**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**




**___________________________**





**FORM
      10-QSB/A**


**__________________**







(Mark
                One)**x**
            **QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934****For
                the Quarterly Period Ended June 30, 2007****OR****o**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934****For
                the transition period from ________________to
                ___________________**





Commission
      File Number: **000-24595**





**NEXTPHASE
      WIRELESS, INC.**


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




**Nevada**
            
            **88-0343832**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)







**300
      S. Harbor Blvd.,Anaheim,California92805**


(Address
      of principal executive offices)








**(800)
      748-5548**


(Issuer's
      telephone number, including area code)




________________________________________________________________


(Former
      name, former address and former fiscal year if changed since last
      report)








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 o




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




**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEEDING FIVE
      YEARS.**





Check
      whether registrant filed all documents and reports required to be filed by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. Yes o  No x





**APPLICABLE
      TO CORPORATE ISSUERS**





State
      the
      number of shares outstanding of each of the issuer's class of common equity,
      as
      of the latest practicable date: There are 34,611,738 shares of common stock
      outstanding as of August 29, 2007.


Transitional
      Small Business Disclosure Format (check one) Yes x No
o








Table
          of Contents




**NEXTPHASE
      WIRELESS, INC.**





Quarterly
      Report on Form 10-QSB for the


Quarterly
      Period Ending June 30, 2007





**TABLE
      OF CONTENTS**


**EXPLANATORY
          NOTE**
 
 On
          August
          20, 2007, we filed our Quarterly Report on Form 10-QSB for the quarter
          ended
          June 20, 2007 (the “Original Report”) with the Securities and Exchange
          Commission.  Our previously filed interim condensed consolidated
          financial statements as of June 30, 2007 and for the three months ended
          June 30,
          2007 had not been reviewed by the Company’s independent registered public
          accounting firm as required under Statement of Auditing Standards (“SAS”) No.
          100 pursuant to Item 310(b) of the Securities and Exchange Commission’s
          Regulation S-B.  At the time of filing of the Original Report, the
          Company was unable to provide information to its independent registered
          public
          accounting firm to permit a complete review of the interim financial information
          included therein.
 
 The
          unaudited condensed consolidated financial statements as of June 30, 2007
          and
          for the three months ended June 20, 2007 included in Part I of this Amendment
          No. 1 to the Original Report have been reviewed by the Company’s independent
          registered public accounting firm as required by SAS no. 100.  Each
          item has been reproduced in its entirety in this Amendment No. 1.  Our
          Chief Executive Officer and Chief Financial Officer have also reissued
          their
          certifications required by Sections 302 and 906 of the Sarbanes-Oxley
          Act.


**Page
                  no.****PART
                  I - FINANCIAL
                  INFORMATION**
              
              1Financial
                  Statements
                  (Unaudited)
              
              1Item
                  2.
                  Management's Discussion and Analysis or Plan of
                  Operation
              
              10Item
                  3. Controls
                  and Procedures
              
              16**PART
                  II - OTHER
                  INFORMATION**
              
              16Item
                  1. Legal
                  Proceedings
              
              16Item
                  2.
                  Unregistered Sales of Equity Securities and Use of
                  Proceeds
              
              16Item
                  3.
                  Defaults Upon Senior Securities
              
              16Item
                  4.
                  Submission of Matters to a Vote of Security
                  Holders
              
              16Item
                  5. Other
                  Information
              
              16Item
                  6.
                  Exhibits
              
              16**SIGNATURES**
              
              17






Table
          of Contents







**PARTI.
      FINANCIAL INFORMATION**








**NextPhase
      Wireless, Inc.**


Condensed
      Consolidated Balance Sheet


(Unaudited)





**June
                  30,****2007****ASSETS**Current
                  assets:Cash
              $
              6,960Accounts
                  receivable
              
              88,350Other
                  current assets
              
              39,403Total
                  current assets
              
              134,713Property
                  and equipment -net
              
              287,250Customer
                  lists - net
              
              735,000Trademarks
              
              100,000Supply
                  contracts -net
              
              45,000Goodwill
              
              260,000Deposits
              
              8,636Total
                  assets
              $
              1,570,599**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**Current
                  liabilities:Accounts
                  payable
              $
              1,350,813Accrued
                  expenses
              
              139,711Deferred
                  revenue
              
              60,000Cash
                  advance payable
              
              100,000Notes
                  payable and capital leases,  current portion
              
              2,826,287Total
                  current liabilities
              
              4,476,811Notes
                  payable and capital leases, net of current portion
              
              33,265Total
                  liabilities
              
              4,510,076Commitments
                  and contingenciesStockholders'
                  deficit:Preferred
                  stock, $0.001 par value, 20,000,000 sharesauthorized;
                  no shares issued and outstandingCommon
                  stock, $0.001 par value, 200,000,000 sharesauthorized;  31,838,955
                  issued and outstanding
              
              31,839Additional
                  paid-in capital
              
              6,167,213Accumulated
                  deficit
              
              (9,138,529
              )Total
                  stockholders' deficit
              
              (2,939,477
              )Total
                  liabilities and stockholders' deficit
              $
              1,570,599




The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.







1
 Table
          of Contents





**NextPhase
      Wireless, Inc.**


Condensed
      Consolidated Statements of Operations


(Unaudited)







**For
                  the Quarter Ended June 30,****2007**
              
              
              **2006**Revenue
              $
              480,989
              
              
              $
              521,278Cost
                  of revenue
              
              236,920
              
              
              
              310,276Gross
                  profit
              
              244,069
              
              
              
              211,002Operating
                  expenses:Selling,
                  general and administrative
              
              551,034
              
              
              
              490,196Stock-based
                  compensation
              
              130,000
              
              
              
              100,199Depreciation
                  and amortization
              
              86,171
              
              
              
              65,769Total
                  operating expenses
              
              767,205
              
              
              
              656,164Operating
                  loss
              
              (523,136
              )
              
              
              (445,162
              )Other
                  income (expense):Legal
                  settlements- net
              
              74,069
              
              
              
              -Interest  expense
              
              (57,752
              )
              
              
              (57,934
              )Other
              
              -
              
              
              
              4,250Total
                  other income (expense)
              
              16,317
              
              
              
              (53,684
              )Loss
                  before income taxes
              
              (506,819
              )
              
              
              (498,846
              )Provision
                  for income taxes
              
              -
              
              
              
              -Net
                  loss
              $
              (506,819
              )
              
              $
              (498,846
              )Basic
                  and diluted net loss per share
              $
              (0.02
              )
              
              $
              (0.02
              )Weighted
                  average shares outstanding
              
              30,503,995
              
              
              
              23,955,662




The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.





2
 Table
          of Contents





**NextPhase
      Wireless, Inc.**


Condensed
      Consolidated Statements of Cash Flows


(Unaudited)




**For
                  the Three Months Ended****June
                  30,****2007**
              
              
              **2006****Cash
                  flows from operating activities:**Net
                  loss
              $
              (506,819
              )
              
              $
              (498,846
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Forgiveness
                  of notes payables, and accrued expenses
              
              (96,291
              )Issuance
                  of common stock for services
              
              130,000
              
              
              
              100,199Amortization
                  of discount on notes payable
              
              8,844
              
              
              
              8,075Interest
                  expense
              
              -
              
              
              
              49,859Depreciation
                  and amortization
              
              86,171
              
              
              
              65,769Changes
                  in assets and liabilities:Accounts
                  receivable
              
              27,804
              
              
              
              139,995Other
                  current assets
              
              -
              
              
              
              367Other
                  receivables
              
              -
              
              
              
              (91,891
              )Accounts
                  payable and accrued liabilities
              
              183,228
              
              
              
              84,959Deferred
                  revenue
              
              (18,000
              )
              
              
              43,749Net
                  cash used in operating activities
              
              (185,063
              )
              
              
              (97,765
              )**Cash
                  flows from investing activities:**Purchase
                  of furniture and equipment
              
              (26,410
              )
              
              
              (14,554
              )Net
                  cash used in investing activities
              
              (26,410
              )
              
              
              (14,554
              )**Cash
                  flows from financing activities:**
              
              
              
              
              
              0Proceeds
                  from notes payable
              
              150,000
              
              
              
              61,000Proceeds
                  from cash advances payable
              
              -
              
              
              
              100,000Principal
                  payments on notes payable and capital leases
              
              (3,250
              )
              
              
              (10,915
              )Net cash provided by financing activities
              
              146,750
              
              
              
              150,085Change
                  in cash
              
              (64,723
              )
              
              
              37,766Cash
                  at beginning of period
              
              71,683
              
              
              
              35,847Cash
                  and at end of period
              $
              6,960
              
              
              $
              73,613**Supplemental
                  disclosure of cash flow information:**Cash
                  paid during the period for:Interest
              $
              -
              
              
              $
              519Income
                  taxes
              $
              -
              
              
              $
              -Non-cash
                  investing and financing transactions:Issuance
                  of previously subscribed common stock
              $
              -
              
              
              $
              25,000Cancellation
                  of stock from legal settlements
              $
              -
              
              
              $
              250,000Cancellation
                  of stock originally issued in reverse merger
              $
              -
              
              
              $
              121Beneficial
                  conversion feature of notes payable
              $
              -
              
              
              $
              69,697Acquisition
                  of equipment under capital lease agreements and notes
                  payable
              $
              -
              
              
              $
              50,650Amortization
                  of deferred compensation
              $
              -
              
              
              $
              26,142Common
                  stock issued for services and legal settlement
              $
              -
              
              
              $
              20,000Common
                  stock issued for accounts payable and accrued expenses
              $
              108,100
              
              
              $
              37,639Note
                  payable issued in connection with acquisition
              $
              -
              
              
              $
              1,500,000








The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.








3
 Table
          of Contents




**NEXTPHASE
      WIRELESS, INC.**


**NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
 
 **NOTE
        1-NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**
 
 *Nature
        of Operations*
 NextPhase
        Wireless, Inc. (“NextPhase” or the “Company”) was incorporated on August 28,
        1995 in Nevada under the name of Professional Mining Consultants,
        Inc.
 
 On
        August
        3, 2004, NextPhase  consummated  a share  exchange
        in which it issued
        12,943,000  shares  of  common  stock,  or  approximately  76%
        of its outstanding common stock, to the shareholders of
        NextPhase Technologies, Inc.
        ("NTI")  in  exchange  for all of the shares of
        NTI.  As a result, NTI became a wholly owned subsidiary of
        NextPhase.  NTI was formed on September 14, 2000. For accounting
        purposes, this transaction is considered a "reverse merger,” and the historical
        financial statements of NextPhase reflect the operations of
        NTI.  Effective on the merger date, all financial activity became
        generated by NextPhase and NTI became an inactive subsidiary.  On
        January 21, 2005 the Company changed its name to NextPhase Wireless,
        Inc.
 
 Effective
        April 5, 2006, through its wholly-owned subsidiary SpeedFactory, Inc.
        (“SpeedFactory”), NextPhase acquired the Internet service and connectivity
        business assets previously operated by Synkronus, Inc. (“Synkronus”) under the
        name "SpeedFactory." Management's plans are discussed further in the Going
        Concern portion of Note 1.
 
 Prior
        to
        the acquisition of SpeedFactory, NextPhase had a limited operating history
        with
        revenue-generating products and services only recently entering the
        market.
 
 With
        the
        acquisition of SpeedFactory, NextPhase enhanced its position as a nationwide
        provider of scalable, reliable and cost effective connectivity solutions,
        expanding its portfolio of products and services to include DSL, T1s,
        co-location and web hosting. NextPhase continues to extend its wireless
“footprint” in Southern California, through a combination of organic growth and
        acquisition, NextPhase has continued to add small to medium business
        subscribers, small office/home office (SOHO) subscribers, and residential
        subscribers in underserved markets to its network.
 
 *Interim
        Financial Information*
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared by the Company in accordance with accounting principles generally
        accepted in the United States of America for interim financial information.
        These principles are consistent in all material respects with those applied
        in
        the Company's consolidated financial statements contained in the Company's
        annual report on Form 10-KSB for the year ended March 31, 2007, and pursuant
        to
        the instructions to Form 10-QSB and Item 310(b) of Regulation S-B promulgated
        by
        the United States Securities and Exchange Commission ("SEC"). Interim financial
        statements do not include all of the information and footnotes required by
        accounting principles generally accepted in the United States of America
        for
        complete financial statements. In the opinion of management, the accompanying
        unaudited condensed consolidated financial statements contain all adjustments
        (all of which are of a normal recurring nature, including the elimination
        of
        intercompany accounts) necessary to present fairly the financial position,
        results of operations and cash flows of the Company for the periods indicated.
        Interim results of operations are not necessarily indicative of the results
        to
        be expected for the full year or any other interim periods. These unaudited
        condensed consolidated financial statements should be read in conjunction
        with
        the consolidated financial statements and footnotes thereto contained in
        the
        Company's annual report on Form 10-KSB for the year ended March 31,
        2007.
 
 *Reclassification*
 Certain
        reclassifications have been made to conform prior periods' data to the current
        presentation. These reclassifications had no effect on reported
        loss.
 
 *Basis
        of Presentation*
 The
        accompanying consolidated financial statements include the accounts of NextPhase
        and its wholly-owned subsidiaries NTI, a California corporation formed on
        September 14, 2000, and SpeedFactory, a Nevada corporation formed on March
        14,
        2006. The term "Company" refers to NextPhase, NTI, and SpeedFactory
        collectively. All significant inter-company accounts and transactions have
        been
        eliminated in consolidation.
 
 The
        Company conducts its operations from its office located in Anaheim, California
        and the SpeedFactory location in Marietta, Georgia.
 
 The
        condensed consolidated financial statements presented include only the accounts
        of NTI, from its inception (September 14, 2000) through June 30, 2007, of
        NextPhase from August 3, 2004 through June 30, 2007, and of SpeedFactory
        from
        April 6, 2006 (date of acquisition) through June 30, 2007.
  4
 Table
            of Contents
 
 **NEXTPHASE
        WIRELESS, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
 
 **NOTE
        1-NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
        continued**
  *Going
        Concern and Management’s Plan*
 The
        accompanying financial statements have been prepared in conformity with
        accounting principles generally accepted in the United States of America,
        which contemplate continuation of the Company as a going concern. While the
        Company now has an established source of revenue, it has experienced net
        losses of $9,138,529 since inception.
 
 The
        Company has a working capital deficit of $4,342,098 at June 30, 2007. These
        factors raise substantial doubt about the Company's ability to continue as
        a
        going concern. Without realization of additional capital, it would be unlikely
        for the Company to continue as a going concern. These unaudited condensed
        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 result from this
        uncertainty.
 
 In
        the
        three months ended June 30, 2007, the Company executed short-term notes for
        $150,000. In July and August 2007, the Company issued convertible notes totaling
        $345,000 with interest at 7%, and all due in one year from the date of
        issuance.  In addition, the Company received a $275,000 advance from
        its secured note holder in July 2007 to assist in the acquisition of Interactive
        Network Services, Inc. (“INS”) which was finalized on July 22,
        2007.
 
 The
        Company has developed a plan to integrate additional Internet Service Providers
        (“ISPs”) in a scalable roll-up strategy.  The Company will acquire
        only profitable operations, both wireless and landline based, which are
        synergistic to the Company’s current operations in California and Georgia. The
        Company acquired the business of INS in July 2007 and has entered into a
        letter
        of intent to acquire another company whose acquisitions will greatly reduce
        the
        negative cash flow on a monthly basis. The Company expects the second
        acquisition to be completed in early fall 2007. Under its plans, management
        expects to generate positive operating cash flow during the fourth calendar
        quarter of 2007. There is no assurance that management will achieve its plan.
        There is further no assurance that the proceeds from operating cash flows
        or
        future financings will be sufficient to obtain profitable
        operations.
 
 The
        Company anticipates its current cash reserves, plus its expected generation
        of
        cash from existing operations, will only be sufficient to fund its anticipated
        operations through the second quarter of fiscal 2008. Consequently, the Company
        will need to raise additional debt and/or equity capital in order to finance
        its
        business plan and needs for working capital. Such financing(s), if available,
        may increase the risk of the Company not being able to service its debt
        obligations, and/or cause dilution to existing equity holders. The
        accompanying unaudited condensed consolidated financial statements do not
        include any adjustments to reflect the possible future effects on the
        recoverability and classification of assets and liabilities that might result
        from the outcome of this uncertainty.
  *Segment
          Information*
 Statement
          of Financial Accounting Standards (“SFAS”), No. 131, “Disclosures about Segments
          of an Enterprise and Related Information” establishes standards for reporting
          information regarding operating segments in annual financial statements
          and
          requires selected information for those segments to be presented in interim
          financial reports issued to stockholders. SFAS No. 131 also establishes
          standards for related disclosures about products and services and geographic
          areas. Operating segments are identified as components of an enterprise
          about
          which separate discrete financial information is available for evaluation
          by the
          chief operating decision maker, or decision-making group, in making decisions
          regarding the allocation of resources and asset performance. The information
          disclosed herein materially represents all of the financial information
          related
          to the Company's principal operating segment.
 
 *Revenue
          Recognition and Deferred Revenue*
 Revenues
          are
          recognized in the period that services are provided.  For revenue from
          product sales, the Company recognizes revenue in accordance with Staff
          Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” ("SAB No. 104"),
          which superseded SAB No. 101, "Revenue Recognition in Financial Statements"
          ("SAB No. 101"). SAB No. 104 requires that four basic criteria must be
          met
          before revenue can be recognized: (1) persuasive evidence of an arrangement
          exists; (2) delivery has occurred; (3) the selling price is fixed and
          determinable; and (4) collectibility is reasonably assured. Determination
          of
          criteria (3) and (4) are based on management's judgments regarding the
          fixed
          nature of the selling prices of the products delivered and the collectibility
          of
          those amounts. Provisions for discounts and rebates to customers, estimated
          returns and allowances, and other adjustments are provided for in the same
          period the related sales are recorded. The Company defers any revenue for
          which
          the product has not been delivered or for which services have not been
          rendered
          or are subject to refund until such time that the Company and the customer
          jointly determine that the product has been delivered or services have
          been
          rendered or no refund will be required.
  5
 Table
            of Contents
 
 **NEXTPHASE
        WIRELESS, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
   NOTE
        1-NATURE OF OPERATIONS AND SUMMARY OF
        SIGNIFICANT ACCOUNTING POLICIES, continued
 
 SAB
          No.
          104 incorporates Emerging Issues Task Force Issue (“EITF”) No.00-21,
“Deliverable Revenue Arrangements.” EITF No. 00-21 addresses accounting for
          arrangements that may involve the delivery or performance of multiple products,
          services and/or rights to use assets. The effect of implementing EITF No.
          00-21,
          on the Company's unaudited condensed consolidated financial position and
          results
          of operations was not significant.
 
 The
        Company considers amounts to be earned once evidence of an arrangement has
        been
        obtained, services are delivered, fees are fixed or determinable, and
        collectibility is reasonably assured.  The Company generates and
        recognizes revenue as follows:
 
 Revenue
        from operating as a wireless Internet service provider of tiered wireless
        Internet services to business and residential subscribers:  Internet
        services are billed at the beginning of each month's activity at a fixed
        rate
        for each customer.  Customers sign an annual agreement or utilize the
        service on a month-to-month basis.  Revenue not yet earned is recorded
        as deferred revenue.
 
 Revenue
        from the sale and configuration of wireless equipment:  NextPhase acts
        as a reseller of certain components and equipment related to its products
        and
        services.  Equipment revenue is recognized at the time of shipment FOB
        to the customer.  Configuration is billed at an hourly rate and
        recognized after completion. Costs associated with the equipment are expensed
        at
        the time of shipment.  In order to maximize the Company’s cash flows,
        revenue from the sale and configuration of wireless equipment is sometimes
        billed in advance of shipment. In such cases, these invoices are recorded
        as
        deferred revenue.
 
 Revenue
        from professional and consulting services provided by its
        staff:  These services include wireless network consulting,
        interference surveys, network management and telephone
        consulting.  Revenue is recognized after the professional or
        consulting service has been provided. In order to maximize the Company’s cash
        flows, revenue from professional services is sometimes billed in advance
        of
        project completion. In such cases, these invoices are recorded as deferred
        revenue.
 
 *Business
        Combinations*
 In
        accordance with SFAS No. 141,  “Business Combinations,” the Company
        allocates the purchase price of acquired entities to the tangible and intangible
        assets acquired and liabilities assumed, based on their estimated fair
        values.  Such a valuation requires management to make significant
        estimates and assumptions, especially with respect to intangible
        assets.
 
 Management
        makes estimates of fair values based upon assumptions believed to be reasonable.
        These estimates are based on historical experience and information obtained
        from
        the management of the acquired companies. Critical estimates in valuing certain
        of the intangible assets include but are not limited to: future expected
        cash
        flows from revenues, customer relationships, key management and market position,
        assumptions about the period of time the acquired trade names will continue
        to
        be used in the Company's combined product portfolio, and discount rates used
        to
        establish fair value. These estimates are inherently uncertain and
        unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated
        events and circumstances may occur which may affect the accuracy or validity
        of
        such assumptions, estimates or actual results.
 
 *Goodwill
        and Other Intangible Assets*
 The
        Company has adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS
        No. 142 requires that goodwill and intangible assets deemed to have indefinite
        lives are no longer amortized but are subject to an annual impairment test
        which
        has two steps to determine whether an asset impairment exists. The first
        step of
        the impairment test identifies potential impairment by comparing the fair
        value
        with the carrying amount of the reporting unit, including goodwill. If the
        carrying amount of the reporting unit exceeds its fair value, the second
        step of
        the impairment test shall be performed to measure the amount of the impairment
        loss, if any. Intangibles with indefinite useful lives are measured for
        impairment by the amount that the carrying value exceeds the estimated fair
        value of the intangible. The fair value is calculated using the income approach.
        Intangible assets with definite useful lives will continue to be amortized
        over
        their estimated useful lives. Any impairment is recorded at the date of
        determination.
  The
          Company’s policy provides for annual evaluation of goodwill on the first day of
          the fourth fiscal quarter and whenever events and changes in circumstances
          suggest that the carrying amount may not be recoverable. Impairment of
          goodwill
          is tested at the reporting unit level by comparing the reporting unit's
          net
          carrying value, including goodwill, to the fair value of the reporting
          unit. The
          fair values of the Company’s reporting units are estimated using a
          combination of the income or discounted cash flows approach and the market
          approach, which uses comparable market data. If the carrying amount of
          the
          reporting unit exceeds its fair value, goodwill is potentially impaired
          and a
          second test would be performed to measure the amount of impairment loss,
          if
          any.
 6
 Table
            of Contents
  **NEXTPHASE
        WIRELESS, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
   **NOTE
        1-NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
        continued**
 
 *Beneficial
        Conversion Feature*
 The
        convertible feature of one of the Company’s convertible notes provided for a
        rate of conversion that was below market value (see Note 4). Such feature
        is normally characterized as a “beneficial conversion feature” (“BCF”). Pursuant
        to EITF No. 98-5, “Accounting for Convertible Securities with Beneficial
        Conversion Features or Contingently Adjustable Conversion Ratio” and EITF
        No. 00-27, “Application of EITF Issue No. 98-5 to Certain Convertible
        Instruments”, the estimated relative fair value of the BCF was recorded as a
        discount from the face amount of the convertible note. The Company amortized
        the
        discount using the effective interest method through the conversion of such
        instrument.
  *Recent
        Accounting Pronouncements*
 In
        July
        2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes” (“FIN No. 48”) which clarifies the accounting for uncertainty in
        income taxes recognized in the financial statements in accordance with SFAS
        No. 109, “Accounting for Income Taxes.” This pronouncement recommends a
        recognition threshold and measurement process for recording in the consolidated
        financial statements uncertain tax positions taken or expected to be taken
        in
        the Company’s tax return. FIN No. 48 also provides guidance on derecognition,
        classification, interest and penalties, accounting in interim periods and
        disclosure requirements for uncertain tax positions. The accounting provisions
        of FIN No. 48 were effective for the Company beginning April 1,
        2007.
  *Basic
        and Diluted Loss per Common Share*
 Basic
        loss per share is calculated by dividing net loss by the weighted average
        common
        shares outstanding during the period. Diluted net loss per share reflects
        the
        potential dilution to basic EPS that could occur upon conversion or exercise
        of
        securities, options or other such items to common shares using the treasury
        stock method, based upon the weighted average fair value of our common shares
        during the period.  During the three months ended June 30, 2007 and
        2006, the Company did not have any potentially dilutive securities and no
        common
        stock equivalents were considered in the calculation of the weighted average
        number of shares outstanding because they would be anti-dilutive.
  **NOTE
        2 - ACQUISITION**
 
 On
        April
        5, 2006, the Company, through its wholly-owned subsidiary SpeedFactory, acquired
        all of the assets of Synkronus excluding cash, pursuant to an asset purchase
        agreement dated March 29, 2006 between SpeedFactory and Synkronus. The assets
        acquired by SpeedFactory comprise Synkronus's Internet service and connectivity
        business operated by Synkronus under the name "SpeedFactory."
 
 The
        Company paid $1,500,000 in cash for the assets at closing. SpeedFactory did
        not
        assume any pre-closing liabilities from Synkronus. The amount of $1,200,000
        was
        delivered to the seller on April 7, 2006 and the closing documents were released
        from escrow on that date. The amount of $300,000 was delivered to escrow
        on
        April 7, 2006, pending resolution of certain elements of the transaction,
        which
        were resolved in May 2007.  There were no acquisition related expenses
        incurred.  The closing was effective as of April 5, 2006.
 
 NextPhase
        borrowed $1,500,000 to fund the purchase price from a private lender (see
        Note
        4). This borrowing was secured by substantially all the assets of the
        Company.
  The
        acquisition of Synkronus was accounted for using the purchase method in
        accordance with SFAS No. 141. The results of operations for Synkronus have
        been
        included in the condensed consolidated Statements of Operations since the
        date
        of acquisition.
  In
        accordance with SFAS No. 141, the total purchase price was allocated to the
        estimated fair value of assets acquired and liabilities assumed. The fair
        value
        of the assets acquired was based on management's best estimates and independent
        third party appraisal. The Company has made an allocation of the purchase
        price
        to the Synkronus assets at estimated fair values.  The purchase price
        was allocated to the fair value of assets acquired as follows:
  **Amount**
              
              **Estimated
                  Lives**Computers
                    and related equipment
              $
              100,000
              
              3
                    yearsCustomer
                    lists
              
              980,000
              
              5
                    yearsTrademarks
              
              100,000
              
              indefiniteSupply
                    contracts
              
              60,000
              
              5
                    yearsGoodwill
              
              260,000
              
              indefinite$
              1,500,000
 
 The
        trademarks are deemed to have an indefinite life and, accordingly, are not
        being
        amortized, but will be subject to periodic impairment testing at future periods
        in accordance with SFAS No. 142. The customer lists and supply contracts
        will be
        amortized based on estimated weighted cash flows over their lives. Amortization
        expense for the three months ended June 30, 2007 and 2006 was $52,000 and
        $69,000, respectively.
 
  7
 Table
            of Contents
  **NEXTPHASE
        WIRELESS, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
  
 **NOTE
        3 - RELATED PARTY TRANSACTIONS**
  **For
        the Three Months Ended June 30, 2006**
 
 The
        Company made principal payments in the amount of $9,100 on a note payable
        to an
        ex-Company  officer.  Principal in the amount of $0 remained
        outstanding under this note at June 30, 2006.
 
 The
        Company issued an aggregate of 240,000 shares of common stock valued at $60,000
        to two officers in lieu of cash salary during the three months ended March
        31,
        2006.  The value of these shares was accrued during the three months
        ended March 31, 2006.
 
 The
        Company issued an aggregate of 900,000 shares of common stock valued at $126,000
        to two officers as a bonus for the year ended March 31, 2006. The value of
        these
        shares was accrued during the three months ended March 31, 2006.
 
 The
        Company's chairman personally guaranteed payment on a note from the Company
        to a
        lender in the amount of $50,650 with regard to the acquisition of a Company
        vehicle.
 
 **For
        the Three Months Ended June 30, 2007**
  In
        June
        2007, the Company and its former chairman entered into a settlement agreement
        whereby the former chairman forgave notes payable and accrued expenses in
        the
        aggregate amount of $96,291, which was recorded in legal settlements-net
        in the
        accompanying unaudited condensed consolidated statements of
        operations.
   8
 Table
            of Contents
   **NEXTPHASE
        WIRELESS, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
  **NOTE
        4 – NOTES PAYABLE AND CAPITAL LEASE**
  At
                  June 30, 2007 notes payable and capital leases consisted of the
                  following:**Total**
              
              
              **Current**
              
              
              **Long-Term**Secured
                    convertible note payable, interest at 6%, due April
                    2008
              
              $
              2,300,000
              
              
              $
              2,300,000
              
              
              $
              -Less
                  discount
              
              
              (26,246
              )
              
              
              (26,246
              )
              
              
              -Convertible
                    notes, interest at 7%, due between December 2007 and June
                    2008
              
              
              540,000
              
              
              
              540,000
              
              
              
              -Automobile
                  loan, interest at 5.9%, $924 monthly, due May 2011
              
              
              38,733
              
              
              
              8,963
              
              
              
              29,7702,852,487
              
              
              
              2,822,717
              
              
              
              29,770Capital
                  lease, $360 per month, due April 2009
              
              
              7,065
              
              
              
              3,570
              
              
              
              3,495$
              2,859,552
              
              
              $
              2,826,287
              
              
              $
              33,265Advance
                    payable on demand, interest at 9%
              
              $
              100,000
              
              
              $
              100,000
              
              
              $
              -
  The
        convertible note payable in the amount of $2,300,000 is dated March 31, 2006
        and
        is fully secured by all the assets of the Company. It was deemed effective
        at
        the date upon when the cash was received by Synkronus on behalf of the Company,
        or April 7, 2006. The note bears interest at the rate of 6% per annum, and
        is
        due in full on April 1, 2008. Upon maturity, the note and accrued interest
        are
        convertible into common stock of the Company at the lower of the fair market
        value of the Company's common stock at the date of conversion or $0.33 per
        share. The minimum price at which the note and accrued interest may convert
        is
        $0.15 per share. The Company determined the value of the embedded beneficial
        conversion feature of this note payable at the time of issuance to be $69,697,
        which is considered a discount to the note. The Company is amortizing the
        discount over the life of the note and charged $8,844 and $8,075 to interest
        expense for the three months ended June 30, 2007 and 2006,
        respectively.
 
 During
        the year ended March 31, 2007, the Company issued 11 convertible notes totaling
        $390,000, with an interest rate of 7%, and all maturing in one year from
        the
        date of issuance. The maturity dates of the notes are between December 2007
        and
        March 2008. As a stipulation, when the Company’s common stock reaches $0.20 or
        above for a period of 10 consecutive days, the principal and accrued interest
        due under the note will convert into common stock of the Company at a rate
        of
        $0.15 per share. In accordance with the convertible notes payable agreements,
        if
        the notes were convertible as of June 30, 2007, the Company would have recorded
        a debt discount related to the beneficial conversion features of approximately
        $97,000.
 
 During
        the three months ended June 30, 2007, the Company issued 2 convertible notes
        totaling $150,000, with an interest rate of 7%, and all maturing in one year
        from the date of issuance with a stipulation when the Company’s common stock
        reaches $0.30 or above for a period of 10 consecutive days, the principal
        and
        accrued interest due under the note will convert into common stock of the
        Company at a rate of $0.15 per share.  If  the
        notes were convertible at June 30, 2007, the Company would have recorded
        a debt
        discount of $75,000. 
If
        the
        stock does not reach $0.30 or above for ten consecutive days, the notes are
        not convertible.
 
 In
        June
        2007, the Company’s and its former chairman, entered into a settlement agreement
        whereby the former chairman forgave notes payable in the amount of
        $63,000  and accrued expenses in the aggregate amount of $33,291,
        which was recorded as a gain on legal settlement.
  **NOTE
        5 – EQUITY**
  *Common
        Stock*
 The
        Company had the following common stock transactions during three
        months ended June 30, 2006:
 
 The  Company  issued  350,921  shares  of
        common  stock  valued  at  $82,457  to consultants
        and employees for services.
 
 The  Company  issued  1,491,229  shares
        of common  stock  valued at  $263,456
        to consultants and employees for services  performed in a prior
        period. The cost of these services was accrued during the year ended March
        31, 2006.
 
 The  Company  issued  125,462  shares  of
        common  stock  valued  at  $37,639  in satisfaction
        of certain accounts payable.
 
 The  Company  issued  50,000  shares  of
        common  stock  valued  at  $25,000  for subscriptions
        payable.
 
 The
        Company issued 40,000 shares of common stock valued at
        $20,000  pursuant to the terms of a legal
        settlement.
 
 The
        Company cancelled 120,625 shares of common stock received by the
        Company during the
        twelve  months  ended  March 31,
        2005  pursuant  to a
        stock  purchase agreement.  Upon
        cancellation,  the Company credited  additional paid-in
        capital with the par value of these Shares, or $120.
 
 The
        Company received for cancellation 1,000,000 shares of common stock valued
        at $250,000  pursuant to the terms of a
        legal  settlement from a prior period.  The value of
        these shares was charged to stock cancellation  receivable in the
        prior period.
 
 The  Company   charged  to   operations   the  amount  of  $26,142  of  deferred compensation.
 
 The
        Company recorded a discount related to the beneficial  conversion
        feature of a note  payable in the amount of $69,697 and
        charged  this amount to  additional paid-in
        capital.
 
 For
        the
        three months ended June 30, 2007 the Company issued 330,000 shares for
        payment of a consulting agreement in the amount of $29,700 which was recorded
        as
        an accrued liability at March 31, 2007; 560,000 shares for a settlement of
        a
        lawsuit in the amount of $78,400 and recorded as an accrued liability at
        March
        31, 2007 and 1,000,000 shares valued at $130,000 for consulting
        services.
 
 There
        were no warrants issued, exercised or cancelled/expired during the three
        months
        ended June 30, 2007.
  
 9
 Table
            of Contents
 
  **NEXTPHASE
        WIRELESS, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **June
        30, 2007**
 **(Unaudited)**
  **NOTE
            6 – SUBSEQUENT EVENTS**
 
 In
            July
            2007, the Company issued convertible notes totaling $210,000, with interest
            at
            7%, and all due in one year from the date of issuance.  When the
            Company’s common stock reaches $0.30 or above for a period of 10 consecutive
            days, the principal and accrued interest due under the note will convert
            into
            common stock of the Company at a rate of $0.15 per share.
 
 On
            July
            1, 2007, the Company entered into a one year agreement with Elite Financial
            Communications Group, Inc, LLC for market relations support. In connection
            with
            the agreement the Company granted options to purchase common stock of
            the
            Company at prices ranging from $0.20 to $0.35 per share, the value of
            which was
            $32,000.
 
 On
            July
            13, 2007, the Company issued a convertible promissory note for $85,920
            for
            accrued liabilities of the same amount.  The note is due in one year
            with interest at 7% and is convertible at $0.15 per share into the Company’s
            common stock at the holder’s option.  This note and accrued interest
            was converted into 577,366 shares of the Company’s common stock on August 22,
            2007.
 
 On
            July
            13, 2007, the Company issued a convertible promissory note for $75,000
            for
            payment of accounts payable of $142,229.  The note is due in one year
            with interest at 7% and is convertible at $0.15 per share into the Company’s
            common stock at the holder’s option.  The Company was noted of the
            holder’s intent to convert on August 21, 2007, which would convert into 504,667
            shares of the Company’s common stock effective August 31, 2007.
 
 On
            July
            18, 2007, the Company issued 645,417 shares of its common stock for payment
            of
            accrued interest at June 30, 2007 in the amount of $78,908.
 
 On
            July
            22, 2007, the Company completed the acquisition of the purchase of Interactive
            Network Services Inc. (“INS”), upon the execution on that date of an Asset
            Purchase Agreement (the “Asset Purchase Agreement”), by and between
            Interactive-III Acquisition Co., Inc. (“INS Acquisition Co.”), a Nevada
            corporation and wholly-owned subsidiary of SpeedFactory, Inc., a Nevada
            corporation, a wholly-owned subsidiary of the Company, and INS.  The
            Company paid $350,000 for the acquisition. The Company has not made an
            allocation of the purchase price. The Company was advanced $275,000 from
            its
            secured debt holder to complete the transaction.
 
 On
            July
            23, 2007, the Company entered into a consulting agreement with Nicholas
            J. Yocca
            for business advisory services for a one year period for the issuance
            of
            1,000,000 shares of common stock valued at $170,000.
 
 In
            July
            2007, a previous legal settlement was adjusted by a stipulated judgment
            increasing the agreement by $22,223 for a total due of $67,223 which
            was
            recorded in accounts payable at June 30, 2007.
 
 In
            August
            2007, the Company issued convertible notes totaling $135,000 with interest
            at
            7%, and all due in one year from the date of issuance.  When the
            Company’s common stock reaches $0.30 or above for a period of 10 consecutive
            days, the principal and accrued interest due under the note will convert
            into
            common stock of the Company at a rate of $0.15 per share.
 
 On
            August
            23, 2007, the Company entered into a consulting agreement for business
            advisory
            services for a one year period for the issuance of 550,000 shares of
            common
            stock valued at $121,000.
 **Forward
        Looking Statements**
 
 Certain
        information contained in this report may include "forward-looking statements"
        within the meaning of the Private Securities Litigation Reform Act of 1995,
        and
        is subject to the safe harbor created by that act. The safe harbor created
        by
        the Securities Litigation Reform Act will not apply to certain "forward looking
        statements" because we issued "penny stock" (as defined in Section 3(a) (51)
        of
        the Securities Exchange Act of 1934 and Rule 3a51-1 under the Exchange Act)
        during the three year period preceding the date(s) on which those forward
        looking statements were first made, except to the extent otherwise specifically
        provided by rule, regulation or order of the Securities and Exchange Commission.
        We caution readers that certain important factors may affect our actual results
        and could cause such results to differ materially from any forward-looking
        statements which may be deemed to have been made in this Report or which
        are
        otherwise made by or on behalf of us. For this purpose, any statements contained
        in this report that are not statements of historical fact may be deemed to
        be
        forward-looking statements. Without limiting the generality of the foregoing,
        words such as "may", "will", "expect", "believe", "explore", "consider",
        "anticipate", "intend", "could", "estimate", "plan", "propose", "seem", "hope"
        or "continue" or the negative variations of those words or comparable
        terminology are intended to identify forward-looking statements. Factors
        that
        may affect our results include, but are not limited to, the risks and
        uncertainties associated with:
 ·
                our
                    ability to raise capital necessary to sustain our anticipated
                    operations
                    and implement our proposed business
                    plan,
 
 ·
                our
                    ability to implement our proposed business
                    plan,
 
 ·
                the
                    ability to successfully integrate the operations of businesses
                    we have
                    acquired, or may acquire in the future, into our
                    operations,
 
 ·
                our
                    ability to generate sufficient cash to pay our lenders and other
                    creditors,
 
 ·
                our
                    ability to obtain regulatory permits and approvals to operate
                    in the
                    high-speed wireless network
                    industry,
   10
 Table
              of Contents
  
 ·
                the
                    introduction of new broadband connectivity technologies by our
                    competitors
                    that may have advantages over our planned products and may make
                    our
                    planned products less attractive to our potential
                    customers,
 
 ·
                our
                    ability to identify and complete acquisitions and successfully
                    integrate
                    the businesses we acquire, if any,
 
 ·
                our
                    ability to employ and retain qualified management and
                    employees,
 
 ·
                our
                    dependence on the efforts and abilities of our current employees
                    and
                    executive officers,
 
 ·
                changes
                    in government regulations that are applicable to our anticipated
                    business,
 
 ·
                changes
                    in the demand for our services,
 
 ·
                the
                    degree and nature of our
                    competition,
 
 ·
                our
                    lack of diversification of our business
                    plan,
 
 ·
                the
                    general volatility of the capital markets and the establishment
                    of a
                    market for our shares, and
 
 ·
                disruption
                    in the economic and financial conditions primarily from the impact
                    of past
                    terrorist attacks in the United States, threats of future attacks,
                    police
                    and military activities overseas and other disruptive worldwide
                    political
                    events.
  We
          are
          also subject to other risks detailed from time to time in other SEC filings
          and
          elsewhere in this report. Any one or more of these uncertainties, risks
          and
          other influences could materially affect our results of operations and
          whether
          forward-looking statements made by us ultimately prove to be accurate.
          Our
          actual results, performance and achievements could differ materially from
          those
          expressed or implied in these forward-looking statements. We undertake
          no
          obligation to publicly update or revise any forward-looking statements,
          whether
          from new information, future events or otherwise.
 
 Management
          believes that cash on hand and cash generated from operations may be
          insufficient to fund its current or planned operating needs, and the Company
          currently has insufficient revenue to fund its operations. The Company
          plans on
          funding working capital requirements, necessary equipment purchases, marketing
          costs, and all other operations for the next quarter and foreseeable future
          by
          raising capital with the sale of equity and/or debt securities.
  **Financial
          Statement Overview**
 
 *Nature
          of Operations*
 NextPhase
          was incorporated on August 28, 1995 in Nevada under the name of Professional
          Mining Consultants, Inc.
 
 Effective
          April 5, 2006, through its wholly-owned subsidiary SpeedFactory. NextPhase
          acquired the internet service and connectivity business assets previously
          operated by Synkronus. under the name "SpeedFactory". Management's plans
          are
          discussed further in the Going Concern portion of Note 1.
 
 Prior
          to
          the acquisition of SpeedFactory, the Company has a limited operating history
          with revenue-generating products and services only recently entering the
          market.
          The consolidated financial statements include the accounts of the Company
          and
          its wholly-owned subsidiaries, NTI and SpeedFactory.  NTI
          was engaged in the development of a web-based software
          product, the development of which has been abandoned.  The
          costs of the development were paid by its then parent
          company.  NextPhase had no operations prior to the reverse
          acquisition.  Management’s plans are discussed further in the Going
          Concern portion of Note 1 of the consolidated financial statements. On
          January
          21, 2005 the Company changed its name from Edison Renewables, Inc. to NextPhase
          Wireless, Inc.
 
 Effective
          October 1, 2006, all revenue generating activity was combined with SpeedFactory.
          With the acquisition of SpeedFactory, we have enhanced our position as
          a
          nationwide provider of scalable, reliable and cost effective connectivity
          solutions, expanding our portfolio of products and services to include
          DSL, T1s,
          co-location and web hosting. We continue to extend our wireless “footprint” in
          Southern California, through a combination of organic growth and acquisitions,
          we have continued to add small to medium business subscribers, small office/home
          office (SOHO) subscribers, and residential subscribers in underserved markets
          to
          our network.
 
 
 11
 Table
              of Contents
 
 **RESULTS
          OF OPERATIONS**
 
 For
          the
          three months ended June 30, 2007, revenue was $480,989 as compared with
          $521,278
          with the same period in the previous year.  The reduction was due to
          no sales of products or consulting services in the three months ended June
          30,
          2007 as compared with $76,615 in the same period for the previous
          year.  Internet fees increased $42,960 or 9.6% for the three months
          ended June 30, 2007 as compared with the same period in the previous
          year.
 
 Cost
          of
          revenue was $236,920 or 49.3% of revenue for the three months ended June
          30,
          2007, compared to $310,276 or 59.5% during the three months ended June 30,
          2006. The 2006 results included a loss on product sales of $29,812 which
          increased the total cost of revenue.As
          a result,gross profit increased to $244,069 or 15.7% for the three months
          ended
          June 30, 2007 as compared with $211,022 for the same period in the previous
          year.
 
 Selling,
          general, and administrative expenses were $551,034 for the three months
          ended June 30, 2007 as compared with $490,196 for the three months ended
          June
          30, 2006, an increase of $60,838 or approximately 12.4%. The increase was
          due to increased staffing for growth which resulted in increased salaries
          of
          $84,593 in the three months ended June 30, 2007.  This was offset by
          lower professional fees in the amount $17,576 due to $30,000 legal fees
          incurred
          in the three months ended June 30, 2006 for the acquisition of
          SpeedFactory.  As a result, selling, general and administrative expenses
          represented 114.6% of revenue for the three months ended June 30, 2007
          versus
          94% in the same period in 2006.  The Company’s expenses will
          begin to reduce as a percentage of revenues as the Company follows its
          acquisition strategy.
 
 Stock-based
          compensation expense was $130,000 in the three months ended June 30, 2007
          as
          compared with $100,199 in the same period in the previous
          year.
 
 Depreciation
          expense for the three months ended June 30, 2007 and 2006 was $34,171 and
          $30,769, respectively. Amortization of the intangible assets acquired in
          the
          SpeedFactory acquisition was $52,000 and $69,000 for the three months ended
          June
          30, 2007 and 2006.
  The
          operating loss for the Company for the three months ended June 30, 2007
          was
          $523,136 versus $445,162 for the same period in the prior year.  This
          was an increase of $ 77,973, of which $50,203 of the increase was for non-cash
          items.  Legal settlement income was $74,069 during the three months
          ended June 30, 2007. The Company received a favorable settlement from its
          former
          chairman, which resulted in a gain in the amount of $96,291. This was
          partially offset by an increase in a previous settlement due to a stipulated
          judgment for $67,223 resulting in a charge of $22,223.   Net loss
          for the three months ended June 30, 2007 was $506,819 or $0.02 per shares
          as
          compared with a net loss of $498,846 or $0.02 per share for the three months
          ended June 30, 2006. Monthly operating cash losses are now
          approximately $75,000 per month.  Management expects this to
          continue to decline as the Company continues its acquisition strategy,
          with on
          closing in July and two additional companies in the 4th calendar
          quarter
          of 2007, two of which are expected to close in the quarter ended September
          30,
          2007.
 
 **Liquidity
          and Capital Resources**
 
 As
          of
          June 30, 2007, the Company had a cash balance of $6,960 and the Company's
          accumulated deficit was $9,138,529. The Company had negative working capital
          of
          $4,342,098.  Total liabilities were $4,510,076 which included accounts
          payable of $1,350,813, accrued expenses of $139,711, deferred revenue of
          $60,000
          and notes and advances payable of $2,959,552.  The Company’s cash used
          in operations  for the three months ended June 30, 2007 was $185,063
          and the Company currently is using $75,000 cash per month in
          operations.
 
 The
          Company has developed a plan to integrate additional ISPs in a scalable
          roll-up
          strategy.  The Company will acquire only profitable operations, both
          wireless and land based, which are synergistic to the Company’s current
          operations. The Company has entered into letters of intent to acquire two
          companies which would greatly reduce the negative cash flow on a monthly
          basis.
          The Company completed the first acquisition in July 2007 and the additional
          companies are scheduled for early fall 2007. Under its plans, management
          expects
          to generate positive operating cash flow during the fourth quarter of calendar
          2007. There is no assurance that management will achieve its plan. There
          is
          further no assurance that the proceeds from operating cash flows or future
          financings will be sufficient to obtain profitable operations. The acquisitions
          will be made by a cash purchase and there is no assurance that the Company
          will
          be able to raise the required capital through equity or debt
          offerings.
 
 The
          accompanying unaudited  condensed consolidated financial statements
          were prepared on a going concern basis, which contemplates the realization
          of
          assets and the settlement of liabilities in the normal course of business.
          The
          Company has incurred losses from operations and negative cash flows from
          operating activities from inception and has a working capital deficiency
          as of
          June 30, 2007 of $4,342,098. These factors raise substantial doubt about
          the
          Company’s ability to continue as a going concern. The Company has continued to
          issue short-term convertible notes with $345,000 being issued in July and
          August
          2007 and has an aggregate total of $885,000 which have a mandatory
          conversion at a rate of $0.15 per share when the Company’s stock price
          exceeds $0.20 to $0.30 per share or for a period of 10 consecutive days, at
          which time the principal and accrued interest due under the note will convert
          into common stock of the Company at for a ten-day period.  These notes
          would convert to 5,000,000 shares of stock. In April 2006, the Company
          obtained
          long-term financing of $1,500,000 in connection with the acquisition of
          SpeedFactory and has received additional advances including $275,000 in
          July
          2007 to complete the acquisition of INS.
  The
          Company has a convertible note payable in the amount of $2,300,000 which
          is due
          in full on April 1, 2008. Upon maturity, the note and accrued interest
          are
          convertible into common stock of the Company at the lower of the fair market
          value of the Company's common stock at the date of conversion or $0.33
          per
          share. The minimum price at which the note and accrued interest may convert
          is
          $0.15 per share.
   12
 Table
              of Contents
  NextPhase
          plans on continuing to fund working capital requirements, necessary equipment
          purchases, marketing costs, and other operations for the next year and
          foreseeable future by raising capital through the sale of equity and/or
          debt
          securities, issuing common stock in lieu of cash for services and by advances
          from shareholders.
 
 The
          Company expects that any sale of additional equity securities or convertible
          debt will result in additional dilution to our stockholders. The Company
          can
          give no assurance that it will be able to generate adequate funds from
          operations, that funds will be available to us from debt or equity financing,
          or
          that if available, the Company will be able to obtain such funds on favorable
          terms and conditions. If the Company cannot secure additional funds it
          will not
          be able to continue as a going concern. The Company currently has no definitive
          arrangements with respect to additional financing.
 
 By
          adjusting its operations and development to the level of capitalization,
          management believes it has sufficient capital resources to meet projected
          cash
          flow deficits through the next year. However, if thereafter, we are not
          successful in generating sufficient liquidity from operations or in raising
          sufficient capital resources, on terms acceptable to us, this could have
          a
          material adverse effect on our business, results of operations, liquidity
          and
          financial condition.
 
 The
          report of our independent registered public accounting firm on our March
          31, 2007 consolidated financial statements states that our recurring losses
          raise substantial doubt about our ability to continue as a going
          concern.
 
 **Off-Balance
          Sheet Arrangements**
 
 We
          have
          no 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 operation, liquidity, capital
          expenditures or capital resources that is material to investors.
 
 **Inflation**
 
 In
          the
          opinion of management, inflation has not had a material effect on the Company's
          financial condition or results of its operations
 
 **Critical
          Accounting Policies**
 
 Our
          consolidated financial statements are prepared in accordance with accounting
          principles generally accepted in the U.S., which requires us to make estimates
          and assumptions in certain circumstances that affect amounts reported.
          In
          preparing these financial statements, management has made its best estimates
          and
          judgments of certain amounts, giving due consideration to materiality.
          We
          believe that of our significant accounting policies (more fully described
          in
          notes to the consolidated financial statements), which are particularly
          important to the portrayal of our results of operations and financial position
          and may require the application of a higher level of judgment by our management,
          and as a result are subject to an inherent degree of uncertainty. While
          there
          are a number of accounting policies, methods and estimates affecting our
          unaudited condensed consolidated financial statements, areas that are
          particularly significant include:
  *Revenue
            Recognition and Deferred Revenue*
 Revenues
            are recognized in the period that services are provided.  For revenue
            from product sales, the Company recognizes revenue in accordance with
            Staff
            Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” ("SAB No. 104"),
            which superseded SAB No. 101, Revenue Recognition in Financial Statements
            ("SAB
            No. 101"). SAB No. 104 requires that four basic criteria must be met
            before
            revenue can be recognized: (1) persuasive evidence of an arrangement
            exists; (2)
            delivery has occurred; (3) the selling price is fixed and determinable;
            and (4)
            collectibility is reasonably assured. Determination of criteria (3) and
            (4) are
            based on management's judgments regarding the fixed nature of the selling
            prices
            of the products delivered and the collectibility of those amounts. Provisions
            for discounts and rebates to customers, estimated returns and allowances,
            and
            other adjustments are provided for in the same period the related sales
            are
            recorded. The Company defers any revenue for which the product has not
            been
            delivered or for which services have not been rendered or are subject
            to refund
            until such time that the Company and the customer jointly determine that
            the
            product has been delivered or services have been rendered or no refund
            will be
            required.
 
 SAB
            104
            incorporates Emerging Issues Task Force Issue (“EITF”)  No.00-21,
“Deliverable Revenue Arrangements.” EITF No. 00-21 addresses accounting for
            arrangements that may involve the delivery or performance of multiple
            products,
            services and/or rights to use assets. The effect of implementing EITF
            No. 00-21
            on the Company's consolidated financial position and results of operations
            was
            not significant.
  13
 Table
              of Contents
  
 The
          Company considers amounts to be earned once evidence of an arrangement
          has been
          obtained, services are delivered, fees are fixed or determinable, and
          collectibility is reasonably assured.  The Company generates and
          recognizes revenue as follows:
 
 Revenue
          from operating as a wireless Internet service provider of tiered wireless
          Internet services to business and residential subscribers:  Internet
          services are billed at the beginning of each month's activity at a fixed
          rate
          for each customer.  Customers sign an annual agreement or utilize the
          service on a month-to-month basis.  Revenue not yet earned is recorded
          as deferred revenue.
  Revenue
          from the sale and configuration of wireless equipment:  NextPhase acts
          as a reseller of certain components and equipment related to its products
          and
          services.  Equipment revenue is recognized at the time of shipment FOB
          to the customer.  Configuration is billed at an hourly rate and
          recognized after completion. Costs associated with the equipment are expensed
          at
          the time of shipment.  In order to maximize the Company’s cash flows,
          revenue from the sale and configuration of wireless equipment is sometimes
          billed in advance of shipment. In such cases, these invoices are recorded
          as
          deferred revenue.
 
 Revenue
          from professional and consulting services provided by its
          staff:  These services include wireless network consulting,
          interference surveys, network management and telephone
          consulting.  Revenue is recognized after the professional or
          consulting service has been provided. In order to maximize the Company’s cash
          flows, revenue from professional services is sometimes billed in advance
          of
          project completion. In such cases, these invoices are recorded as deferred
          revenue.
 
 *Long-Lived
          Assets*
 The
          Company reviews its fixed assets and certain identifiable intangibles for
          impairment whenever events or changes in circumstances indicate that the
          carrying amount of an asset may not be recoverable. The test for impairment
          is
          required to be performed by management at least annually. Recoverability
          of
          assets to be held and used is measured by a comparison of the carrying
          amount of
          an asset to the future undiscounted operating cash flow expected to be
          generated
          by the asset. If such assets are considered to be impaired, the impairment
          to be
          recognized is measured by the amount by which the carrying amount of the
          asset
          exceeds the fair value of the asset. Long-lived assets to be disposed of
          are
          reported at the lower of carrying amount or fair value less costs to
          sell.
 
 As
          of
          June 30, 2007, The Company’s management believes there is no impairment of its
          long-lived assets.  There can be no assurance, however, that market
          conditions will not change which could result in impairment of long-lived
          assets
          in the future.
 
 *Goodwill
            and Other Intangible Assets*
 The
            Company has adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS
            No. 142 requires that goodwill and intangible assets deemed to have indefinite
            lives are no longer amortized but are subject to an annual impairment
            test which
            has two steps to determine whether asset impairment exists. The first
            step of
            the impairment test identifies potential impairment by comparing the
            fair value
            with the carrying amount of the reporting unit, including goodwill. If
            the
            carrying amount of the reporting unit exceeds its fair value, the second
            step of
            the impairment test shall be performed to measure the amount of the impairment
            loss, if any. Intangibles with indefinite useful lives are measured for
            impairment by the amount that the carrying value exceeds the estimated
            fair
            value of the intangible. The fair value is calculated using the income
            approach.
            Intangible assets with definite useful lives will continue to be amortized
            over
            their estimated useful lives. Any impairment is recorded at the date
            of
            determination.
 
 The
            Company’s policy provides for annual evaluation of goodwill on the first day
            of
            the fourth fiscal quarter and whenever events and changes in circumstances
            suggest that the carrying amount may not be recoverable. Impairment of
            goodwill
            is tested at the operating segment level by comparing the segments' net
            carrying
            value, including goodwill, to the fair value of the segment. The fair
            values of
            our segments are estimated using a combination of the income or discounted
            cash
            flows approach and the market approach, which uses comparable market
            data. If
            the carrying amount of the segment exceeds its fair value, goodwill is
            potentially impaired and a second test would be performed to measure
            the amount
            of impairment loss, if any.
 14
 Table
              of Contents
  *Business
            Combinations*
 In
          accordance with SFAS No. 141,  “Business Combinations,” the Company
          allocates the purchase price of acquired entities to the tangible and intangible
          assets acquired and, liabilities assumed, based on their estimated fair
          values.  Such a valuation requires management to make significant
          estimates and assumptions, especially with respect to intangible
          assets.
 
 Management
          makes estimates of fair values based upon assumptions believed to be reasonable.
          These estimates are based on historical experience and information obtained
          from
          the management of the acquired companies. Critical estimates in valuing
          certain
          of the intangible assets include but are not limited to: future expected
          cash
          flows from revenues, customer relationships, key management and market
          position,
          assumptions about the period of time the acquired trade names will continue
          to
          be used in the Company's combined product portfolio, and discount rates
          used to
          establish fair value. These estimates are inherently uncertain and
          unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated
          events and circumstances may occur which may affect the accuracy or
          validity of such assumptions, estimates or actual results.
  *Beneficial
          Conversion Feature*
 The
          convertible feature of one of the Company’s convertible notes provided for a
          rate of conversion that was below market value (see Note 4). Such feature
          is normally characterized as a “beneficial conversion feature” (“BCF”). Pursuant
          to Emerging Issues Task Force (“EITF”) Issue No. 98-5, “Accounting for
          Convertible Securities with Beneficial Conversion Features or Contingently
          Adjustable Conversion Ratio” and EITF No. 00-27, “Application of EITF Issue
          No. 98-5 to Certain Convertible Instruments”, the estimated relative fair
          value of the BCF was recorded as a discount from the face amount of the
          convertible note. The Company amortized the discount using the effective
          interest method through the conversion of such instrument.
 
 *Income
          Taxes*
 The
          Company utilizes the liability method of accounting for income taxes as
          set
          forth in SFAS No. 109, “Accounting for Income Taxes” (“SFAS
          No. 109”). Under the liability method, deferred taxes are determined based
          on the temporary differences between the financial statement and tax bases
          of
          assets and liabilities using enacted tax rates. A valuation allowance is
          recorded when it is more likely than not that some of the deferred tax
          assets
          will not be realized. The Company also determines its tax contingencies
          in
          accordance with SFAS No. 5, “Accounting for Contingencies.” The
          Company records estimated tax liabilities to the extent the contingencies
          are
          probable and can be reasonably estimated.
 
 *Basic
          and Diluted Loss per Common Share*
 Basic
          loss per share is calculated by dividing net loss by the weighted average
          common
          shares outstanding during the period. Diluted net loss per share reflects
          the
          potential dilution to basic EPS that could occur upon conversion or exercise
          of
          securities, options or other such items to common shares using the treasury
          stock method, based upon the weighted average fair value of our common
          shares
          during the period.  During the three months ended June 30, 2007 and
          2006, the Company did not have any potentially dilutive securities and
          no common
          stock equivalents were considered in the calculation of the weighted average
          number of shares outstanding because they would be anti-dilutive.
  *Recent
            Accounting Pronouncements*
 In
              September 2006, the FASB issued SFAS No. 157 “Fair Value
              Measurements,”  to eliminate the diversity in practice that exists due
              to the different definitions of fair value and the limited guidance
              for applying
              those definitions in accounting principals generally accepted in the
              United
              States of America that are dispersed among the many accounting pronouncements
              that require fair value measurements. SFAS No. 157 retains the exchange
              price
              notion in earlier definitions of fair value, but clarifies that the
              exchange
              price is the price in an orderly transaction between market participants
              to sell
              an asset or liability in the principal or most advantageous market
              for the asset
              or liability. Moreover, SFAS No. 157 states that the transaction is
              hypothetical at the measurement date, considered from the perspective
              of the
              market participant who holds the asset or liability. Consequently,
              fair value is
              defined as the price that would be received to sell an asset or paid
              to transfer
              a liability in an orderly transaction between market participants at
              the
              measurement date (an exit price), as opposed to the price that would
              be paid to
              acquire the asset or received to assume the liability at the measurement
              date
              (an entry price).
  SFAS
              No.
              157 also stipulates that, as a market-based measurement, fair value
              measurement
              should be determined based on the assumptions that market participants
              would use
              in pricing the asset or liability, and establishes a fair value hierarchy
              that
              distinguishes between (a) market participant assumptions developed
              based on
              market data obtained from sources independent of the reporting entity
              (observable inputs) and (b) the reporting entity's own assumptions
              about market
              participant assumptions developed based on the best information available
              in the
              circumstances (unobservable inputs). Finally, SFAS No. 157 expands
              disclosures
              about the use of fair value to measure assets and liabilities in interim
              and
              annual periods subsequent to initial recognition. Entities are encouraged
              to
              combine the fair value information disclosed under SFAS No. 157 with
              the fair
              value information disclosed under other accounting pronouncements,
              including
              SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” where
              practicable. The guidance in this Statement applies for derivatives
              and other
              financial instruments measured at fair value under SFAS No. 133, “Accounting for
              Derivative Instruments and Hedging Activities,” at initial recognition and in
              all subsequent periods.
 
 SFAS
            No.
            157 is effective for financial statements issued for fiscal years beginning
            after November 15, 2007, and interim periods within those fiscal years,
            although
            earlier application is encouraged. Additionally, prospective application
            of the
            provisions of SFAS No. 157 is required as of the beginning of the fiscal
            year in
            which it is initially applied, except when certain circumstances require
            retrospective application. The Company is currently evaluating the effect
            of
            adopting SFAS No. 157 on its consolidated financial statements.
 
 SFAS
            No. 159 permits all entities to choose to measure eligible items at fair
            value
            at specified election dates. A business entity will report unrealized
            gains and
            losses on items for which the fair value option has been elected in earnings
            (or
            another performance indicator if the business entity does not report
            earnings)
            at each subsequent reporting date. The fair value option: ( *a* ) may be
            applied instrument by instrument, with a few exceptions, such as investments
            otherwise accounted for by the equity method; ( *b* ) is irrevocable
            (unless a new election date occurs); and ( *c* ) is applied only to
            entire instruments and not to portions of instruments. SFAS No. 159 is
            effective
            as of the beginning of an entity’s first fiscal year that begins after November
            15, 2007.  Early adoption is permitted as of the beginning of the previous
            fiscal year provided that the entity makes that choice in the first 120
            days of
            that fiscal year and also elects to apply the provisions of FASB Statement
            No.
            157, “Fair Value Measurements.” The adoption of this pronouncement is not
            expected to have material effect on the Company’s consolidated financial
            statements.
 
 *Risks
            and Uncertainties*
 The
            Company's operations are subject to new innovations in product design
            and
            function. Significant technological changes can have an adverse effect
            on the
            Company's future operating results. Design and development of new marketing
            strategies are important elements to achieve profitability in the Company's
            industries.
 15
 Table
              of Contents
   **ITEM3.
          CONTROLS AND PROCEDURES.**
  Disclosure
          controls and procedures are 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 Securities Exchange Act of 1934 is recorded, processed,
          summarized and reported, within the time periods specified in the Securities
          and
          Exchange Commission's rules and forms. Disclosure controls and procedures
          include, among other things, 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
          our
          principal executive and financial officers, as appropriate to allow timely
          decisions regarding required disclosure.
 
 Evaluation
          of Disclosure Controls and Procedures
 
 As
          of the
          end of the period covered by this Quarterly Report, we conducted an evaluation,
          under the supervision and with the participation of our Chief Executive
          Officer
          and principal financial officer, of our disclosure controls and procedures
          (as
          defined in Rule 13a-15(e) of the Exchange Act). Based on his evaluation,
          our
          Chief Executive Officer and principal financial officer concluded that
          our
          current system of disclosure controls and procedures was effective.
  There
          was
          no change in our internal control over financial reporting (as defined
          in Rule
          13a-15(f) of the Exchange Act) that occurred during the fiscal quarter
          to which
          this report relates that has materially affects, or is reasonable likely
          to
          materially affect, our internal control over financial reporting.
  **PARTII
          - OTHER INFORMATION**
  **ITEM
          1**: LEGAL PROCEEDINGS.
 
 None
 
 **ITEM
          2**: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
          PROCEEDS.
 
 None
 
 **ITEM
          3**: DEFAULTS UPON SENIOR SECURITIES.
 
 None.
 
 **ITEM
          4**. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None.
 
 **ITEM
          5**: OTHER INFORMATION.
 
 None.
 
 **ITEM
          6**. EXHIBITS
 
 **Exhibit
                    Number**
                
                **Description
                    of Exhibit**31.1
                
                Certification
                    of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    200231.2
                
                Certification
                    of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    200232
                
                Certification
                    of Chief Executive Officer and Chief Financial Officer pursuant
                    to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002
 
  16
 Table
              of Contents
 
 **SIGNATURES**
 
 In
          accordance with the requirements of the Securities and Exchange Act of
          1934, the
          Registrant has duly caused this report to be signed on its behalf by the
          undersigned, thereunto duly authorized.
   **NextPhase
                    Wireless, Inc.**August
                    30, 2007
                By**:**
                /s/ Robert
                    FordRobert
                    FordPresident
                    and Chief Executive Officer
 
  17
 Table
              of Contents