting every four months, in
addition to any other vesting requirements determined by the Board at the time
of grant.

         As of December 31, 2004, no stock options were outstanding.


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

         The following table provides certain information as to our officers and
directors individually and as a group, and the holders of more than 5% of our
common stock, as of March 11, 2005.


<TABLE>
<CAPTION>
                                                              AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1)<F1>                  BENEFICIAL OWNERSHIP (2)<F2>     PERCENT OF CLASS (2)<F2>
<S>                                                                  <C>                             <C>

Nicholas Miller (3)<F3>                                              7,397,018                       19.9%
4185 Still Creek Drive, #B-101
Burnaby, British Columbia, Canada V5C 6G9

Kevin O'Neill                                                        2,762,366                        7.4%
2985 Rosebery Avenue
West Vancouver, British Columbia, Canada V7V 3A8

Mark Moldenhauer                                                     2,382,833                        6.4%
8100 Navidad Drive
Austin, Texas 78735

Mitchell G. Burton                                                      -0-                            -
4185 Still Creek Drive, #B-101
Burnaby, British Columbia, Canada V5C 6G9

David Redekop                                                           -0-                            -
1632 Dickson Avenue #510
Kelowna, British Columbia V1Y 7T2

Isaac Moss                                                              -0-                            -
4185 Still Creek Drive, #B-101
Burnaby, British Columbia, Canada V5C 6G9

Tate Holt                                                               -0-                            -
P.O. Box 1058
Larkspur, California 94977

Blain Archer                                                            -0-                            -
3915 West 36th Avenue
Vancouver, British Columbia, Canada V6N 2S7

All officers and directors as a group  (6 persons)                 7,397,018 (3)<F3>                 19.9%

---------------
<FN>
(1)<F1>  To our knowledge, except as set forth in the footnotes to this table
         and subject to applicable community property laws, each person named in
         the table has sole voting and investment power with respect to the
         shares set forth opposite such person's name.

(2)<F2>  This table is based on 37,110,000 shares of Common Stock outstanding as
         of March 11, 2005. If a person listed on this table has the right to
         obtain additional shares of Common Stock within sixty (60) days from
         March 11,


                                       18
<PAGE>

         2005, the additional shares are deemed to be outstanding for the
         purpose of computing the percentage of class owned by such person, but
         are not deemed to be outstanding for the purpose of computing the
         percentage of any other person. The table does not include shares
         issuable upon the exercise of stock options. Stock options were granted
         in January 2005, subject to shareholder approval of any amendment to
         increase the Available Shares under the 2004 Stock Option Plan. This
         approval has not yet been obtained.

(3)<F3>  Excludes ownership through the shares of preferred stock and warrants
         held by Seaside Holdings Inc.

</FN>
</TABLE>

     Nicolas Miller may be deemed to be the "parent" of our company within the
meaning of the rules and regulations of the Securities and Exchange Commission.

CHANGES IN CONTROL

         There are no agreements known to management that may result in a change
of control of our company.

EQUITY COMPENSATION PLANS

         As of December 31, 2004, our equity compensation plans were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                NUMBER OF SECURITIES TO BE    WEIGHTED AVERAGE EXERCISE
                                  ISSUED UPON EXERCISE OF       PRICE OF OUTSTANDING         NUMBER OF SECURITIES
                                   OUTSTANDING OPTIONS,         OPTIONS, WARRANTS AND       REMAINING AVAILABLE FOR
        PLAN CATEGORY               WARRANTS AND RIGHTS                RIGHTS                   FUTURE ISSUANCE
-------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                           <C>                     <C>
Equity compensation plans                  None                          N/A                         None
approved by security holders
-------------------------------------------------------------------------------------------------------------------
Equity compensation plans not              None                          N/A                     5,281,500 (1)<F1>
approved by security holders
(1)<F1>
-------------------------------------------------------------------------------------------------------------------
Total                                      None                                                  5,281,500 (1)<F1>
-------------------------------------------------------------------------------------------------------------------
---------------
<FN>
(1)<F1>  The Board of Directors approved an amendment to the 2004 Stock Option
         Plan, as of January 26, 2005, to increase the number of shares
         available under the Plan from 5,281,500 to 6,710,000 shares of our
         common stock (the "Available Shares") that may be purchased pursuant to
         the exercise of stock options ("Options") which may be granted to our
         employees, officers, directors and consultants. The 2004 Stock Option
         Plan also provides for quarterly adjustments in the number of Available
         Shares, to a number equal to 15% of the number of shares outstanding as
         of the end of the preceding fiscal quarter or 6,710,000 shares,
         whichever is greater. Our shareholders must still approve the Plan as
         amended.
</FN>
</TABLE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Other than as disclosed below, none of our present directors, officers
or principal shareholders, nor any family member of the foregoing, nor, to the
best of our information and belief, any of our former directors, senior officers
or principal shareholders, nor any family member of such former directors,
officers or principal shareholders, has or had any material interest, direct or
indirect, in any transaction, or in any proposed transaction which has
materially affected or will materially affect us.

         NICHOLAS MILLER. We, through CNI, have entered into a Management
Advisory Services Agreement with Amber Tiger Holdings Corp., a company owned and
controlled by Nicholas Miller, the president and sole director of CNI, and an
officer, director and principal, beneficial shareholder of Cirond Corporation.
The agreement provides for the provision of all business management and
executive services to us by Nicholas Miller in connection with his role as our
president and CEO. The agreement is for a term of one year and automatically
renews annually unless terminated by us or Amber Tiger. At the time CNI entered
into the agreement with Amber Tiger, Nicholas


                                       19
<PAGE>

Miller was the sole director.  Accordingly, it was not a negotiated contract.
For the year ended December 31, 2003, compensation under that agreement was
$10,000 per month. It was increased to $15,000 per month for 2004. For the year
ended December 31, 2003, we incurred consulting fees to Amber Tiger in the
amount of $120,000 and $40,000 was recorded as a payable at December 31, 2003
(of which $10,000 related to 2002). For the year ended December 31, 2004, we
incurred consulting fees to Amber Tiger in the amount of $180,000 and $40,000
was recorded as a payable at December 31, 2004.

         MITCHELL BURTON. We, through CNI, have entered into a Management
Advisory Services Agreement with Headline Technologies Ltd., a company owned and
controlled by Mitchell Burton, the chief technology officer of CNI and chief
technology officer of Cirond Corporation. The agreement provides for the
provision of all business management and executive services to us by Mitchell
Burton in connection with his role as our chief technology officer. The
agreement is for a term of one year and automatically renews annually unless
terminated by us or Headline Technologies. At the time CNI entered into the
agreement with Amber Tiger, Nicholas Miller was the sole director. For the year
ended December 31, 2003, we incurred consulting fees to Headline Technologies in
the amount of $120,000 and $80,000 was recorded as a payable at December 31,
2003 (of which $55,000 related to 2002). For the year ended December 31, 2004,
we incurred consulting fees to Headline Technologies in the amount of $120,000
and $70,000 was recorded as a payable at December 31, 2004.

         SEASIDE HOLDINGS INC. As of the December 31, 2004 and 2003, we were
indebted to Seaside Holdings Inc., a company in which Mr. Miller serves as an
officer and director, in the amounts of $111,575 and $171,576, respectively.
Seaside Holdings Inc. was the former parent company of CNI. The debt relates to
inter-company obligations from CNI to Seaside Holdings Inc. which were incurred
prior to our acquisition of CNI. The debt is unsecured, non-interest bearing and
has not fixed terms of repayment.

         PROMOTERS. M. Kevin Ryan and Robert Gardner may be deemed to be
"promoters" of our company within the meaning of the rules and regulations of
the Securities and Exchange Commission, as they took the initiative in founding
and organizing the business of the company, which was formerly eXmailit.com.

         FUTURE TRANSACTIONS. All future affiliated transactions will be made or
entered into on terms that are no less favorable to us than those that can be
obtained from any unaffiliated third party. A majority of the independent,
disinterested members of our board of directors will approve future affiliated
transactions.

         We believe that of the transactions described above have been on terms
as favorable to us as could have been obtained from unaffiliated third parties
as a result of arm's length negotiations.


ITEM 13. EXHIBITS.

--------------------------------------------------------------------------------
 REGULATION
 S-B NUMBER                            EXHIBIT
--------------------------------------------------------------------------------
    2.1        Stock Exchange Agreement by and between Cirond Corporation (f/k/a
               eXmailit.com) and Seaside Holdings Inc. (f/k/a Cirond
               Technologies Inc.) dated August 29, 2003 (1)
--------------------------------------------------------------------------------
    2.2        First Amendment to Stock Exchange Agreement by and between Cirond
               Corporation and Seaside Holdings Inc. (f/k/a Cirond Technologies
               Inc.) dated November 13, 2003 (1)
--------------------------------------------------------------------------------
    2.3        Articles of Exchange (2)
--------------------------------------------------------------------------------
    3.1        Articles of Incorporation, as amended (3)
--------------------------------------------------------------------------------
    3.2        Bylaws, as amended (4)
--------------------------------------------------------------------------------
    4.1        Certificate of Designation of Series B 5% Convertible Preferred
               Stock (5)
--------------------------------------------------------------------------------

                                       20

<PAGE>
--------------------------------------------------------------------------------
 REGULATION
 S-B NUMBER                            EXHIBIT
--------------------------------------------------------------------------------
   10.1        Management Advisory Services Agreement with Amber Tiger Holdings
               Corp. dated February 1, 2002 (2)
--------------------------------------------------------------------------------
   10.2        Management Advisory Services Agreement with Headline Technologies
               Ltd. dated February 1, 2002 (2)
--------------------------------------------------------------------------------
   10.3        Management Advisory Services Agreement with Amber Tiger Holdings
               Corp. dated January 1, 2004 (2)
--------------------------------------------------------------------------------
   10.4        2004 Stock Option Plan (6)
--------------------------------------------------------------------------------
   10.5        Agreement with Regency Capital Partners dated October 1, 2004, as
               amended November 2, 2004 (7)
--------------------------------------------------------------------------------
   10.6        Form of Securities Purchase Agreement dated as of December 22,
               2004 between Cirond Corporation and the Purchaser named therein
               (5)
--------------------------------------------------------------------------------
   10.7        Registration Rights Agreement dated December 22, 2004 between
               Cirond Corporation and the Purchasers named therein (5)
--------------------------------------------------------------------------------
   10.8        Form of Common Stock Purchase Warrant (5)
--------------------------------------------------------------------------------
   10.9        Form of Additional Investment Right (5)
--------------------------------------------------------------------------------
   10.10       Source Code License Agreement dated January 21, 2004 between
               Computer Associates International, Inc. and Cirond Networks, Inc.
--------------------------------------------------------------------------------
   14.1        Code of Business Conduct and Ethics
--------------------------------------------------------------------------------
   16.1        Letter from Parker & Co. dated December 3, 2003 (1)
--------------------------------------------------------------------------------
   21.1        Subsidiaries of Cirond Corporation (2)
--------------------------------------------------------------------------------
   31.1        Rule 13a-14(a) Certification of Chief Executive Officer
--------------------------------------------------------------------------------
   31.2        Rule 13a-14(a) Certification of Chief Financial Officer
--------------------------------------------------------------------------------
   32.1        Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
               Chief Executive Officer
--------------------------------------------------------------------------------
   32.2        Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
               Chief Financial Officer
--------------------------------------------------------------------------------

--------------
(1)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K dated November 25, 2003, filed December 5, 2003.
(2)      Incorporated by reference to the exhibits to the registrant's annual
         report on Form 10-KSB for the fiscal year ended December 31, 2003,
         filed May 10, 2004.
(3)      Incorporated by reference to the exhibits to the registrant's
         registration statement on Form 10-SB, filed April 29, 2002.
(4)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K dated December 17, 2004, filed December 22, 2004.

                                       21

<PAGE>

(5)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K dated December 22, 2004, filed December 23, 2004.
(6)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K dated September 20, 2004, filed October 5, 2004.
(7)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K dated October 1, 2004, filed December 2, 2004.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

         For the fiscal years ended December 31, 2004 and 2003, our principal
accountant is expected to bill approximately $ 41,950 and billed $35,750,
respectively, for the audit of our annual financial statements and review of
financial statements included in our Form 10-QSB filings.

AUDIT-RELATED FEES

         There were no fees billed for services reasonably related to the
performance of the audit or review of our financial statements outside of those
fees disclosed above under "Audit Fees" for fiscal years 2004 and 2003.

TAX FEES

         For the fiscal years ended December 31, 2004, 2003 and 2002, our
principal accountant is expected to bill approximately $25,000 and has billed
$nil, respectively, for tax compliance, tax advice, and tax planning services.

ALL OTHER FEES

         There were no fees billed for services by our principal accountant,
other than those disclosed above.

PRE-APPROVAL POLICIES AND PROCEDURES

         Prior to engaging our accountants to perform a particular service, our
board of directors obtains an estimate for the service to be performed. The
audit committee in accordance with our procedures approved all of the services
described above.














                                       22

<PAGE>


                                   SIGNATURES

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

                                      CIROND CORPORATION



Date:   March 22, 2005                By:  /s/ NICHOLAS R. MILLER
                                         ---------------------------------------
                                            Nicholas R. Miller, President

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

<TABLE>
<CAPTION>
           SIGNATURE                             TITLE                              DATE
<S>                                 <C>                                         <C>

                                    President, Chief Executive Officer
/s/ NICHOLAS MILLER                 and Director (Principal Executive
-------------------------------     Officer)                                    March 22, 2005
Nicholas Miller

                                    Chief Financial Officer (Principal
/s/ DAVID REDEKOP                   Financial and Principal Accounting
-------------------------------     Officer)                                    March 22, 2005
David Redekop


/s/ TATE HOLT
-------------------------------     Director                                    March 22, 2005
Tate Holt


/s/ BLAINE ARCHER
-------------------------------     Director                                    March 22, 2005
Blaine Archer

</TABLE>



<PAGE>




















                  Consolidated Financial Statements of

                  CIROND CORPORATION

                  (Expressed in United States dollars)

                  Year ended December 31, 2004














                                      F-1



<PAGE>




INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of Cirond Corporation



We  have  audited  the  accompanying   consolidated  balance  sheets  of  Cirond
Corporation  as of  December  31, 2004 and 2003,  and the  related  consolidated
statements of loss, stockholders' equity (deficiency) and comprehensive loss and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material  respects,  the financial position of Cirond Corporation
as of December 31, 2004 and 2003, and the results of its operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in note 2(a) to
the consolidated  financial  statements,  the Company has an accumulated deficit
and has negative cash flow from operations, factors that raise substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also  discussed in note 2(a).  The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.



/s/ KPMG LLP


Chartered Accountants

Kelowna, Canada

February 10, 2005




                                      F-2

<PAGE>
CIROND CORPORATION

Consolidated Balance Sheets

(Expressed in United States dollars)

December 31, 2004 and 2003

<TABLE>
<CAPTION>
========================================================================================================
                                                                            2004                2003
--------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                <C>
ASSETS

Current assets:
     Cash                                                              $   1,308,086      $      86,066
     Amounts receivable, net of allowance of nil (2003 - $nil)                14,883             19,679
     Prepaid expenses and deposits                                            17,873             12,492
     ---------------------------------------------------------------------------------------------------
                                                                           1,340,842            118,237

Property, plant and equipment (note 4)                                        57,875             54,497

Website development (note 5)                                                   6,342              9,512

--------------------------------------------------------------------------------------------------------
                                                                       $   1,405,059      $     182,246
========================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
     Accounts payable and accrued liabilities                          $     188,698      $     165,522
     Consulting fees payable (note 6)                                        134,611            130,000
     Deferred revenue                                                          5,874              6,884
     Dividends payable                                                         2,466                  -
     Share subscriptions payable (note 7)                                    400,000            375,000
     Loan payable (note 8)                                                      -                75,000
     Due to stockholder (note 9)                                             111,575            171,576
     ---------------------------------------------------------------------------------------------------
                                                                             843,224            923,982

Redeemable, convertible preferred stock with a par value of
   $0.001.  25,000,000 authorized, 2,000 issued (December 31,
   2003 - nil), net of deferred financing costs (note 10)                     70,500                  -

Stockholders' equity (deficiency):
     Capital stock:
           100,000,000  voting common shares, with $0.001 par value
                        authorized, 37,110,000 issued (December 31,
                        2003 - 34,460,000)                                    37,110             34,460

     Additional paid-in capital                                            3,595,739            915,913
     Deficit                                                              (3,141,514)        (1,692,109)
     ---------------------------------------------------------------------------------------------------
                                                                             491,335           (741,736)
Going concern (note 2(a))
Commitments (note 12)
Subsequent event (note 14)
--------------------------------------------------------------------------------------------------------
                                                                       $   1,405,059      $     182,246
========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>


CIROND CORPORATION

Consolidated Statements of Loss

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

<TABLE>
<CAPTION>
=========================================================================================================
                                                                             2004          2003
---------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>
Revenue:
     Software license fees                                            $      955,931       $      27,649


Expenses:
     Advertising and promotion                                               220,715              69,471
     Amortization                                                             26,045              24,650
     Consulting fees (note 6)                                                868,883             255,945
     Foreign currency exchange loss                                            4,855               2,408
     Interest                                                                  3,532               1,867
     Office and administrative                                                72,387              22,192
     Professional fees                                                       203,775             100,071
     Research and development                                                576,894             404,886
     Salaries and benefits                                                   238,598              98,894
     Travel                                                                  181,413             111,232
     ----------------------------------------------------------------------------------------------------
                                                                           2,397,097           1,091,616

---------------------------------------------------------------------------------------------------------
Loss before interest income                                               (1,441,166)         (1,063,967)

Interest income                                                                3,727                   5

---------------------------------------------------------------------------------------------------------
Loss                                                                  $   (1,437,439)      $  (1,063,962)
=========================================================================================================

Weighted average number of common shares outstanding,
   basic and diluted                                                      35,451,397          18,722,082

Loss per common share, basic and diluted                              $        (0.04)      $       (0.06)
=========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.



                                      F-4
<PAGE>


CIROND CORPORATION

Consolidated Statement of Stockholders' Equity (Deficiency) and Comprehensive
Loss

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                                                                              Total
                                                                                      Additional                      stockholders'
                                                                  Common Stock           paid-in                             equity
                                                              Shares        Amount       capital         Deficit        (deficiency)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>           <C>          <C>            <C>               <C>

Balance, December 31, 2002                                17,000,000    $    1,700   $   298,672    $   (503,500)     $    (203,128)

Shares held by Cirond stockholders and effect
   of recapitalization transaction (note 3)               16,160,000             1             -        (124,647)          (124,646)

Promissory notes converted to shares at $0.50
   per share (note 3)                                      1,300,000           130       649,870               -            650,000

Adjustment to capital stock to equal par value
   of Cirond capital stock                                         -       132,629       (32,629)              -                  -

Comprehensive loss:
   Loss                                                            -             -             -      (1,063,962)        (1,063,962)
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2003                                34,460,000        34,460       915,913      (1,692,109)          (741,736)
Common shares issued for cash at $0.50 per share
   (net of costs)                                            700,000           700       322,800               -            323,500
Common shares issued for share subscriptions                 750,000           750       374,250               -            375,000
Common shares issued for consulting services held
   in escrow (note 11)                                     1,200,000         1,200       228,776               -            229,976
Financing cost assigned to warrants issued in
   connection with redeemable, convertible preferred
   shares less financing costs (note 10)                           -             -       569,000               -            569,000
Beneficial conversion option on redeemable, convertible
   of preferred shares (note 10)                                   -             -     1,185,000               -          1,185,000
Accretion of discount on redeemable, convertible
   preferred shares (note 10)                                      -             -             -          (8,900)            (8,900)
Amortization of deferred financing costs (note 10)                 -             -             -            (600)              (600)
Dividend on redeemable, convertible preferred shares               -             -             -          (2,466)            (2,466)
Comprehensive loss:
   Loss                                                            -             -             -      (1,437,439)        (1,437,439)

------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2004                                37,110,000    $   37,110   $ 3,595,739    $ (3,141,514)     $     491,335
====================================================================================================================================
</TABLE>

See accompanying notes to financial statements.


                                      F-5

<PAGE>
CIROND CORPORATION

Consolidated Statements of Cash Flows

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003
<TABLE>
<CAPTION>
======================================================================================================
                                                                              2004               2003
------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>
Cash provided by (used in):

Operations:
     Loss                                                            $  (1,437,439)     $  (1,063,962)
     Item not involving cash:
         Amortization                                                       26,045             24,650
         Common shares issued for services                                 229,976                  -
     Changes in non-cash working capital:
         Amounts receivable                                                  4,796            (16,166)
         Prepaid expenses and deposits                                      (5,381)           (12,080)
         Accounts payable and accrued liabilities                           23,176             69,807
         Consulting fees payable                                            (4,611)            65,000
         Deferred revenue                                                   (1,010)             6,884
     -------------------------------------------------------------------------------------------------
                                                                        (1,155,226)          (925,867)
Financing:
     Common shares issued for cash, net of costs                           323,500                  -
     Redeemable, convertible, preferred shares and
       warrants issued for cash, net of financing costs                  1,815,000                  -
     Promissory note proceeds                                                    -            650,000
     Share subscriptions proceeds                                          400,000            375,000
     Loan payable repayment                                                (75,000)                 -
     Advances from (to) stockholder                                        (60,001)            28,421
     -------------------------------------------------------------------------------------------------
                                                                         2,403,499          1,053,421

Investing:
     Expenditures on website development                                         -                  -
     Expenditures on property, plant and equipment                         (26,253)           (53,171)
     Advances to Cirond prior to recapitalization
       transaction (note 3)                                                      -            (55,157)
     Cash acquired on recapitalization transaction
       (note 3)                                                                  -              6,705
     -------------------------------------------------------------------------------------------------
                                                                           (26,253)          (101,623)

------------------------------------------------------------------------------------------------------
Increase in cash                                                         1,222,020             25,931

Cash, beginning of period                                                   86,066             60,135

------------------------------------------------------------------------------------------------------
Cash, end of period                                                  $   1,308,086      $      86,066
======================================================================================================

Supplementary information:
  Interest paid                                                      $       3,532      $       1,867
  Income taxes paid                                                  $           -      $           -
======================================================================================================

Non-cash financing and investing activities:
     Common shares issued for share subscription
       proceeds in the previous period                               $     375,000      $           -
     Common shares issued upon conversion of
       promissory notes (note 3)                                     $           -      $     650,000
     Net liabilities assumed on recapitalization
       transaction (note 3)                                          $           -      $      76,194
======================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6

<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

1.   OPERATIONS:

     Cirond  Corporation  ("Cirond" or the "Company") is incorporated  under the
     laws of the State of Nevada.  The Company develops  software  solutions and
     provides network security  products and consulting  services to governments
     and  private  sector  businesses  to combat  the  threat to wired  networks
     represented  by the  deployment  of  unauthorized  wireless  networks.  The
     Company's  solutions  can  also be used to  implement,  secure  and  manage
     wireless networks.  The Company's  financial  statements for the year ended
     December  31,  2003 and prior  years  included  additional  disclosure  for
     development stage enterprises.

2.   SIGNIFICANT ACCOUNTING POLICIES

     a)  Going concern

         These  financial  statements  have been  prepared on the going  concern
         basis,  which  assumes the  realization  of assets and  liquidation  of
         liabilities  and  commitments  in the normal course of business for the
         foreseeable   future.  The  Company  has  an  accumulated   deficit  of
         $3,141,514 and has incurred  negative cash flow from  operations.  This
         factor raises substantial doubt as to the Company's ability to continue
         as a going concern.

         The  application  of the going  concern  concept is dependent  upon the
         Company's  ability  to receive  continued  financial  support  from its
         creditors, stockholders and external investors and attaining profitable
         operations  through  the  sale  of  its  software.  These  consolidated
         financial  statements do not give effect to any  adjustment  should the
         Company be unable to continue as a going  concern  and,  therefore,  be
         required to realize its assets and discharge its  liabilities  in other
         than the normal course of business and at amounts  differing from those
         reflected in the consolidated financial statements. Management plans to
         obtain  equity  and  debt  financing  from  external  investors  and to
         actively market its wireless technology applications.

         Management believes the plan described above will be sufficient to meet
         the Company's  liabilities  and commitments as they become payable over
         the next twelve  months.  There can be no assurance  that  management's
         plan will be  successful.  Failure to obtain the support of  additional
         external  investors  to finance the  development  and  marketing of the
         Company's  wireless  technology  applications will cause the Company to
         curtail  operations  and impair the Company's  ability to continue as a
         going concern.




                                      F-7

<PAGE>


CIROND CORPORATION

Notes to Consolidated  Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     b) Basis of consolidation

         These  financial  statements  have been  prepared  in  accordance  with
         accounting  principles  generally  accepted  in the  United  States  of
         America and include  the  accounts of the Company and its  wholly-owned
         subsidiaries Cirond Networks Inc. and Cirond Networks (Canada) Inc. All
         material intercompany balances and transactions have been eliminated.

         Effective  November  25, 2003,  the Company  issued  17,000,000  common
         shares in  consideration  for 100% of the outstanding  common shares of
         Cirond Networks,  Inc. ("CNI"). As CNI stockholders obtained control of
         the Company through the exchange of shares,  the acquisition of CNI has
         been  accounted  for in these  consolidated  financial  statements as a
         recapitalization  transaction,  effectively as if CNI had issued shares
         for  consideration  equal to the net tangible assets of Cirond followed
         by a recapitalization of its common shares (note 3).

         On November 23, 2003, the Company's name was changed from  eXmailit.com
         to Cirond Corporation.

         The  consolidated  statements  of loss,  stockholders'  deficiency  and
         comprehensive loss and cash flows reflect the results of operations and
         changes  in  financial  position  of  CNI,  for  the  period  from  its
         incorporation,  combined with those of the legal parent,  Cirond,  from
         November 25, 2003, the date of the recapitalization.

     c)  Property, plant and equipment

         Property,  plant and  equipment,  consisting  of computer  hardware and
         software  and office  equipment,  are  recorded  at cost.  The  Company
         monitors the  recoverability of property,  plant and equipment based on
         estimates  using  factors such as expected  future  asset  utilization,
         business climate and future  undiscounted cash flows expected to result
         from the use of the related  assets or be realized on sale. The Company
         recognizes an impairment loss if the projected undiscounted future cash
         flows are less than the carrying  amount.  The amount of the impairment
         charge,  if any, is measured  equal to the excess of the carrying value
         over the  expected  future cash flows  discounted  using the  Company's
         average cost of funds.  To date no such  impairment has been indicated.
         Amortization  is provided  on a  straight-line  basis at the  following
         annual  rates which are  intended  to amortize  the cost of assets over
         their estimated useful life:

         =======================================================================
                                                                         Rate
         -----------------------------------------------------------------------

         Computer hardware                                                33%
         Computer software                                                50%
         Furniture and equipment                                          20%
         =======================================================================


                                      F-8

<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     d)  Website development

         Website  development  costs incurred in the planning stage are expensed
         as incurred.  The costs of application and  infrastructure  development
         incurred subsequent to the preliminary project stage that have received
         management  approval  for  further  development,  are  capitalized  and
         amortized on the straight-line  method over their estimated useful life
         (estimated to be three years). Once the website is developed, operating
         costs are expensed as incurred.

     e)  Revenue recognition

         In  accordance  with  the  provisions  of  the  American  Institute  of
         Certified  Public  Accountant's  Statement of Position  97-2  "Software
         Revenue  Recognition",   revenue  from  software  license  sales,  both
         directly and through value-added resellers, is recognized once delivery
         has occurred,  evidence of an arrangement  exists, the fee is fixed and
         determined and collection of the fee is probable, provided there are no
         significant  vendor  obligations   remaining.   The  Company  estimates
         allowances  for  returns  arising  from  warranty  provisions  based on
         historical experience. For multiple element arrangements,  where Vendor
         Specific Objective Evidence ("VSOE") of fair value is available for all
         elements,   the   contract   value  is   allocated   to  each   element
         proportionately  based upon  relative VSOE of fair value and revenue is
         recognized  separately  for each  element.  Where VSOE of fair value is
         available for all undelivered elements,  the residual method is used to
         value the delivered elements. Where VSOE of fair value is not available
         for an undelivered  element all revenue for the arrangement is deferred
         until the earlier of the point at which VSOE does exist or all elements
         of the arrangement have been delivered, unless the undelivered elements
         are post  contract  customer  support  arrangements,  in which case the
         arrangement revenue is recognized  ratably, or services,  in which case
         the  arrangement  revenue is  recognized  as the services are provided.
         Periodically  we sell to  value-added  resellers  ("VAR")  under  terms
         consistent with those applied to other customers. We do not offer price
         protection  or rights of  return  to VARs and  consideration  terms and
         sales are not dependant on the option of the resellers.

     f)  Product development costs

         Costs for the  development  of new  software  are  expensed as incurred
         until technological feasibility has been established, at which time any
         additional  development  costs are  capitalized in accordance with SFAS
         No. 86,  "Accounting  for the Costs of  Computer  Software  to be Sold,
         Leased or Otherwise Marketed". The Company believes its current process
         for developing software is essentially completed  concurrently with the
         establishment of technological feasibility,  accordingly, no costs have
         been capitalized to date.


                                      F-9
<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003
================================================================================

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     g)  Income taxes

         The Company  accounts  for income  taxes using the asset and  liability
         method.  Under the asset and liability method,  deferred tax assets and
         liabilities are recognized for the future tax consequences attributable
         to  differences  between the financial  statement  carrying  amounts of
         existing  assets and liabilities  and their  respective tax bases,  and
         operating loss and tax credit carry  forwards.  Deferred tax assets and
         liabilities  are measured  using enacted tax rates expected to apply to
         taxable income in the years in which those  temporary  differences  are
         expected to be recovered or settled.  The effect on deferred tax assets
         and liabilities of a change in tax rates is recognized in income in the
         period that includes the enactment date.

         When it is not  considered  to be more  likely than not that a deferred
         tax asset will be realized,  a valuation  allowance is provided for the
         excess.

         The Company has estimated consolidated  non-capital losses available to
         reduce future years' taxable  income of  approximately  $3,000,000.  No
         amount  has  been  reflected  on the  consolidated  balance  sheet  for
         deferred  income taxes as any deferred  income tax asset has been fully
         offset by a valuation allowance.

     h)  Loss per common share

         Basic loss per common  share has been  calculated  by  dividing  income
         available  to common  shareholders  by the weighted  average  number of
         common shares outstanding during the period. Income available to common
         shareholders is after  deduction for dividends  declared and cumulative
         dividends on preferred shares, if any. As the Company has a net loss in
         each of the periods presented, basic and diluted loss per share are the
         same.

     i)  Stock based compensation

         The Company  has an  outstanding  stock  option plan that is subject to
         final shareholder approval,  pursuant to which the Company has reserved
         6,710,000  shares  of  common  stock  to grant  to  certain  employees,
         officers, directors and consultants.

         The Company accounts for its employee (including director)  stock-based
         compensation  arrangements  in accordance with provisions of Accounting
         Principles  Board ("APB") Opinion No. 25.  "ACCOUNTING FOR STOCK ISSUED
         TO  EMPLOYEES",   and  related   interpretations.   Under  this  method
         stock-based  compensation  expense is only  recorded to the extent that
         equity  securities  are issued to employees  at an exercise  price less
         than the market value at the date of grant. Stock options, common stock
         and other  equity  instruments  issued to  non-employees  for  services
         received is based upon the fair value of the equity instruments issued,
         as the services are provided and the securities earned.


                                      F-10
<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     i)  Stock based compensation (continued)

         SFAS No.  123,  "ACCOUNTING  FOR  STOCK-BASED  COMPENSATION",  requires
         entitles  that  continue to apply the  provisions of APB Opinion No. 25
         for  transactions  with  employees  to provide  pro forma net  earnings
         (loss) and pro forma earnings (loss) per share disclosures for employee
         stock option grants as if the  fair-value-based  method defined in SFAS
         No. 123 had been applied to these transactions.

         For the years ended  December 31, 2004 and 2003,  no stock options were
         granted or irrevocably  committed to be issued to employees,  officers,
         directors or  consultants.  Accordingly,  there would be no  difference
         between the Company's reported loss and loss per common share for these
         periods had the Company  accounted for compensation  costs based on the
         fair value of stock options issued for services under SFAS No. 123.

     j)  Translation of financial statements

         The  Company's  functional  currency is the United States  dollar.  The
         Company's  subsidiary,  Cirond  Networks  (Canada) Inc.  ("CNI Canada")
         operates in Canada and incurs the  majority of its expenses in Canadian
         dollars, however the United States dollar has been determined to be its
         functional currency, as CNI Canada is entirely reliant upon the Company
         to fund its operations  and the majority of the Company's  consolidated
         sales are in United States dollars and to the United States  customers.
         Accordingly  the method of translation of Canadian dollar balances into
         the United States dollar is as follows:

         i)   Monetary  assets  and  liabilities  are  translated at the rate of
              exchange in effect at the balance sheet date.

         ii)  Non-monetary  assets and liabilities are translated at the rate of
              exchange in effect at the date the transaction occurred.

         iii) Revenues  and  expenses  are  translated  at  the exchange rate in
              effect at the transaction date.

         iv)  The net adjustment arising from the translation is included in the
              consolidated statement of loss.

     k)  Recent accounting pronouncements

         During January 2003, the FASB issued,  and  subsequently  revised,  its
         Interpretation No. 46, Consolidation of Variable Interest Entities. The
         interpretation  addresses  consolidation  of certain  entities in which
         equity  investors  do not have  the  characteristics  of a  controlling
         financial  interest  or do not have  sufficient  equity at risk for the
         entity  to  finance  its  activities  without  additional  subordinated
         financial support from other parties.  The Company is required to apply
         the consolidation  provisions of the interpretation as of the beginning
         of its second quarter of fiscal 2004.  Implementation of Interpretation
         No.  46, as  revised,  has not had a material  effect on the  Company's
         financial position or results of operations.


                                      F-11


<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     k)  Recent accounting pronouncements (continued)

         In May 2003,  the FASB  issued  SFAS No.  150,  Accounting  for Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity. SFAS No. 150 requires that certain financial instruments issued
         in the  form of  shares  that  are  mandatorily  redeemable  as well as
         certain other financial instruments be classified as liabilities in the
         financial   statements.   SFAS  No.  150  is  effective  for  financial
         instruments  entered into or modified  after May 31, 2003.  In the year
         ended  December 31, 2004, the Company  issued  redeemable,  convertible
         preferred  stock,  the  presentation  of which, in accordance with SFAS
         150, was reviewed by management (note 10).

         FASB  issued a revision  of SFAS No. 123  "ACCOUNTING  FOR  STOCK-BASED
         COMPENSATION"  ("SFAS No.  123(R)").  SFAS No. 123(R) requires a public
         entity to measure  the cost of employee  services  received in exchange
         for an award of equity  instruments  based on the grant date fair value
         of the  award.  The  compensation  cost is to be  recognized  over  the
         service  period  which  is  determined  by  the  vesting  period.  This
         statement  is effective  as of the  beginning  of the first  interim or
         annual  reporting  period that begins after June 15, 2005. The adoption
         of a revised SFAS 123 will impact the Company's  operating expenses and
         shareholders' equity (deficiency) to the extent that the Company issues
         a stock option in  consideration  for services in  connection  with its
         proposed stock option plan (note 2(i)).

     l)  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 contingent  assets
         and  liabilities  at the  date  of the  financial  statements  and  the
         reported  amounts of revenues  and expenses  during the period.  Actual
         results could differ from those estimates.














                                      F-12


<PAGE>

CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


3.   RECAPITALIZATION TRANSACTION:


     Effective  November  25,  2003,  CNI and Cirond  executed an amended  share
     exchange  agreement.  At  November  25,  2003,  Cirond was a shell  company
     without substantive  operations.  Just prior to the share exchange,  Cirond
     effected  a  16:1  forward  stock  split  followed  by  a  cancellation  of
     47,840,000  common shares reducing the total  outstanding  common shares of
     the Company to 16,160,000. The Company then issued 17,000,000 common shares
     to the  stockholders  of CNI in  consideration  for all of the  issued  and
     outstanding  common  shares  of  CNI.  As the  former  stockholders  of CNI
     obtained   control  of  the  Company  through  the  share  exchange,   this
     transaction  has been  accounted  for in these  financial  statements  as a
     recapitalization  transaction.  Under recapitalization  accounting,  CNI is
     considered to have issued common shares for consideration  equal to the net
     monetary assets of Cirond with the results of Cirond operations included in
     the consolidated financial statements from the date of recapitalization.

     Net deficiency assumed:
       Cash                                                       $       6,705
       Accounts payable and accrued liabilities                          (1,194)
       Loan payable                                                     (75,000)
       Advances from CNI prior to recapitalization transaction          (55,157)
     ---------------------------------------------------------------------------
                                                                       (124,646)

     Consideration given for net deficiency assumed:
       17,000,000 common shares issued                                        1

       Charge to deficit                                               (124,647)
     ---------------------------------------------------------------------------
                                                                  $    (124,646)
     ===========================================================================

     Immediately  subsequent to the  recapitalization  transaction,  the Company
     issued 1,300,000 common shares in exchange for $650,000 of promissory notes
     in CNI.









                                      F-13
<PAGE>



CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


4.   PROPERTY, PLANT AND EQUIPMENT:

     ==========================================================================
     2004                                     Cost    Accumulated      Net book
                                                     amortization         value
     --------------------------------------------------------------------------

     Computer hardware                 $    56,732    $    19,545   $    37,187
     Computer software                      14,485          9,752         4,733
     Furniture and equipment                28,349         12,394        15,955
     --------------------------------------------------------------------------
                                       $    99,567    $    41,692   $    57,875
     ==========================================================================


     ==========================================================================
     2003                                     Cost    Accumulated      Net book
                                                     amortization         Value
     --------------------------------------------------------------------------

     Computer hardware                 $    41,892    $    10,127   $    31,765
     Computer software                       9,233          6,457         2,776
     Furniture and equipment                25,386          5,430        19,956
     --------------------------------------------------------------------------
                                       $    76,511    $    22,014   $    54,497
     ==========================================================================



5.   WEBSITE DEVELOPMENT:

     ==========================================================================
     2004                                     Cost    Accumulated      Net book
                                                     amortization         Value
     --------------------------------------------------------------------------

     Website development costs         $    19,025     $   12,683   $     6,342

     ==========================================================================

     ==========================================================================
     2003                                     Cost    Accumulated      Net book
                                                     amortization         Value
     --------------------------------------------------------------------------

     Website development costs         $    19,025     $    9,513   $     9,512

     ==========================================================================





                                      F-14

<PAGE>

CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


6.   RELATED PARTY TRANSACTIONS:

     During the year ended  December 31, 2004, the Company  incurred  consulting
     fees from a company controlled by the President and Chief Executive Officer
     totaling $180,000 (2003 - $120,000).  At December 31, 2004, $40,000 (2003 -
     $40,000) of these consulting fees were included in consulting fees payable.

     During the year ended  December 31, 2004, the Company  incurred  consulting
     fees from a Company  controlled by the Chief  Technology  Officer  totaling
     $120,000  (2003 - $120,000).  At December 31, 2004 $70,000 (2003 - $80,000)
     of those  consulting  fees were  included in  accounts  payable and accrued
     liabilities consulting fees payable.

     The  amounts  were  incurred  in the normal  course of  operations  and are
     recorded at the exchange amount, which is the amount established and agreed
     to by the related parties.

7.   SHARE SUBSCRIPTIONS PAYABLE:

     In April 2004,  the Company  received a subscription  for 4,000,000  common
     shares and common share purchase warrants for aggregate cash proceeds of $2
     million pursuant to an irrevocable  subscription agreement.  The subscriber
     was granted common share purchase warrants as follows:


     ===========================================================================
     Number of common shares       Exercise price                   Expiry date
     ---------------------------------------------------------------------------

     1,000,000                        $      0.50                April 19, 2005
     1,000,000                        $      0.75                April 19, 2005
     1,000,000                        $      1.00                April 19, 2006
     1,000,000                        $      1.25                April 19, 2006
     ===========================================================================

     In May 2004, the subscriber requested that his investment be rescinded and,
     without waiving any of its rights it may have against the  subscriber,  the
     Company  returned $1.5 million,  and subsequently  repaid $100,000,  of the
     $2.0 million share subscription to the subscriber.  As at December 31, 2004
     and  subsequent  to December  31, 2004,  the Company  offered to return the
     remaining  $400,000 to the subscriber upon execution of a mutual settlement
     agreement. The subscriber has refused the offer. If such refusal continues,
     the  Company  intends to issue  common  shares and  common  share  purchase
     warrants under the terms  initially  agreed to. The outcome of this matter,
     including the  settlement  of the liability  through the payment of cash or
     issuance  of common  shares  and  common  share  purchase  warrants  and if
     additional  costs will be  incurred  on the  settlement  of the  liability,
     cannot be determined at this time.




                                      F-15

<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


8.   LOAN PAYABLE:

     The loan payable was unsecured,  non-interest  bearing and not subject to a
     written agreement. The loan was repaid in the year ended December 31, 2004.

9.   DUE TO STOCKHOLDER:

     The amount due to a stockholder is unsecured,  non-interest bearing and has
     no fixed terms of repayment.

10.  REDEEMABLE, CONVERTIBLE PREFERRED STOCK:

     On  December  22,  2004  the  Company  entered  into  Securities   Purchase
     Agreements with several accredited  investors pursuant to which the Company
     agreed to sell,  and the  Investors  agreed to  purchase,  2,000  shares of
     Series B 5% Convertible  Preferred  Stock,  warrants to purchase  2,325,584
     shares  of common  stock,  and  Additional  Investment  Rights  for a total
     consideration of $2,000,000. The warrants are exercisable for five years at
     $0.55 per share. The Preferred Stock may be converted into shares of common
     stock at a price of  $0.43  per  share  at any  time  after  issuance.  The
     Additional Investment Rights entitle the Purchasers to buy up to $4,000,000
     of Preferred  Stock and warrants on the same terms for period of six months
     following  the  effective  date of a  Registration  Statement  on Form SB-2
     related to common  shares to be issued on  conversion  or redemption of the
     preferred  shares.  In  connection  with  the  subscription,   Cirond  paid
     Ascendiant   Securities,   LLC  a  cash   commission   of  $160,000  and  a
     non-accountable   expense  allowance  of  $25,000,  and  issued  Ascendiant
     warrants  for the  purchase of up to  1,674,419  shares of common  stock at
     $0.55 per share.  The  warrants  are  exercisable  for a  five-year  period
     commencing  from the date on which  the  right  to  exercise  the  warrants
     vested.  The warrants are currently  vested as to 372,093  shares.  Further
     vesting will occur as warrants and Additional  Investment  Right securities
     are exercised. The warrants contain piggyback registration rights and a net
     exercise provision.

     The terms of the preferred  stock provide that on the fifth  anniversary of
     the original issue date  (December 22, 2009),  the Company shall redeem all
     of the then  outstanding  shares of preferred stock, for an amount in cash,
     or if certain conditions are met during the 30 days prior to the redemption
     date and at the  election  of the  Company,  in  shares  of  common  stock.
     Accordingly,  only  unconverted  preferred  shares  will be subject to this
     redemption  feature.  As the redemption  feature of the preferred shares is
     contingent upon the holder not having  converted the preferred  shares into
     common shares prior to the specified  date,  management  has concluded that
     the  redeemable,  convertible  preferred  shares  are  not  required  to be
     classified as a liability under SFAS 150 but that this feature represents a
     contingent redemption feature under paragraph 10 of the standard.  However,
     as all of the conditions,  as defined in the Securities Purchase Agreement,
     must be met for the Company to be able to redeem any outstanding shares for
     other then cash, management has concluded that the preferred shares must be
     classified outside of permanent shareholders' deficiency in accordance with
     SEC Regulation S-X5-02(28).



                                      F-16


<PAGE>

CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


10.  REDEEMABLE, CONVERTIBLE PREFERRED STOCK (CONTINUED):

     The gross proceeds of $2,000,000  and net proceeds of $1,815,000  have been
     allocated between the redeemable  preferred stock and common share purchase
     warrants  based on their  relative fair values at the issue date.  The fair
     value of the warrants was estimated  using the Black Scholes option pricing
     model using the expected useful lives of the warrants,  a volatility factor
     of 90%, a risk free rate of 4.0% and no assumed dividend rate. Accordingly,
     $627,000  of the gross  proceeds  and  $569,000  of the net  proceeds  were
     assigned  to  warrants  and  included  in  additional  paid-in  capital and
     $1,373,000  of the gross  proceeds and  $1,246,000 of the net proceeds were
     assigned to redeemable, convertible preferred shares.

     A  beneficial   conversion  option  existed  at  the  issue  date  for  the
     redeemable,  convertible preferred shares, as the conversion price of $0.43
     per share was less than the quoted market value of the common shares on the
     issue  date.  The  beneficial   conversion  option  was  calculated  to  be
     $1,185,000 and recorded as a discount to redeemable,  convertible preferred
     stock and an increase in additional paid-in capital.

     The discount between the redemption amount and allocated  proceeds is being
     accreted  to the  redemption  price  on  December  22,  2009  and  deferred
     financing  costs are being  amortized  to December 22, 2009 by the interest
     method with the accretion and amortization charged to deficit. The balances
     at December 31, 2004 are as follows:

<TABLE>
<CAPTION>
     ===========================================================================================================
                                                    Redeemable
                                                   Convertible                  Deferred
                                                     Preferred                 Financing
                                                        Shares                     Costs                 Total
     -----------------------------------------------------------------------------------------------------------
<S>                                          <C>                       <C>                     <C>
     Consideration                           $       2,000,000         $        (185,000)      $     1,815,000

     Assigned to warrants                             (627,000)                   58,000              (569,000)
     -----------------------------------------------------------------------------------------------------------
                                                     1,373,000                  (127,000)            1,246,000

     Beneficial conversion option                   (1,185,000)                     -               (1,185,000)
     -----------------------------------------------------------------------------------------------------------
                                                       188,000                  (127,000)               61,000

     Accretion and amortization to
       December 31, 2004                                 8,900                       600                 9,500

     -----------------------------------------------------------------------------------------------------------
     Balance, December 31, 2004              $         196,900         $        (126,400)      $        70,500
     ===========================================================================================================
</TABLE>




                                      F-17


<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================


11.  COMMON SHARES ISSUED FOR CONSULTING SERVICES:

     a)  On  August 2, 2004, Cirond entered into a Management Services Agreement
         with  Securities  Trading  Services  Inc.  ("STS").  The  agreement was
         effective as of August 2, 2004 and has a term of two years. Pursuant to
         the terms of the agreement,  Cirond must issue 1,200,000  shares of its
         common stock to STS in consideration of services to be provided by STS.
         Common shares in the name of STS will be held in escrow by Cirond, with
         Cirond  releasing 50,000 shares from escrow for every month as services
         are performed.  STS may not vote any unearned shares held in escrow. In
         the event of a  termination  of the  agreement  by Cirond for breach or
         cause,  Cirond may repurchase and cancel any unearned shares for $0.001
         per  share in an  amount  equal to 50,000  shares  times the  number of
         months remaining under the agreement after termination. STS was granted
         piggy-back registration rights in connection with the agreement and the
         shares  are  subject  to  anti-dilution  provisions  in the  event of a
         consolidation of Cirond's share capital.  In addition,  upon closing of
         an  equity  financing  of  $1  million  dollars,  Cirond  shall  pay  a
         consulting  fee in the  amount  of  $5,000 to STS upon the first day of
         each month  over the  remaining  term of the  contract.  Subsequent  to
         December 31, 2004,  the monthly  consulting  was increased to an agreed
         amount of $10,000 per month.  Upon closing of an equity financing of $5
         million or more,  the  consulting  fee shall be increased to $8,000 per
         month.  The  agreement  also  provides for the  accelerated  release of
         shares from escrow, if STS secures financing for Cirond, as follows:

         o   100,000 shares upon STS securing an equity financing of $1 million.
         o   An additional 200,000 shares upon STS securing  and  additional  $2
             million of equity financing.
         o   An  additional  450,000  shares upon  STS securing an additional $5
             million of equity financing.
         o   An  additional  450,000 shares  upon STS securing  an additional $5
             million of equity.

         Common  shares are valued as services are  performed  and common shares
         are earned and eligible for release from escrow.  To December 31, 2004,
         $229,976  in  compensation   expense  was  recorded  for  the  year  in
         consulting fees and 250,000 common shares were earned and released from
         escrow.  Unearned  shares that have not been  released from escrow have
         not been included in the calculation of the weighted  average number of
         common shares, basic and diluted.

12.  COMMITMENTS:

     On  May 1, 2003, the Company entered an operating lease for office premises
     that requires the following annual minimum lease payments:

     ===========================================================================
     2004                                                    $         25,518
     2005                                                    $         28,158
     2006                                                    $          9,674
     ===========================================================================


                                      F-18

<PAGE>


CIROND CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2004 and 2003

================================================================================

13.  REVENUE:

     During the year ended December 31, 2004, the Company issued a perpetual
     license for the use of its source code for its existing software products
     to a third party in exchange for cash proceeds of $700,000. In conjunction
     with this agreement, the Company will provide support and maintenance
     services for a one year term for cash proceeds of $100,000. Support and
     maintenance services are renewable, at the option of the customer, at
     $100,000 per annum. Subsequent to December 31, 2004, the customer elected
     not to renew support and maintenance services.

     The Company's revenue from its various product families is as follows:


     ===========================================================================
                                                   2004                  2003
     ---------------------------------------------------------------------------

     Winc products                          $   118,525        $       27,649
     AirPatrol products                          43,280                     -
     Source code license and support            794,126                     -

     ---------------------------------------------------------------------------
                                            $   955,931        $       27,649
     ===========================================================================

14.  SUBSEQUENT EVENT:

     Subsequent  to  December  31,  2004,  the  Company   negotiated  a  revised
     consulting  agreement with an arms-length  service provider.  In connection
     with the new agreement,  the service  provider  agreed to forgive  accounts
     payable owing to them at December 31, 2004 of $50,000.  Accordingly, a gain
     on settlement of accounts  payable will be recognized,  in connection  with
     the revised agreement, in the first quarter of 2005.












                                      F-19