<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER: 0-49648

                          CONTINAN COMMUNICATIONS, INC.
                          -----------------------------
               (Exact Name of Company as Specified in its Charter)

             Nevada                                         73-1554122
   ------------------------------                       -------------------
  (State or Other Jurisdiction of                        (I.R.S. Employer
   Incorporation or Organization)                       Identification No.)

       11601 Wilshire Boulevard, Suite 2030, Los Angeles, California 90025
       -------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (310) 439-3119
                          ----------------------------
                          (Company's Telephone Number)


         --------------------------------------------------------------
              (Former Name, Former Address, and Former Fiscal Year,
                         if Changed Since Last Report)

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

      Indicate by check mark whether the Company is a shell company (as defined
in Rule 12b-2 of the Exchange Act): Yes ___ No _X_.

      As of April 1, 2007, the Company had 25,474,539 shares of common stock
issued and outstanding.

    Transitional Small Business Disclosure Format (check one): Yes ___ No _X_

<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              PAGE

     ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

              CONSOLIDATED BALANCE SHEETS AS OF
              MARCH 31, 2007 AND DECEMBER 31, 2006.............................3

              CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
              THREE MONTHS ENDED MARCH 31, 2007 AND MARCH 31, 2006.............4

              CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
              FOR THE THREE MONTHS ENDED MARCH 31, 2007........................5

              CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
              THREE MONTHS ENDED MARCH 31, 2007 AND MARCH 31, 2006.............6

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.......................7

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................27

     ITEM 3.  CONTROLS AND PROCEDURES.........................................39

PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS...............................................40

     ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND
              USE OF PROCEEDS.................................................40

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.................................41

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............41

     ITEM 5.  OTHER INFORMATION...............................................41

     ITEM 6.  EXHIBITS........................................................41

SIGNATURES....................................................................42


                                       2
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<S>                                                                             <C>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                          CONTINAN COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2007
                                   (UNAUDITED)


ASSETS

Current assets:
    Cash
    Other receivables                                              $      1,758
    Prepaid expense
                                                                   -------------
        Total current assets                                              1,758

Furniture and Equipment, net                                             33,959

Other Assets:
    Intangible assets, net                                               60,964
    Developed software, net                                             510,398
    Security deposit                                                      8,400
                                                                   -------------
        Total other assets                                              579,762
                                                                   -------------

              Total assets                                         $    615,479
                                                                   =============

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
    Accounts payable                                               $    365,350
    Accrued liabilities                                                  15,131
    Accrued interest on notes payable - related party                    54,376
    Accrued interest on notes payable                                    25,869
    Accrued management fees                                             200,718
    Current portion of capital leases                                     4,986
    Notes payable - related party                                       192,482
    Notes payable                                                       407,586
    Income tax payable                                                      800
    Liability for derivative instruments                                  2,151
                                                                   -------------
        Total current liabilities                                     1,269,449

Long term liabilities:
    Capital leases, net of current portion                                3,776

Shareholders' deficit:
    Preferred stock, par value of $0.001;
      10,000,000 shares authorized
      5,660 issued and outstanding                                            6
    Common stock; par value of $0.001;
      100,000,000 shares authorized
      25,732,172 issued and outstanding                                  25,733
    Additional paid in capital                                        6,277,907
    Deficit accumulated during the development stage                 (6,961,392)
                                                                   -------------
       Total shareholders' deficit                                     (657,746)
                                                                   -------------

             Total liabilities and shareholders' deficit           $    615,479
                                                                   =============


           See Accompanying Notes to Consolidated Financial Statements

                                       3
<PAGE>

                                            CONTINAN COMMUNICATIONS, INC.
                                            (A DEVELOPMENT STAGE COMPANY)
                                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     (UNAUDITED)


                                                                                                     PERIOD FROM
                                                        FOR THE THREE         FOR THE THREE       SEPTEMBER 16, 2002
                                                        MONTHS ENDED          MONTHS ENDED          (INCEPTION) TO
                                                       MARCH 31, 2007        MARCH 31, 2006         MARCH 31, 2007
                                                     ------------------    ------------------     ------------------

Revenues                                             $           1,242     $          27,451      $         131,112

Expenses:
  Direct costs                                                   1,212                74,343                370,569
  Selling expenses                                              11,533                62,761              1,661,644
  Depreciation and amortization                                 16,720                16,288                156,831
  General and administrative expenses                          262,608               216,252              3,834,151
                                                     ------------------    ------------------     ------------------
      Total Expenses                                           292,073               371,644              6,023,195

Other income (expenses), net:
  Interest expense                                             (15,868)               (7,593)              (222,596)
  Other expense                                                   (411)                   --                   (954)
  Loss on derivative instruments                                    --                    --               (841,821)
  Other income                                                      --                    --                     62
                                                     ------------------    ------------------     ------------------
      Total other income (expenses), net                       (16,279)               (7,593)            (1,065,309)
                                                     ------------------    ------------------     ------------------

Loss before provision for income taxes                        (307,110)             (351,786)            (6,957,392)

Provision for income taxes                                         800                   800                  4,000
                                                     ------------------    ------------------     ------------------

Net Loss                                             $        (307,910)    $        (352,586)     $      (6,961,392)
                                                     ==================    ==================     ==================

Net loss per common share - basic and diluted        $           (0.01)    $            0.00      $           (3.15)
                                                     ==================    ==================     ==================

Basic and diluted weighted average
  common shares outstanding (1)                             25,727,116                    --              2,208,689
                                                     ==================    ==================     ==================

(1) Adjusted for a 1 for 20 reverse split effective on December 1, 2006.


                             See Accompanying Notes to Consolidated Financial Statements

                                                          4
<PAGE>

                                                    CONTINAN COMMUNICATIONS, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                FOR THE PERIOD FROM SEPTEMBER 16, 2002 (INCEPTION) TO MARCH 31, 2007
                                                             (UNAUDITED)


                                                                                                           DEFICIT
                                                                                                          ACCUMULATED
                                                                                            ADDITIONAL    DURING THE       TOTAL
                                             PREFERRED STOCK            COMMON STOCK         PAID IN      DEVELOPMENT   SHAREHOLDERS
                                          ----------------------   ----------------------    CAPITAL         STAGE         EQUITY
                                             SHARES      AMOUNT       SHARES      AMOUNT    (RESTATED)     (RESTATED)     (DEFICIT)
                                          ------------  --------   ------------  --------  -------------  ------------  ------------

Balance at December 31, 2004                3,000,000   $ 3,000             --   $    --   $  2,123,608   $  (958,325)  $ 1,168,283
  Net loss                                         --        --             --        --             --    (1,053,248)   (1,053,248)
                                          ------------  --------   ------------  --------  -------------  ------------  ------------
Balance at September 30, 2005               3,000,000     3,000             --        --      2,123,608    (2,011,573)      115,035
    Net loss                                                                                                 (305,880)     (305,880)
                                          ------------  --------   ------------  --------  -------------  ------------  ------------
Balance at December 31, 2005                3,000,000     3,000             --        --      2,123,608    (2,317,453)     (190,845)
  Reverse acquisition, May 2006                    --        --    1,699,108(1)    1,699        971,820            --       973,519
  Stock options granted for consulting
    services                                       --        --             --        --         40,343            --        40,343
  Stock options granted to employees               --        --             --        --         33,619            --        33,619
  Stock options granted to management              --        --             --        --         58,273            --        58,273
  Stock options granted for finders fees           --        --             --        --         37,737            --        37,737
  Fees on reverse acquisition                      --        --             --        --        (37,737)           --       (37,737)
  Issue of common stock upon exercise of
    warrants                                       --        --        290,000       290           (290)           --            --
  Issue of common stock for consulting
    service                                        --        --        249,500       250        548,750            --       549,000
  Conversion of preferred stock to
    common stock                           (3,000,000)   (3,000)    20,250,000    20,250        (17,250)           --            --
  Conversion of notes payable to common
    stock - Rackgear Inc.                          --        --        210,914       211         63,063            --        63,274
  Conversion of accounts payable in the
    amount of $12,698 to common stock              --        --         22,650        23         12,675            --        12,698
  Conversion of notes payable to
    preferred stock - First Bridge Bank         5,510         6             --        --        550,951            --       550,957
  Conversion of notes payable to common
    stock - Kurt Hiete                             --        --        200,000       200         60,326            --        60,526
  Conversion of accounts payable in the
    amount of $34,865 to common stock              --        --         35,000        35         34,830            --        34,865
  Issue of common stock for consulting
    services                                       --        --      2,710,000     2,710      1,623,290            --     1,626,000
  Stock options granted for consulting
    services                                       --        --             --        --         48,846            --        48,846
  Stock options granted for consulting
    services                                       --        --             --        --        215,748            --       215,748
  Stock options granted to employees               --        --             --        --         93,236            --        93,236
  Transfer to derivative liability                 --        --             --        --       (307,516)           --      (307,516)
    Net loss                                       --        --             --        --             --    (4,336,029)   (4,336,029)
                                          ------------  --------   ------------  --------  -------------  ------------  ------------
Balance at December 31, 2006                    5,510         6     25,667,172    25,668      6,154,322    (6,653,482)     (473,486)
  Issuance of common stock for consulting
    services                                       --        --         65,000        65         33,085            --        33,150
  Conversion of note payable to preferred
    stock - First Bridge Capital                  150        --             --        --         15,000            --        15,000
  Stock options granted for consulting
    services                                       --        --             --        --         75,000            --        75,000
    Net loss                                       --        --             --        --             --      (307,910)     (307,910)
                                          ------------  --------   ------------  --------  -------------  ------------  ------------
                                                5,660   $     6     25,732,172   $25,733   $  6,277,907   $(6,961,392)  $  (657,746)
                                          ============  ========   ============  ========  =============  ============  ============

(1)  Adjusted for a 1 for 20 reverse split effective on December 1, 2006.


                                     See Accompanying Notes to Consolidated Financial Statements

                                                                 5
<PAGE>

                                            CONTINAN COMMUNICATIONS, INC.
                                            (A DEVELOPMENT STAGE COMPANY)
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (UNAUDITED)


                                                                                                     PERIOD FROM
                                                       FOR THE THREE         FOR THE THREE        SEPTEMBER 16, 2002
                                                        MONTHS ENDED          MONTHS ENDED          (INCEPTION) TO
                                                       MARCH 31, 2007        MARCH 31, 2006         MARCH 31, 2007
                                                     ------------------    ------------------     ------------------
Cash flows from operating activities:
  Net loss                                           $        (307,910)    $        (352,586)     $      (6,961,392)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                               16,720                16,288                156,830
    Stock compensation for consulting services and
      options granted to management and employees              108,650                    --              3,108,699
  (Increase) decrease in assets:
    Accounts receivable                                             --               (13,251)                    --
    Other receivables                                               --                    --                 (1,758)
    Security deposit                                                --                    --                 (8,400)
    Prepaid expenses                                               500                    --                     --
  Increase (decrease) in liabilities:
    Accounts payable                                           (82,182)              117,306                391,404
    Income tax payable                                             800                    --                    800
    Accrued liabilities                                        (79,247)               12,788                 14,340
    Accrued interest on notes payable - related party              128               (10,706)                51,434
    Accrued interest on notes payable                            6,189                 3,610                 28,811
    Accrued management fees                                     (1,763)               20,000                200,718
                                                     ------------------    ------------------     ------------------
      Net cash used in operating activities                   (338,115)             (206,551)            (3,018,514)

Cash flows from investing activities:
  Payment for intangible assets                                     --                    --               (101,369)
  Payment for software development costs                            --                    --               (411,567)
  Purchase of equipment                                         (2,759)                   --                (24,122)
                                                     ------------------    ------------------     ------------------
      Net cash used in investing activities                     (2,759)                   --               (537,058)

Cash flows from financing activities:
  Sale of common stock                                              --                65,000                247,500
  Borrowings on convertible note payable                        15,000                    --                 15,000
  Liability for derivative instruments                              --                    --                  2,151
  Payments on note payable-related party                        (1,176)                   --                 (8,004)
  Payments on notes payable                                         --                    --                 (7,400)
  Borrowings on notes payable - related party                                         43,122              2,646,423
  Borrowings on notes payable                                  320,000                83,884                680,986
  Payments on capital lease obligations                         (1,660)               (2,405)               (21,084)
                                                     ------------------    ------------------     ------------------
      Net cash provided by financing activities                332,164               189,601              3,555,572

(Decrease) increase in cash                                     (8,710)              (16,950)                    --

Cash, beginning of the period                                    8,710                25,539                     --
                                                     ------------------    ------------------     ------------------

Cash, end of the period                              $              --     $           8,589      $              --
                                                     ==================    ==================     ==================

Supplemental disclosures of cash flow information:
    Interest paid                                    $              --     $              --      $              --
                                                     ==================    ==================     ==================
    Income taxes paid                                $              --     $             800      $           3,200
                                                     ==================    ==================     ==================

Supplemental disclosures of non-cash investing
  and financing activities:
  Furniture and equipment acquired through
    exchange of stock                                $              --     $              --      $          30,250
                                                     ==================    ==================     ==================
  Developed software acquired through exchange
    of stock                                         $              --     $              --      $         165,000
                                                     ==================    ==================     ==================
  Conversion of note payable to preferred stock      $          15,000     $              --      $         565,957
                                                     ==================    ==================     ==================
  Conversion of notes payable and accrued interest
    into common stock                                $              --     $         339,357      $       2,281,515
                                                     ==================    ==================     ==================
  Conversion of accounts payable into common stock   $              --     $              --      $          47,563
                                                     ==================    ==================     ==================
  Purchase of equipment through capital leases       $              --     $              --      $          29,843
                                                     ==================    ==================     ==================
  Stock issued for consulting services               $              --     $              --      $          80,000
                                                     ==================    ==================     ==================
  Issue of common stock upon exercise of warrants    $              --     $              --      $           5,800
                                                     ==================    ==================     ==================


                             See Accompanying Notes to Consolidated Financial Statements

                                                          6
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<PAGE>

                          CONTINAN COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION

Texxon, Inc. ("Texxon") was incorporated on October 6, 1998, under the laws of
the state of Oklahoma. Since inception, the Company's primary focus was raising
capital and paying for the exclusive licenses. Pursuant to the Company's Share
Agreement with TelePlus, Inc., a California corporation ("TelePlus"), the
Company's focus is now centered on the development and marketing of wireless
networks and specific services for international travelers. The initial focus of
the Company will be to test market their product and work to obtain customers
through trials in smaller test markets and to find partners to aid in the cross
promotion of their products primarily in Europe, US, and Japan.

In May 2006, Texxon and the shareholders of TelePlus completed a Share Exchange
Agreement whereas the Company acquired all of the outstanding capital stock of
TelePlus from the TelePlus shareholders in exchange for 3,000,000 shares of
voting convertible preferred stock convertible into 81,000,000 shares of Company
common stock. This transaction constituted a change of control of the Company
whereby the majority of the shares of Texxon are now owed by the shareholders of
TelePlus. The accounting for this transaction is identical to that resulting
from a reverse-acquisition, except that no goodwill or other intangible assets
is recorded. As a result, the transaction was treated for accounting purposes as
a recapitalization by the accounting acquirer TelePlus. The historical financial
statements will be those of TelePlus. On November 22, 2006, Texxon, the Oklahoma
corporation, for the sole purpose of re-domestication in Nevada, filed Articles
of Merger with the Secretaries of state of the states of Oklahoma and Nevada
pursuant to which Texxon, the Oklahoma corporation, was merged with and into
Texxon, Inc., a Nevada corporation, with the Nevada corporation remaining as the
surviving entity. Immediately following the merger, the Nevada company changed
its name to Continan Communications, Inc. ("Company") and its articles of
incorporation were amended such that the number of common stock and preferred
stock is increased from 45,000,000 to 100,000,000 and from 5,000,000 to
10,000,000, respectively. On December 1, 2006, the Company executed a 1 for 20
reverse stock split of all its issued and outstanding shares of common stock.
Additionally, all convertible preferred stocks were converted into 20,250,000
shares of common stock.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION.

As a result of the Share Exchange Agreement, the Company acquired 100% of the
stock of TelePlus, Inc. and TelePlus has become a wholly owned subsidiary of the
Company. The consolidated financial statements include the accounts of the
parent and its subsidiary. All significant intercompany transactions have been
eliminated in the consolidation. TelePlus was incorporated in the State of
California on September 16, 2002.

                                       7
<PAGE>

The Company is in the development stage, as defined in Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises", with its principal activity being to leverage its
proprietary content management software to deliver life enhancing, language
specific, contents and services via a cellular phone.

CASH AND CASH EQUIVALENTS.

The Company defines cash and cash equivalents as short-term investments in
highly liquid debt instruments with original maturities of three months or less,
which are readily convertible to known amounts of cash.

USE OF ESTIMATES.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS.

Financial accounting standards require disclosure of the fair value of financial
instruments held by the Company. Fair value of financial instruments is
considered the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying amount of receivables,
accounts payable, and other liabilities included on the accompanying balance
sheet approximate their fair value due to their short-term nature.

FURNITURE AND EQUIPMENT.

Furniture and equipment are carried at cost and depreciation is computed over
the estimated useful lives of the individual assets ranging from 3 to 15 years.
The Company uses the straight-line method of depreciation.

The related cost and accumulated depreciation of assets retired or otherwise
disposed of are removed from the accounts and the resultant gain or loss is
reflected in earnings. Maintenance and repairs are expensed currently while
major renewals and betterments are capitalized.

INTANGIBLE ASSETS.

Intangible assets consist of patent application costs that relate to the
Company's U.S. patent application and consist primarily of legal fees, the
underlying test market studies and other direct fees. The recoverability of the
patent application costs is dependent upon, among other factors, the success of
the underlying technology.

DEVELOPED SOFTWARE.

Developed software is carried at the cost of development and amortization is
computed over the estimated useful life of the software that is currently 15
years. The Company uses the straight-line method of amortization.

                                       8
<PAGE>

IMPAIRMENT OF LONG-TERM ASSETS.

Long-term assets of the Company are reviewed annually as to whether their
carrying value has become impaired. Management considers assets to be impaired
if the carrying value exceeds the future projected cash flows from related
operations. Management also re-evaluates the periods of amortization to
determine whether subsequent events and circumstances warrant revised estimates
of useful lives. As of March 31, 2007 management expects these assets to be
fully recoverable.

INCOME TAXES.

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.

REVENUE RECOGNITION.

The Company recognizes revenues when it receives confirmation of the order and
the customer credit card has been debited and confirmed that customers have used
cellular phone minutes.

CAPITAL LEASES.

Assets held under capital leases are recorded at the lower of the net present
value of the minimum lease payments or the fair value of the leased asset at the
inception of the lease. Amortization expense is computed using the straight-line
method over the shorter of the estimated useful lives of the assets or the
period of the related lease.

STOCK BASED COMPENSATION.

The Company adopted SFAS No. 123 (Revised 2004), Share Based Payment ("SFAS No.
123R"). SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. SFAS No. 123R eliminates the ability to account
for the award of these instruments under the intrinsic value method prescribed
by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS No. 123.

                                       9
<PAGE>

EARNINGS PER SHARE.

SFAS No. 128, "Earnings Per Share," requires presentation of basic earnings per
share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). The
computation of basic earnings per share is computed by dividing income available
to common stockholders by the weighted-average number of outstanding common
shares during the period. Diluted earnings per share gives effect to all
dilutive potential common shares outstanding during the period. The computation
of diluted earnings per share does not assume conversion, exercise or contingent
exercise of securities that would have an anti-dilutive effect on losses. As all
dilutive securities have an antidilutive effect on 2007 and 2006 earnings per
share, the securities have been excluded from the earnings per share
calculation.

ACCOUNTING FOR OPTIONS AND WARRANTS.

During the period ended December 31, 2006, the Company issued warrants and
options to numerous consultants and investors for services and to raise capital.
During the period up until the recapitalization performed on December 1, 2006
(Note 1), the Company did not have sufficient authorized shares in order to
issue these options should they be exercised. Because of the lack of authorized
shares, the Company therefore needed to follow derivative accounting rules for
its accounting of options and warrants.

The Company accounted for options and warrants issued in connection with
financing arrangements in accordance with Emerging Issues Task Force ("EITF")
Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock." Pursuant to EITF 00-19, the
Company was to recognize a liability for derivative instruments on the balance
sheet to reflect the insufficient amounts of shares authorized, which would have
otherwise been classified into equity. An evaluation of specifically identified
conditions was then made to determine whether the fair value of warrants or
options issued was required to be classified as a derivative liability. The fair
value of warrants and options classified as derivative liabilities was adjusted
for changes in fair value at each reporting period, and the corresponding
non-cash gain or loss was recorded in the corresponding period earnings.

In December 2006, the Company completed a reincorporation by merger with
Texxon-Nevada, which, therefore, allowed the Company to increase its authorized
preferred and common shares from 5,000,000 to 10,000,000 shares and from
45,000,000 to 100,000,000 shares, respectively.

At the date of reincorporation, the Company recalculated the value of its
options and warrants at the current fair value, and recorded an increase to
equity and a decrease to derivative liabilities for the fair value of the
options and warrants. The difference between the liability and the recalculated
fair value was recorded as a gain or loss.

                                       10
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS.

In February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities-Including an amendment of FASB Statement No. 115." SFAS No. 159
permits companies to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at fair
value. The objective of SFAS No. 159 is to provide opportunities to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply hedge accounting provisions.
SFAS No. 159 also establishes presentation and disclosure requirements designed
to facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. SFAS No. 159 will be
effective in the first quarter of fiscal 2008. The Company is currently
evaluating the impact that this statement will have on its financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
which addresses the measurement of fair value by companies when they are
required to use a fair value measure for recognition or disclosure purposes
under GAAP. SFAS No. 157 provides a common definition of fair value to be used
throughout GAAP that is intended to make the measurement of fair value more
consistent and comparable and improve disclosures about those measures. SFAS No.
157 will be effective for an entity's financial statements issued for fiscal
years beginning after November 15, 2007. The Company is currently evaluating the
effect SFAS No. 157 will have on its consolidated financial position, liquidity,
or results of operations.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments," an amendment of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"), and SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
In this context, a hybrid financial instrument refers to certain derivatives
embedded in other financial instruments. Among other things, SFAS No. 155
permits fair value re-measurement of any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation under
SFAS No. 133. In addition, SFAS No. 155 establishes a requirement to evaluate
interests in securitized financial assets in order to identify interests that
are either freestanding derivatives or "hybrids" which contain an embedded
derivative requiring bifurcation. SFAS No. 155 also clarifies which
interest/principal strips are subject to SFAS No. 133, and provides that
concentrations of credit risk in the form of subordination are not embedded
derivatives. Lastly, SFAS No. 155 amends SFAS No. 140 to eliminate the
prohibition on a qualifying special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial interest other than another
derivative. When SFAS No. 155 is adopted, any difference between the total
carrying amount of the components of a bifurcated hybrid financial instrument
and the fair value of the combined "hybrid" must be recognized as a
cumulative-effect adjustment of beginning deficit/retained earnings. SFAS No.
155 is effective for all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006.
Earlier adoption is permitted only as of the beginning of a fiscal year,
provided that the entity has not yet issued any annual or interim financial
statements for such year. Restatement of prior periods is prohibited. Management
does not believe this pronouncement will have a significant impact on its future
financial statements.

                                       11
<PAGE>

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
No. 154 requires retrospective application to prior periods' financial
statements for changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. SFAS No. 154 also requires that retrospective application of a change in
accounting principle be limited to the direct effects of the change. Indirect
effects of a change in accounting principle, such as a change in
non-discretionary profit-sharing payments resulting from an accounting change,
should be recognized in the period of the accounting change. SFAS No. 154 also
requires that a change in depreciation, amortization, or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting
estimate affected by a change in accounting principle. SFAS No. 154 is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. The adoption of this Statement did not have a material
impact on its financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Interpretation ("FIN") No. 48, "Accounting
for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109".
FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized
in a company's financial statements in accordance with SFAS No. 109, "Accounting
for Income Taxes". FIN No. 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN No. 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. The requirements of FIN No. 48 are
effective for fiscal year beginning January 1, 2007; the Company does not expect
adoption of this new interpretation to have a material impact on its financial
position, results of operations or cash flows.

RECLASSIFICATIONS

Certain reclassifications have been made to the financial statements for the
three months ended March 31, 2006 to conform to the financial statement
presentation for the three months ended March 31, 2007. These reclassifications
had no effect on net loss as previously reported.

NOTE 3 - GOING CONCERN

The Company has no significant operating history and, from (inception) to March
31, 2007, has generated a net loss of $6,961,392. The accompanying financial
statements for the period ended March 31, 2007 have been prepared assuming the
Company will continue as a going concern. During the year 2006, management
completed a reverse merger with Texxon Inc. and intended to raise equity through
a private placement.

The accompanying financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result from the
possible inability of the Company to continue as a going concern.

                                       12
<PAGE>

NOTE 4 - FURNITURE AND EQUIPMENT

Furniture and equipment consisted of the following as of December 31, 2007 and
December 31, 2006:

                                                2007              2006
                                           --------------    --------------
        Furniture and fixtures             $      12,272     $      12,272

        Computers and equipment                   66,211            63,452
                                           --------------    --------------

            Total                                 78,483            75,724

        Less: accumulated depreciation           (44,524)          (40,597)
                                           --------------    --------------

        Machinery and equipment, net       $      33,959     $      35,127
                                           ==============    ==============

Depreciation expense amounted to $3,927 for the period ended March 31, 2007 and
$14,907 for the year ended December 31, 2006.

NOTE 5 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash in bank deposit accounts and the balances may
exceed federally insured limits from time to time. The Company has not
experienced any losses in such accounts and believes it is not exposed to any
significant risks on its cash in bank deposit accounts. As of March 31, 2007,
the Company did not have deposits in excess of federally insured limits.

NOTE 6 - DEVELOPED SOFTWARE

The Company has developed internal use software for the purpose of managing its
wireless network and specific services. The total capitalized cost of this
software at March 31, 2007 and December 31, 2006 was $576,568. Accumulated
amortization amounted to $66,170 and $56,587 as of March 31, 2007 and December
31, 2006, respectively. Amortization expense amounted to $9,583 for the periods
ended March 31, 2007 and March 31, 2006.

NOTE 7 - INTANGIBLE ASSETS

Intangible assets consisted of the following at March 31, 2007 and December 31,
2006:

                                                2007              2006
                                           --------------    --------------
        Patent application costs           $      60,982     $      60,982

        Website development costs                 40,908            40,908

        Network interconnection                    5,300             5,300
                                           --------------    --------------

            Total                                107,190           107,190

        Less: accumulated amortization           (46,226)          (43,016)
                                           --------------    --------------

        Intangible assets, net             $      60,964     $      64,174
                                           ==============    ==============

                                       13
<PAGE>

Amortization expense amounted to $3,210 for the three months ended March 31,
2007 and $4,425 for the three months ended March 31, 2006.

NOTE 8 - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial statement
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at March 31, 2007 are as
follows:

        Deferred tax asset
          Federal net operating loss              $ 2,306,469

          State net operating loss                    406,127
                                                  ------------

            Total deferred tax asset                2,712,596

        Less valuation allowance                   (2,712,596)
                                                  ------------

            Deferred tax asset, net               $        --
                                                  ============

At March 31, 2007 and December 31, 2006, the Company had federal and state net
operating loss ("NOL") carryforwards of approximately $13,552,507 and
$9,244,405, respectively. Federal NOLs could, if unused, expire in 2023. State
NOLs, if unused, could expire in 2013.

The Company has provided a 100% valuation allowance on the deferred tax assets
at March 31, 2007 and December 31, 2006 to reduce such asset to zero, since
there is no assurance that the Company will generate future taxable income to
utilize such asset. Management will review this valuation allowance requirement
periodically and make adjustments as warranted.

The reconciliation of the effective income tax rate to the federal statutory
rate for the periods ended March 31, 2007 and December 31, 2006, are as follows:

                                                  2007              2006
                                             --------------    --------------
     U. S. Federal Statutory rate                 34.0%             34.0%

     State tax rate, net of federal benefit        6.0               6.0

     Less valuation allowance                    (40.0)            (40.0)
                                             --------------    --------------

     Effective income tax rate                      -- %              -- %
                                             ==============    ==============


                                       14
<PAGE>

NOTE 9 - RELATED PARTY TRANSACTIONS

NOTES PAYABLE.

The Company has received loans from related parties. These related parties
consist of various members of management who are also shareholders. The related
parties also consist of an employee, a relative of the CEO, and a shareholder of
the Company. As of March 31, 2007 and December 31, 2006, the Company had loans
due to related parties of $192,482 and $193,658, respectively. Loans due to
related parties consisted of the following:

                                                     2007             2006
                                                --------------   --------------
Promissory note issued to Claude Buchert, CEO
and major shareholder, on December 30, 2004
with interest of 10%. Principal along with
accrued interest are due on or before June
30, 2005.                                       $       4,762    $       5,209

Promissory note issued to Edward Shirley,
relative of Vice President, on February 23,
2004 with Interest of 10% and principal
installments of $340 to be made monthly,
beginning July 1, 2004 with the remaining
principal balance and accrued interest due on
December 31, 2004.                                     30,000           30,000

Promissory notes issued to Humax West, Inc.,
shareholder, on various dates between January
26, 2006 and February 16, 2006 with interest
of 10%. Principal along with accrued interest
are payable on the maturity date March 30,
2006. The amount due in 2005 contain options
for the Holder to receive shares of the
Company stock in lieu of repayment of
principal and was converted in 2006. The 2006
loan is non-convertible.                               30,000          326,000

Promissory note issued to Stephanie Buchert,
relative of CEO, on May 1, 2004. Interest of
10% and principal installments of $200 to be
made monthly, beginning July 1, 2004 with the
outstanding principal balance and accrued
interest due on December 31, 2004.                      9,093            9,093

Promissory note issued to Celine Coicaud,
employee, on December 31, 2003. Interest of
10% and principal instalments $50 to be made
monthly, beginning July 1, 2004 with an
additional payment of $9,900 due August 10,
2004 and the remaining principal balance and
accrued interest due on December 31, 2004.              8,326            8,870

Promissory note issued to Helene Legendre,
Vice President and shareholder, on June 30,
2004 with Interest of 10% and payments of
$877 to be made monthly, beginning July 1,
2004 with the remaining principal balance and
accrued interest due on December 31, 2004.            110,301          110,486
                                                --------------   --------------

        Totals notes payable - related          $     192,482    $     193,658
                                                ==============   ==============

                                       15
<PAGE>

Total interest expense for the periods ended March 31, 2007 and March 31, 2006
for related parties amounted to $8,661 and $3,649, respectively. The Company is
currently in default on various notes payable and is in the process of
negotiating settlements or payments. All notes are included in current
liabilities.

MANAGEMENT FEES.

The Company has employment agreements with two members of management through
March 2008. These agreements are cancelable at any time by the Company or member
of management. As of March 31, 2007 and December 31, 2006, the Company had
$200,718 and $202,481, respectively, payable to management in arrears under
these agreements. Expenses related to these agreements are recorded in general
and administrative expense and amounted to $16,237 and $30,000 for the periods
ended March 31, 2007 and March 31, 2006, respectively.

NOTE 10 - LEASES

The Company leases its office facility under a month-to-month lease.

CAPITAL LEASES.

The Company leases certain computers under agreements that are classified as
capital leases. The cost of equipment under capital leases is included in the
balance sheets as furniture and equipment and amounted to $31,095 at March 31,
2007. Accumulated amortization of the leased equipment at March 31, 2007 was
$12,317. Amortization of assets under capital leases is included in depreciation
expense.

The future minimum lease payments required under the capital leases and the
present value of the net minimum lease payments as of March 31, 2007 are as
follows:

                                                Three Months
                                                   Ending
                                                 March 31,        Amount
                                                ------------    ----------
                                                    2008        $   4,986
                                                    2009            3,005
                                                    2010            2,507
                                                 Thereafter            --
                                                                ----------
   Total minimum lease payments                                    10,498

     Less: amount representing interest                            (1,736)
                                                                ----------

   Present value of net minimum lease payments                      8,762

     Less: current maturities of capital lease
       obligations                                                 (4,986)
                                                                ----------

   Long-term capital lease obligations                          $   3,776
                                                                ==========

                                       16
<PAGE>

NOTE 11 - NOTES PAYABLE

As of March 31, 2007 and December 31, 2006, the Company had notes payable of
$407,586 and $87,586, respectively.

                                                     2006             2005
                                                --------------   --------------
Promissory note issued to James Bell on May
26, 2004 in the amount or $25,000 with
interest of 10%. There are no monthly
payments and the principal along with the
accrued interest is due on or before December
31, 2005 or the date the Company received
proceeds from the public offering of its
shares, whichever is earlier. The promissory
note contains an option for the holder to
receive 1% of the outstanding shares in lieu
of repayment of principal.                      $      25,000    $      25,000

Promissory notes issued to ARABIA Corporation
on various dates between September 18, 2003
and May 18, 2004 with interest of 10%.
Principal along with accrued interest is
payable on the maturity dates between
September 18, 2004 and December 31, 2004.              55,000           55,000

Promissory note issued to Sax Public
Relations, Inc. December 1, 2005 with
interest accruing from September 1, 2005 at
10%. Payments of $1,000 to be made monthly
beginning February 1, 2006 through March
2007.                                                   7,586            7,586

Promissory note issued to First Bridge Capital on
January 23, 2007.                                     320,000               --
                                                --------------   --------------

Total notes payable                             $     407,586    $      87,586
                                                ==============   ==============

The Company is currently in default on various notes payable and is in the
process of negotiating settlements or payments. All notes payable are included
in current liabilities.

NOTE 12 - STOCKHOLDERS' EQUITY

Following the completion of the reverse merger, the Company had two classes of
stock.

PREFERRED STOCK.

The Company has one class of preferred stock with a par value of $0.001. The
Company has 5,000,000 shares authorized and had 3,000,000 Series 2006 preferred
shares issued and outstanding.

                                       17
<PAGE>

COMMON STOCK.

The Company has one class of common stock with a par value of $0.001. The
Company had 45,000,000 shares authorized and 44,772,159 issued and outstanding
just prior to December 1, 2006 in connection with the Company's re-domestication
(see Note 1). On December 1, 2006, the Company implemented a 1 for 20 reverse
stock split of all its issued and outstanding shares. After the reverse stock
split, there were 2,238,608 shares of common stock issued and outstanding. At
the date of the reverse split, the Company had 3,000,000 shares of convertible
preferred stock issued and outstanding. All preferred shares were converted into
20,250,000 shares of post reverse split common stock.

Prior to the reverse split, the Company had made promises to issue more common
stock, but was unable to due to a lack of authorized shares. Before the merger
completed in November 2006, the Company was in the process of attempting to
increase the number of authorized common stock shares. Accordingly all promises
to issue common stock were classified as a liability. See descriptions of
transactions below.

(a)   In December 2006, accounts payable to a consulting company in the amount
of $12,698 was converted into 22,650 common shares with a par value of $0.001
per share. The Company recorded common stock in the amount of $23 and additional
paid in capital ("APIC") in the amount of $12,675. As of March 31, 2007, this
agreement was finalized. However, stock certificates were not issued until
subsequent to year-end. As of March 31, 2007, 2006, the shares were considered
outstanding.

(b)   In December 2006, accounts payable to a consulting company in the amount
of $34,830 was converted into 35,000 common shares with a par value of $0.001
per share. The Company recorded common stock in the amount of $35 and APIC in
the amount of $34,795. As of March 31, 2007, this agreement was finalized.
However, stock certificates were not issued until subsequent to year-end. As of
March 31, 2007, the shares were considered outstanding.

(c)   In August 2006, the Company entered into a funding agreement with First
Bridge Capital Incorporated for working capital purposes. First Bridge Capital
will make serial investments in the maximum amount of $1,000,000 for a future
exchange of the Company's convertible preferred stock. Before re-domestication,
the Company had received $538,500 in advance payments from First Bridge Capital.
However, after the re-domestication was completed, all advance payment of
$538,500 and related accrued interests of $12,456 were converted into 5,510
shares of preferred stock at year end, on the basis of 1 preferred share issued
for each $100 owed. As of March 31, 2007, this agreement was finalized. However,
stock certificates were not issued until subsequent to year-end. As of March 31,
2007, the shares were considered outstanding.

                                       18
<PAGE>

In January 2007, First Capital issued a note in the amount of $15,000 to the
Company. After the inception of the note, the Company entered into an agreement
with First Bridge Capital and converted the note into 150 shares of preferred
stock on the basis of 1 preferred share issued for each $100 owed. At the date
of conversion, the market price of preferred stock was $0.51. The company
recorded $0.15 of preferred stock account and $14,999.85 of additional paid in
capital.

In connection with the funding agreement, the Company issued First Bridge
Capital 50,000 (1,000,000 pre reverse split) common stock warrants. These
warrants were valued at $20,000 as that was the cash payment equivalent of the
value of services. The Company accounted for these warrants as a liability for
derivative instruments as they didn't have enough authorized shares to issue
stock for these warrants. The Company valued these warrants at September 30,
2006 using the Black-Scholes model and determined that the value as of September
30, 2006 was $4,965. Accordingly the Company recognized a gain on the change in
fair value of derivative instruments in the amount of $15,035 and reduced their
initial $20,000 liability to $4,965. The factors used for the Black Scholes
model were a market price of $0.05 per share; volatility of 150%; risk free
interest rate of 6%; exercise price of $0.001 per share; and an estimated life
of 4.8 years.

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$4,965 arisen due to a lack of authorized shares had to be eliminated and
accounted for as equity. The value for the derivative liability needed to be
re-calculated using the Black Scholes model as of December 1, 2006 (the date of
the reverse split). The recalculated value of the derivative liability was
$14,836, which became an addition to APIC. The remaining value of $9,871, after
eliminating derivative liability, was recognized as a loss on derivative. The
factors used for the Black Scholes model were a market price of $0.30 per share;
volatility of 178%; risk free interest rate of 4.39%; exercise price of $.02 per
share; and an estimated life of 4.55 years.

(d)   In January 2007, the Company issued 65,000 shares of common stock with a
par value of $0.001 to Karen Dix for consulting services provided to the
Company. At the date of issuance, the market price of the Company's common stock
was $0.51 per share. The Company recorded $65 in common stock and $33,085 in
additional paid in capital.

(e)   In 2006, a third party exercised 290,000 (5,800,000 pre reverse-split)
warrants pursuant to a settlement agreement executed on December 31, 2005. The
Company issued 290,000 shares of its common stock related to the transaction and
the value was recorded as paid in capital.

(f)   In July 2006, a settlement agreement was agreed upon between the Company
and a consulting group for financial public relations services that was
performed. The Company was to issue 7,700,000 shares of common stock for
compensation for the services performed by the consulting group. The value of
the shares on the date of issuance was based on the fair market value of the
common shares on the date of settlement. The Company had recorded this expense
as public relations services expense in the amount of $847,000. However, the
Company did not have sufficient common shares authorized and did not have
sufficient un-issued shares available to settle this contract at the time of
settlement. Therefore, 4,990,000 (249,500 post split) common shares were issued
to the consulting group as of September 30, 2006. The Company still owed
2,710,000 shares to complete this settlement. A liability to issue the remaining
shares was recorded based on the market price at the time of the settlement of
$0.11 per share.

                                       19
<PAGE>

As of September 3, 2006, the stock price had fallen to $0.05 per share.
Accordingly the Company recognized a gain on the change in fair value of
derivative instruments of $162,600 for the three months ending September 30,
2006. The remaining liability of $135,400 was included on the balance sheet as a
liability for derivative instruments. Following the company's recapitalization,
2.71 million shares of common stock were issued to the consulting group on
December 11, 2006. Per the settlement, these shares were not adjusted for the
reverse split. Therefore, the derivative liability in the amount of $135,400
arisen due to a lack of authorized shares had to be eliminated and accounted for
as equity. In addition, due to changes in market value for common stock, the
value for the derivative liability needed to be adjusted before any changes were
made as of December 11, 2006. The recalculated value for the derivative
liability was $1,626,000, of which $54,200 was recognized as common stock and
$1,571,800 was recognized as APIC. The remaining value after offsetting
derivative liability in the amount of $1,626,000 was recognized as a loss on
derivative after elimination of the derivative liability. The adjusted value of
the derivative was calculated by number of shares to be issued multiplied by the
market price per share at the time of issuance.

(g)   In 2006, the Company contracted with a third party to perform public
relations services that amounted to $24,000. The Company agreed to pay for these
services in common stock based upon the average 30 day trading price at a
specified time during the year. The average trading price determined was $0.29
per share, resulting in the need to issue 4,137 (82,759 pre reverse split)
shares of stock. The Company did not have sufficient authorized common shares
available to settle this contract. Therefore a liability was accrued for the
service expense incurred of $24,000. As of September 30, 2006, the price of the
stock had dropped to $0.05 per share. Accordingly, the company recognized a gain
on the change in fair value of derivative instruments of $19,862 for the three
months ended September 30, 2006. The remaining liability of $4,138 was included
on the balance sheet as a liability. As of December 31, 2006,the market value of
derivative liability was $2,152, which was calculated by multiplying 4,137
shares with market price on December 31, 2006 of $0.52. The difference of $1,986
was, then, recognized as gain on derivative, accordingly.

The following schedule summarizes the total liability originally recognized, the
gain (loss) during the last fiscal year, the amount transferred to equity upon
recapitalization and the remaining liability at March 31, 2007:

<TABLE>
                                       Original      Gain/(Loss)                    Liability as of
                                       Liability     Recognized        Equity      December 31, 2006
                                      -----------   ------------    ------------   -----------------
<S>                                   <C>           <C>             <C>            <C>
Promise to issue convertible
  preferred stock                     $  481,382    $        --     $   481,382    $             --

Settlement of 2,710,000 common
  shares due                             298,000     (1,328,000)      1,626,000                  --

82,579 shares due to public
  relations firm                          24,000         21,848              --               2,152

Common stock warrants to First
  Bridge Capital                          20,000          5,164          14,836                  --

Non-employee stock option and
  warrants (Note 13)                     581,157        459,166         121,991                  --
                                      -----------   ------------    ------------   -----------------

    Total                                923,000       (841,822)      1,762,827               2,152

                        Grand Total   $1,404,539    $  (841,822)    $ 2,244,209    $          2,152
                                      ===========   ============    ============   =================
</TABLE>

                                       20
<PAGE>

NOTE 13 - STOCK OPTIONS AND WARRANTS

(a)   In January 2004, the Company granted an option to purchase 152,813
(3,056,250 pre reverse split) restricted shares of common stock, exercisable at
$1.00 ($0.05 pre split) per share, to a non-employee; this option vested in
April 2004. This option expires in January 2010 and was not valued at grant
date. Because the Company did not have sufficient shares authorized to issue if
the option was exercised, this amount was recorded as a derivative and
classified on the balance sheet as a liability for derivative instruments. The
Company revalued this option at September 30, 2006 using the Black-Scholes model
and determined that the value of this option was $136,431. Accordingly, the
Company recognized a loss on the change in fair value of derivative instruments
of $136,431 and increased the liability due as of September 30, 2006 to
$136,431. The factors used for the Black Scholes model were a market price of
$0.05 per share; volatility of 150%; risk free interest rate of 6%; exercise
price of $0.05 per share; and an estimated life of 4.25 years.

As a result of completed recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $136,431 arisen due to a lack of authorized shares had to be
eliminated and accounted for as equity. In addition, due to changes in market
value for the common stock, the value for the derivative liability had to be
recalculated using the Black-Scholes model as of December 1, 2006 (the date of
reverse split). The recalculated value for the derivative liability was $40,250,
which became an addition to APIC. The remaining difference of $96,181, after
eliminating derivative liability, was recognized as a gain on derivative. The
factors used for the Black-Scholes model were a market price of $0.30 per share;
volatility of 178%; risk free interest rate of 4.39%; exercise price of $1.00
per share; and an estimated life of 4 years.

(b)   In September 2005, the Company granted an option to purchase 40,750
(815,000 pre reverse split) restricted shares of common stock (TelePlus stock
options), exercisable at $1.00 ($0.05 pre reverse split) per share, to an
employee that vests and expires on January 15, 2010. This option was exchanged
for an option to purchase 45,000 restricted shares of common stock (the
equivalent of a 366,750 shares Texxon stock option) issued in May 2006 and an
option to purchase 30,000 restricted shares of common stock (the equivalent of a
244,500 Texxon stock option). Due to the fact that the Company has been
generating recurring losses and also not having an active market to trade its
shares, the value of these options was determined to be zero and accordingly, no
expense or paid in capital has been recorded. The performance-based option
issued to this employee was a part of a performance based stock options issuance
transaction that involved other employees (see subsequent paragraph on
performance based stock options issued in May for more details on this
transaction).

(c)   In September 2005, the Company granted an option to purchase 40,750
(815,000 pre reverse split) restricted shares of common stock, exercisable at
$0.02 ($0.001 pre reverse split) per share, to a non-employee; this option
expires on January 15, 2010. The option was granted in exchange for consulting
services valued at $40,000. The Company has recorded consulting expense in this
amount to reflect the value of these options for the year ended December 31,
2005. Because the Company did not have sufficient shares authorized to issue if
the option was exercised, this amount was recorded as a derivative and
classified on the balance sheet as a liability for derivative instruments. The
Company revalued this option at September 30, 2006 using the Black-Scholes model
and determined that the value of this option was $38,305. Accordingly, the
Company recognized a gain on the change in fair value of derivative instruments
of $1,695 and reduced their liability due as of September 30, 2006 to $38,305.
The factors used for the Black-Scholes model were a market price of $0.05 per
share; volatility of 150%; risk free interest rate of 6%; exercise price of
$0.001 per share; and an estimated life of 3.5 years.

                                       21
<PAGE>

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $38,305 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $11,980, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $26,325 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise
price of $0.02 per share; and an estimated life of 3.25 years.

(d)   In February 2006, the Company granted an option to purchase 65,000
(1,300,000 pre reverse split) restricted shares of common stock, exercisable at
$0.02 ($0.001 pre reverse split) per share, to a consultant for assistance in
the share exchange between Texxon and TelePlus. This option was valued at $0.10
per share. The value of the option was calculated using the Black-Scholes model
with the following assumptions: exercise price of $0.001; share price of $0.10;
risk free interest rate of 6.0%; expected life of 5 years; and estimated
volatility of 150%. The Company recorded the expense and additional paid in
capital in the amount of $130,000 to reflect the finder's fees expense involved
in the reverse merger acquisition process. Because the Company did not have
enough shares authorized to issue if the option was exercised, this amount was
recorded as a derivative and classified on the balance sheet as a liability for
derivative instruments. The Company revalued this option at September 30, 2006
using the Black-Scholes model and determined that the value of this option was
$64,493. Accordingly, the Company recognized a gain on the change in fair value
of derivative instruments of $65,507 and reduced the liability due as of
September 30, 2006 to $64,493. The factors used for the Black-Scholes model were
a market price of $0.05 per share; volatility of 150%; risk free interest rate
of 6%; exercise price of $0.001 per share; and an estimated life of 4.5 years.

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $64,493 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $19,255, which
became an addition to APIC. The remaining difference after offsetting derivative
liability in the amount of $45,238 was recognized as a gain on derivative after
elimination of the derivative liability. The factors used for the Black-Scholes
model were a market price of $0.30 per share; volatility of 178%; risk free
interest rate of 4.39%; exercise price of $0.02 per share; and an estimated life
of 4.25 years.

(e)   In February 2006, the Company issued common stock warrants to two members
of the Company's then current management, and to a public relations firm. These
warrants were for purchase of 125,000 (2,500,000 pre split) restricted shares of
common stock, exercisable at $2.20 ($0.11 pre reverse split) per share. These
warrants were the only options/warrants from pre-merger Texxon to survive the
completion of the share exchange agreement (see Note 1); all other Texxon
warrants were cancelled. These warrants have been valued at $275,973 ($0.1104
per share). The value of the warrants was calculated as of February 1, 2006
using the Black-Scholes model with the following assumptions: exercise price of
$0.11; share price of $0.12; risk free interest rate of 4.4%; expected life of 5
years; and estimated volatility of 150%. These warrants were valued by Texxon
prior to the merger and the effect of their issuance is included in the
additional paid in capital as a result of the merger.

                                       22
<PAGE>

(f)   In April 2006, the Company granted an option to purchase 36,675 (733,500
pre reverse split) restricted shares of common stock, exercisable at $0.02
($0.001 pre reverse split) per share, to a consultant in exchange for consulting
services valued at its fair market value for the services performed at $40,343.
Because the Company did not have sufficient shares authorized to issue if the
options were exercised, this amount was recorded as a derivative and classified
on the balance sheet as a liability for derivative instruments. The Company
revalued this option at September 30, 2006 using the Black-Scholes model and
determined that the value of this option was $36,287. Accordingly, the Company
recognized a gain on the change in fair value of derivative instruments of
$4,056 and reduced their liability due as of September 30, 2006 to $36,287. The
factors used for the Black-Scholes model were a market price of $0.05 per share;
volatility of 150%; risk free interest rate of 6%; exercise price of $0.001 per
share; and an estimated life of 3.5 years.

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $36,287 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $10,782, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $25,505 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise
price of $0.02 per share; and an estimated life of 3.25 years.

(g)   In April 2006, the Company granted an option to purchase 6,113 (122,250
pre reverse split) restricted shares of common stock, exercisable at $0.02
($0.001 pre reverse split) per share, each to two employees (total of 12,225
(244,500 pre reverse split) shares of common stock). The option was valued at
$13,448 ($0.11 per share). The value of the option was calculated using the
Black-Scholes model with the following assumptions: exercise price of $0.001;
share price of $0.12; risk free interest rate of 6.0%; expected life of 4 years;
and estimated volatility of 150%. The Company recorded payroll expense and
additional paid in capital in the amount of $13,448 to reflect the value of
these options for the period ended September 30, 2006.

(h)   In April 2006, the Company granted an option to purchase 75,000 (1,500,000
pre reverse split) restricted shares of common stock, exercisable at $3.40
($0.17 pre reverse split) per share, to an investment banking and financial
advisory organization as partial compensation for assistance in identifying
suitable acquisition targets and long term funding. This option was valued at
$0.156 per share. The value of the option was calculated using the Black-Scholes
option pricing model with the following assumptions: exercise price of $0.17;
share price of $0.17; risk free interest rate of 6.0%; expected life of 5 years;
and estimated volatility of 150%. The Company recorded an increase and decrease
to additional paid in capital in the amount of $234,000 to reflect the finder's
fees expense involved in the reverse merger acquisition process. Because the
Company did not have enough shares authorized to issue if the option was
exercised, this amount was recorded as a derivative and classified on the
balance sheet as a liability for derivative instruments. The Company revalued
this option at September 30, 2006 using the Black-Scholes model and determined
that the value of this option was $61,917. Accordingly, the Company recognized a
gain on the change in fair value of derivative instruments of $172,611 and
reduced the liability due as of September 30, 2006 to $61,917. The factors used
for the Black-Scholes model were a market price of $0.05 per share; volatility
of 150%; risk free interest rate of 6%; exercise price of $0.17 per share; and
an estimated life of 4.5 years.

                                       23
<PAGE>

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $61,917 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $18,482, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $43,435 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise
price of $3.40 per share; and an estimated life of 4.25 years.

(i)   In May 2006, the Company granted an option to purchase 26,488 (529,750 pre
reverse split) restricted shares of common stock, exercisable at $0.02 ($0.001
pre reverse split) per share, each to two members of management (total of 52,975
(1,059,500 pre reverse split) shares of common stock). Each option was valued at
$58,273 ($0.11 per share). The value of the option was calculated using the
Black-Scholes option pricing model with the following assumptions: exercise
price of $0.001; share price of $0.12; risk free interest rate of 6.0%; expected
life of 4 years; and estimated volatility of 150%. The Company recorded the
payroll expense and additional paid in capital in the amount of $58,273 to
reflect the value of these options for the period ended September 30, 2006.

(j)   In May 2006, the Company granted an option to purchase 18,338 (366,750 pre
reverse split) restricted shares of common stock, exercisable at $0.02 ($0.001
pre reverse split) per share, to one employee. The option was valued at $0.12
per share. The value of the option was calculated using the Black-Scholes model
with the following assumptions: exercise price of $0.001; share price of $0.12;
risk free interest rate of 6.0%; expected life of 4 years; and estimated
volatility of 150%. The Company recorded payroll expense and additional paid in
capital in the amount of $20,171 to reflect the value of this option for the
period ended September 30, 2006.

(k)   The Company granted options to purchase 176,875 (3,537,500 pre reverse
split) restricted shares of common stock to employees on May 25, 2006 (based on
performance), exercisable at $0.02 ($0.001 pre reverse split), that vest
immediately. At the time of grant, the Company was unable to determine whether
the Company would meet the requirement needed in order to grant the options. Due
to these facts, no expense or paid in capital has been recorded.

(l)   In July 2006, the Company contracted with a third party to perform public
relations services. The total value of the services to be provided was $500,000;
the term of the contract was one year. The Company granted a warrant to purchase
192,308 (3,846,154 pre reverse split) restricted shares of common stock,
exercisable at $0.02 ($0.001 pre reverse split) per share. Because of the
one-year term of the contract, the Company only recognized the grant of a
warrant to purchase 961,538 shares at an expense of $125,000. The Company
accounted for this warrant as a liability for derivative instruments as the
Company did not have sufficient authorized shares to issue if the warrant was
exercised. The Company valued this warrant at September 30, 2006 using the
Black-Scholes model and determined that the value was $47,736. Accordingly, the
Company recognized a gain on the change in fair value of derivative instruments
in the amount of $120,226 and reduced the initial $125,000 liability to $47,736.
The factors used for the Black-Scholes model were a market price of $0.05 per
share; volatility of 150%; risk free interest rate of 6%; exercise price of
$0.001 per share; and an estimated life of 4.8 years.

                                       24
<PAGE>

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$47,736 due to a lack of authorized shares had to be eliminated and accounted
for as equity. In addition, due to changes in market value for the common stock,
the value for the derivative liability had to be recalculated using the
Black-Scholes model as of December 1, 2006 (the date of reverse split). The
recalculated value for the derivative liability was $14,266, which became an
addition to APIC. The remaining difference after offsetting derivative liability
in the amount of $33,470 was recognized as a gain on derivative after
elimination of the derivative liability. The factors used for the Black-Scholes
model were a market price of $0.30 per share; volatility of 178%; risk free
interest rate of 4.39%; exercise price of $0.02 per share; and an estimated life
of 4.55 years.

In 2007, an additional 96,154 warrants were issued under this contract. The
Company used the Black-Scholes model to value these options. The factors used
were a market price of $0.79 per share; volatility of 178%; risk free interest
rate of 6%; exercise price of $0.02 per share; and an estimated life of 4.3
years. This resulted in $75,500 of additional paid in capital.

(m)   In October 2006, the Company granted an option to purchase 10,000 (200,000
pre reverse split) restricted shares of common stock, exercisable at $0.01 per
share, to a non-employee; this option will expire on October 15, 2011. This
option was granted in exchange for consulting services, valued at $11,814 using
the Black-Scholes model. Because the Company did not have enough shares
authorized to issue if this option was exercised, this amount was recorded as a
derivative and are classified on the balance sheet as a liability for derivative
instruments. The factors used for the Black-Scholes model were a market price of
$0.06 per share; volatility of 178%; risk free interest rate of 4.39%; exercise
price of $0.01 per share; and an estimated life of 5 years.

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$11,814 due to a lack of authorized shares had to be eliminated and accounted
for as equity. In addition, due to changes in market value for the common stock,
the value for the derivative liability had to be recalculated using the
Black-Scholes model as of December 1, 2006 (the date of reverse split). The
recalculated value for the derivative liability was $6,976, which became an
addition to APIC. The remaining difference of $4,838 after elimination of
derivative liability was recognized as a gain on derivative. The factors used
for the Black-Scholes model were a market price of $0.70 per share; volatility
of 178%; risk free interest rate of 4.39%; exercise price of $0.01 per share;
and an estimated life of 4.75 years.

(n)   In December 2006, the Company granted an option to purchase 70,000
restricted shares of common stock, exercisable at $0.01 per share, to a
non-employee; this option will expire on December 31, 2011. This option was
granted in exchange for consulting services, valued at $48,846 using the
Black-Scholes model. The Company recorded consulting expense and additional
paid-in-capital in this amount. The factors used for Black-Scholes model were a
market price of $0.70 per share; volatility of 178%; risk free interest rate of
4.39%; exercise price of $0.01; and a estimated lift of 5.00 years.

                                       25
<PAGE>

(o)   In December 2006, the Company granted options to purchase 414,900
restricted shares of common stock, exercisable at $0.01 per shares, for
consultants (one of which is James Gibson, the Company's vice president business
development); these options will expire on December 31, 2011. These options were
valued at $215,748 using the Black-Scholes model. The Company recorded
consulting expense and additional paid-in-capital in this amount. The factors
used for Black-Scholes model were a market price of $0.52 per share; volatility
of 178%; risk free interest rate of 4.39%; exercise price of $0.01; and a
estimated life of 5.00 years.

(p)   In December 2006, the Company granted options to purchase 179,300
restricted shares of common stock, exercisable at $0.01 per share, to various
employees (one of which is Ross Nordin, the Company's chief financial officer);
these options will expire on December 31, 2011. These options were valued at
$93,236 using Black-Scholes model. The company recorded consulting expense and
additional paid-in-capital in this amount. The factors used for Black-Scholes
model were a market price of $0.52 per share; volatility of 178%; risk free
interest rate of 4.39%; exercise price of $0.01; and an estimated life of 5.00
years.

A summary of the status of, and changes in, the Company's stock warrant and
option grants of and for the three months ended March 31, 2007 is presented
below for all warrants and options granted to employees and non-employees:

<TABLE>
                                                           March 31, 2006
                                          --------------------------------------------------
                                           Common Stock     Common Stock    Weighted Average
                                             Warrants         Options        Exercise Price
                                          --------------   --------------   ----------------
<S>                                       <C>              <C>              <C>
   Outstanding at Beginning of Year             367,308        1,304,851    $          0.68

   Granted                                       96,154               --                 --

   Forfeited                                         --               --                 --
                                          --------------   --------------   ----------------

   Outstanding at End of Period                 463,462        1,304,851    $          0.68
                                          ==============   ==============   ================

   Exercisable at End of Period                 367,308        1,127,976
                                          ==============   ==============
</TABLE>

                                       26
<PAGE>

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

      The following management's discussion and analysis of financial condition
and results of operations is based upon, and should be read in conjunction with,
our unaudited financial statements and related notes included elsewhere in this
Form 10-QSB, which have been prepared in accordance with accounting principles
generally accepted in the United States.

OVERVIEW.

      The Company is a telephony services company located in Los Angeles,
California. As one of the first emerging truly international MVNO's (mobile
virtual network operators), the Company has built a platform that can be used to
provide a wide array of services to mobile/WiFi phone and VOIP users worldwide.

      The Company is the parent company of Vocalenvision, a pioneer in the field
of wireless communications. The Company's main role is that of a research and
development incubator that endeavors to create new opportunities for its
subsidiaries for the continually evolving convergence of international GSM
wireless, WiFi and VoIP networks that create the vehicles that consistently
deliver its innovative "native-language" contents and services to the end-user
customer. In addition, the Company is actively seeking acquisition targets to
diversify the company's holdings and to strengthen the new "Continan
Communications" brand.

      Through its Vocalenvision subsidiary, the Company offers proprietary
products and services that help customers communicate effectively while
travelling abroad. Branded as Vocalyz(TM), the Company's wireless service has
market potential, boasting amongst its features a "teleconcierge", who is a live
operator trained to provide a variety of business-related and travel-related
services to travelers directly from their Vocalyz travel phone.

      Vocalenvision has to date expended much of its efforts and funds on
development of proprietary software and the initiation of its sales and
marketing efforts. It is uncertain about the market acceptance of its products
that, aside from voice transmission at a competitive rate, include auxiliary
services offered through its platform and software and delivered to the
customer's cellular phone.

      The Company maintains its network operations and primary customer service
center at its Los Angeles headquarters, and has strategic relationships with
several service networks in the United States, Europe, and Asia.

      The Company is focused on the continued development and implementation of
a proprietary layered communications architecture that operates in unison with
conventional wireless, VoIP and PSTN networks in order to deliver
"native-language" services to its end customers.

      The Company operates many of its own "in-network" platforms as an
independent unit while using existing operator networks from the leading
international cellular service providers to transport the customer's calls as
well as deliver users "native-language" content. The Company supplies enhanced
services and on-demand information to its customers via wireless, WiFi and VoIP
devices in over 120 languages.

                                       27
<PAGE>

      Vocalenvision, Inc. is highly dependent upon the efforts and abilities of
its management. The loss of the services of any of them could have a substantial
adverse effect on it. Vocalenvision, Inc. has not purchased "Key-Man" insurance
policies on any of them.

      To date, Vocalenvision, Inc. has not yet had sales. It expects initial
growth in its sales to come primarily from the re-marketing of its traveler's
assistance coverage and related wireless services (the Super Travel Kit) through
agents and brokers who represent the travel industry. Sales are anticipated to
start mid 2007 in USA and in France. It is anticipated that the services will
provide income to Continan but not sufficient to cover all operational expenses
of the following 12 months.

      As one of the first MVNO's to target international travelers, the Company
should be able to capture a large portion of the travel market by providing its
core services to a highly untapped market. By forming synergistic relationships
with various service providers and content providers, the Company will also be
able to continue to grow revenues significantly by offering the travelers a wide
array of services and content in their native languages.

      Vocalenvision, Inc. is dependent upon supplying telephones which contain
its proprietary SIM cards and which channel calls into the Vocalenvision network
via its platform from which its interpreters and concierge services are
available. Vocalenvision must purchase the phones that require payment prior to
shipment. Thus, Vocalenvision's growth is dependent on the number of telephones
which it can freely distribute and that, in turn, is dependent upon
Vocalenvision's available capital for the purchase of the hardware.

      Vocalenvision, Inc. is also dependent upon travel agents and brokers to
get Vocalenvision telephones, offering its interpreter and concierge services,
into the hands of international travelers prior to their deciding upon
alternative communication methods. Vocalenvision does not have control of such
representatives and is therefore uncertain about its ability always to contact
potential customers on a timely basis.

      Because of the Company's platform, cost benefits, innovative content and
extensive technology and sales management experience, the Company believes its
current business focus towards this highly specific niche within the travel
industry will result in the company realizing positive cash flow by the fourth
quarter of 2008.

      The Company has historically experienced operating losses and negative
cash flow. The Company expects that these operating losses and negative cash
flows may continue through additional periods. Until recently, the Company has
had a limited record of revenue-producing operations but with the modified and
highly realistic product deployment strategy, the Company now believes it has a
predictable, scalable revenue and business model that is based on the Company's
short but proven revenue history will be able to achieve its business plans.

                                       28
<PAGE>

RESULTS OF OPERATIONS.

      The acquisition of TelePlus was considered to be a capital transaction in
substance, rather than a business combination. Inasmuch, the transaction is
equivalent to the issuance of stock by a development stage company (TelePlus)
for the net monetary assets of a public company (Texxon), accompanied by a
recapitalization. The accounting for the transaction is identical to that
resulting from a reverse acquisition, except goodwill and other intangible
assets were not recorded. Accordingly, these consolidated financial statements
are the historical financial statements of TelePlus.

      TelePlus was incorporated in the State of California on September 2, 2002.

(A)   REVENUES.

      Revenues were $1,242 for the three months ended March 31, 2007 compared to
$27,451 for the three months ended March 31, 2006, a decrease of $26,209 or
approximately 95%. The decline in revenues was largely due to the fact that we
are still a development stage company. Currently, the Company's focus has been
on raising capital that is necessary to fund its operations. In the three months
ended March 31, 2006, the Company generated revenue largely from a test
marketing study. A similar study was not performed in 2007 as management was
focused on raising capital. Revenues for the period from September 2, 2002
(inception) through March 31, 2007 were $131,112.

(B)   GENERAL AND ADMINISTRATIVE EXPENSES.

      General and administrative expenses were $262,608 for the three months
ended March 31, 2007 compared to $218,252 for the three months ended March 31,
2006, an increase of $43,956 or approximately 20%. The increase in expenses was
largely due to increased consulting expenses. These consulting expenses were
largely paid for by the issuance of stock and stock options. The consulting
expenses were incurred for investor relation's services.

(C)   OTHER INCOME (EXPENSE).

      Total other expenses of $16,279 for the three months ended March 31, 2007
compared to $7,593 for the year ended December 31, 2005, an increase of $8,686
or approximately 114%. The increase in these expenses was entirely attributed to
increased interest costs as our notes payable balance increased from about
$425,000 at March 31, 2006 to about $600,000 at March 31, 2007. In the quarter
ending March 31, 2007, we received a loan of approximately $320,000 that the
Company anticipates will be converted into preferred stock during the second
quarter of 2007.

(D)   NET LOSS.

      The net loss was $307,910 for the three months ended March 31, 2007
compared to $352,586 for the three months ended March 31, 2006, a decrease of
$44,676 or approximately 13%. While general and administrative costs increased
because of consulting costs, selling expenses and direct costs declined
significantly as the Company was not conducting a test market study. The
Company's direct costs primarily consist of telephones and minutes that we
purchase from other carriers. Because the Company is not conducting test studies
in the current quarter, it did not encounter as much direct costs as in the
quarter ended March 31, 2006.

                                       29
<PAGE>

FACTORS THAT MAY AFFECT OPERATING RESULTS.

      The Company's operating results can vary significantly, depending upon a
number of factors, many of which are outside the Company's control. General
factors that may affect the Company's operating results include:

o     market acceptance of and change in demand for products/services;

o     a small number of customers account for, and may in future periods account
      for, substantial portions of the Company's revenue, and revenue could
      decline because of delays of customer orders or the failure to retain
      customers;

o     gain or loss of clients or strategic relationships;

o     announcement or introduction of new services and products by the Company
      or by its competitors;

o     the ability to build brand recognition;

o     timing of sales to customers;

o     price competition;

o     the ability to upgrade and develop systems and infrastructure to
      accommodate growth;

o     the ability to introduce and market products and services in accordance
      with market demand;

o     changes in governmental regulation;

o     reduction in or delay of capital spending by clients due to the effects of
      terrorism, war and political instability;

o     valuation of derivative liabilities; and

o     general economic conditions.

      The Company believes that its planned growth and profitability will depend
in large part on the ability to promote its services and gain clients.
Accordingly, the Company intends to invest in marketing, strategic partnerships
and development of its client base. If the Company is not successful in
promoting its services and expanding its client base, this may have a material
adverse effect on its financial condition and the ability to continue to operate
its business.

                                       30
<PAGE>

The Company is also subject to the following specific factors that may affect
its operations:

(A)   THE COMPANY MAY NOT BE ABLE TO ACCOMMODATE RAPID GROWTH WHICH COULD
DECREASE REVENUES AND RESULT IN A LOSS OF CUSTOMERS.

      To manage anticipated growth, the Company must continue to implement and
improve its operational, financial and management information systems. The
Company must also hire, train and retain additional qualified personnel,
continue to expand and upgrade core technologies, and effectively manage its
relationships with end users, suppliers and other third parties. The Company's
expansion could place a significant strain on its current services and support
operations, sales and administrative personnel, capital and other resources. The
Company could also experience difficulties meeting demand for its products. The
Company cannot guarantee that its systems, procedures or controls will be
adequate to support operations, or that management will be capable of fully
exploiting the market. The Company's failure to effectively manage growth could
adversely affect its business and financial results.

(B)   THE COMPANY'S CUSTOMERS REQUIRE A HIGH DEGREE OF RELIABILITY IN EQUIPMENT
AND SERVICES, AND IF THE COMPANY CANNOT MEET THEIR EXPECTATIONS, DEMAND FOR ITS
PRODUCTS/SERVICES MAY DECLINE.

      Any failure to provide reliable equipment and services for the Company's
customers, whether or not caused by their own failure, could reduce demand for
the Company's services. The Company continues to improve its services and
related technology and as such, the Company does not expect negative customer
response however this cannot be assured. Negative customer response could impair
the Company's reputation and impair its ability to make future sales.

(C)   DEPENDENCE ON SUPPLIERS MAY AFFECT THE ABILITY OF THE COMPANY TO CONDUCT
BUSINESS.

      The Company supplies telephones to its customers that contain their own
SIM cards, and which channel calls into our network via a platform, from which
our interpreter and concierge services are available. The Company must purchase
these telephones that require payment prior to shipment. Thus, the Company's
growth depends on the number of telephones available for distribution through
rentals and sales, and that, in turn, depend upon available capital for the
purchases. Often the availability of telephones at the best prices is dependent
upon the Company's ability to commit to an immediate purchase and to pay
immediately. If the Company cannot buy telephones in sufficient numbers or at
favorable rates, our revenues may decline or our operating expenses may
increase. The Company only has limited control over any third-party manufacturer
as to quality controls, timeliness of production, deliveries and various other
factors. Should the availability of telephone be compromised, it could force the
Company to develop alternative designs, which could add to the cost of goods
sold and compromise delivery commitments. In such an instance, the Company would
not be able to meet the needs of its customers for a period of time, which could
materially adversely affect its business, results from operations, and financial
condition.

                                       31
<PAGE>

(D)   THE COMPANY FACES STRONG COMPETITION IN ITS MARKET, WHICH COULD MAKE IT
DIFFICULT FOR THE COMPANY TO GENERATE REVENUES.

      The Company's future success will depend on its ability to adapt to
rapidly changing technologies, evolving industry standards, product offerings
and evolving demands of the marketplace. The Company competes for customers
primarily with facilities-based carriers, as well as with other
non-facilities-based network operators. Some of the Company's competitors have
substantially greater resources, larger customer bases, longer operating
histories and greater name recognition than the Company has.

o     Some of competitors provide functionalities that the Company does not.
      Potential customers who desire these functions may choose to obtain their
      equipment from the competitor that provides these additional functions.

o     Potential customers may be motivated to purchase their wireless services
      from a competitor in order to maintain or enhance their respective
      business relationships with that competitor.

In addition, the Company's competitors may also be better positioned to address
technological and market developments or may react more favorably to
technological changes

      Competitors may develop or offer services that provide significant
(technological, creative, performance, price) or other advantages over the
services offered by the Company. If the Company fails to gain market share or
loses existing market share, its financial condition, operating results and
business could be adversely affected and the value of the investment in the
Company could be reduced significantly. The Company may not have the financial
resources, technical expertise, marketing, and distribution or support
capabilities to compete successfully.

      The Company believes that as the cost to the consumer for voice
transmission decreases, consumers will be attracted by the additional services
available from transmission service providers. While at the present time our
interpreter and concierge services are relatively unique, a larger, better
financed transmission service provider might decide to develop its own
competitive services to offer to its own customer base, thereby keeping them
from migrating to us.

(E)   UNCERTAIN DEMAND FOR SERVICES MAY CAUSE REVENUES TO FALL SHORT OF
EXPECTATIONS AND EXPENSES TO BE HIGHER THAN FORECAST IF THE COMPANY NEEDS TO
INCUR MORE MARKETING COSTS.

      The Company is unable to forecast revenues with certainty because the
Company may not continue to provide services in the future to meet the
continually changing demands of customers. The Company is in the process of
refining its sales and marketing plan for in order to achieve the desired level
of revenue, which could result in increased sales and marketing costs. In the
event demand for the Company's services does not prove to be as great as
anticipated, revenues may be lower than expected and/or sales and marketing
expenses higher than anticipated, either of which may increase the amount of
time and capital that the Company needs to achieve a profitable level of
operations. There is no assurance that the Company will be successful in
marketing the services contemplated. Although management has many years of sales
experience and has conducted an informal market research study with respect to
its business, there is no assurance that the market that we propose to establish
will be sufficiently responsive, properly located, and demographically inclined
to the type of operation we intend to operate.

                                       32
<PAGE>

(F)   THE COMPANY COULD FAIL TO DEVELOP NEW PRODUCTS/SERVICES TO COMPETE IN AN
INDUSTRY OF RAPIDLY CHANGING TECHNOLOGY, RESULTING IN DECREASED REVENUES.

      The Company operates in an industry with rapidly changing technology, and
its success will depend on the ability to deploy new products/services that keep
pace with technological advances. The market for communications services is
characterized by rapidly changing technology and evolving industry standards.
The Company's technology or systems may become obsolete upon the introduction of
alternative technologies. If the Company does not develop and introduce new
services in a timely manner, it may lose opportunities to competing service
providers, which would adversely affect business and results of operations.

      There is a risk to the Company that there may be delays in initial
implementation of new services/products. Further risks inherent in new
product/service introductions include the uncertainty of price-performance
relative to products/services of competitors, competitors' responses to its new
product/service introductions, and the desire by customers to evaluate new
products/services for longer periods of time. Also, the Company does not have
any control over the pace of technology development. There is a significant risk
that rights to a technology could be acquired or be developed that is currently
or is subsequently made obsolete by other technological developments. There can
be no assurance that any new technology will be successfully acquired,
developed, or transferred.

(G)   NEW VERSIONS OF THE COMPANY'S SERVICES MAY CONTAIN ERRORS OR DEFECTS,
WHICH COULD AFFECT ITS ABILITY TO COMPETE.

      The Company's services are complex and, accordingly, may contain
undetected errors or failures when first introduced or as new versions are
released. This may result in the loss of, or delay in, market acceptance of its
products. The Company may in the future discover errors and additional
scalability limitations in new releases or new products after the commencement
of commercial shipments or be required to compensate customers for such
limitations or errors, the result of which its business, cash flow, financial
condition and results of operations could be materially adversely affected.

(H)   THE COMPANY'S ABILITY TO GROW IS DIRECTLY TIED TO ITS ABILITY TO ATTRACT
AND RETAIN CUSTOMERS, WHICH COULD RESULT IN REDUCED REVENUES.

      The Company has no way of predicting whether its marketing efforts will be
successful in attracting new customers and acquiring substantial market share.
If the Company's marketing efforts fail, it may fail to attract new customers,
which would adversely affect business and financial results.

                                       33
<PAGE>

(I)   DISRUPTIONS IN OR INTERFERENCE WITH INTERNATIONAL TRAVEL COULD AFFECT THE
COMPANY'S BUSINESS.

      The Company's core competency relates to providing interpreter and
concierge services to international travelers. Therefore, any disruption or
limitation on international travel could have an adverse effect on our business
and revenues. Virtually all such disruptions arise from events beyond the
Company's control, such as terrorist acts which cause governments to limit
international travel, higher fuel costs which make the costs of travel too
expensive, travel restrictions, imposed because of an epidemic or pandemic, such
as bird flu, or economic downturns that make fewer funds available for leisure
travel. Furthermore, the Company does not have alternate revenue sources to
substitute for any such disruption or limitation.

(J)   THE COMPANY'S SUCCESS IS LARGELY DEPENDENT ON THE ABILITIES OF ITS
MANAGEMENT.

      The Company's success is largely dependent on the personal efforts and
abilities of its senior management, none of which currently has an employment
agreement with the Company. The loss of certain members of the Company's senior
management, including its chief executive officer, could have a material adverse
effect on its business and prospects.

      The Company intends to recruit in fiscal year 2007 employees who are
skilled in its industry. The failure to recruit these key personnel could have a
material adverse effect on the Company's business. As a result, the Company may
experience increased compensation costs that may not be offset through either
improved productivity or higher revenue. There can be no assurances that the
Company will be successful in retaining existing personnel or in attracting and
recruiting experienced qualified personnel.

(K)   ANY REQUIRED EXPENDITURES AS A RESULT OF INDEMNIFICATION WILL RESULT IN AN
INCREASE IN THE COMPANY'S EXPENSES.

      The Company's articles of incorporation and bylaws include provisions to
the effect that the Company may indemnify any director, officer, or employee. In
addition, provisions of Nevada law provide for such indemnification, as well as
for a limitation of liability of the Company's directors and officers for
monetary damages arising from a breach of their fiduciary duties. Any limitation
on the liability of any director or officer, or indemnification of any director,
officer, or employee, could result in substantial expenditures being made by the
Company in covering any liability of such persons or in indemnifying them.

OPERATING ACTIVITIES.

      Net cash used in operating activities was $338,115 for the three months
ended March 31, 2007 compared to $206,551 for the three months ended March 31,
2006, an increase of $131,564 or approximately 64%. The primary reason the
Company used more cash was the increase in cash available to us through the
borrowing of $320,000 of convertible loan. This loan allowed the Company to pay
some of its accounts payable and accrued liabilities that have increased as the
Company continued to seek financing.

                                       34
<PAGE>

      The principal components of the net cash used in operations for the three
months ended March 31, 2007 was a net loss of $307,910, offset by the stock
compensation for consulting services and options granted to management and
employees in the amount of $108,650, a decrease in accounts payable of $82,182,
and a decrease in accrued liabilities of $79,247. Net cash used in operating
activities was $3,018,514 for the period from September 2, 2002 (inception)
through March 31, 2007.

INVESTING ACTIVITIES.

      Net cash used in investing activities was $2,759 for the three months
ended March 31, 2007 compared to $0 for the three months ended March 31, 2006.
Net cash used in investing activities was $537,058 for the period from September
2, 2002 (inception) through March 31, 2007.

LIQUIDITY AND CAPITAL RESOURCES.

      As of March 31, 2007, the Company had total current assets of $1,758 and
total current liabilities of $1,269,449, resulting in a working capital deficit
of $1,267,691. At March 31, 2007, the Company's assets consisted solely of other
receivables. As a development stage company that began operations in 2002, the
Company has incurred $6,961,392 in cumulative total losses from inception
through March 31, 2007.

      The above factors raise substantial doubt as to the Company's ability to
continue as a going concern. The Company's independent registered public
accounting firm's audit report included in the Company's Form 10-KSB included
explanatory paragraphs regarding the Company's ability to continue as a going
concern.

      The accompanying consolidated financial statements have been prepared
assuming that the Company continues as a going concern and contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The ability of the Company to continue as a going concern on a
long-term basis will be dependent upon its ability to generate sufficient cash
flows from operations to meet its obligations on a timely basis, to obtain
additional financing and to ultimately attain profitability.

      The Company's current cash flow from operations will not be sufficient to
maintain its capital requirements for the year. Therefore, the Company's
continued operations, as well as the implementation of its business plan, will
depend upon its ability to raise additional funds through bank borrowings and
equity or debt financing of up to $2,000,000 during the year ending December 31,
2007.

                                       35
<PAGE>

      The Company has been successful in obtaining the required cash resources
by issuing stock and notes payable, including related party notes payable, to
service the Company's operations through the first quarter of 2007. Net cash
provided by financing activities was $332,164 for the three months ended March
31, 2007 compared to $189,601 for the three months ended March 31, 2006, an
increase of $142,563 or approximately 75%. This increase was primarily the
result of an increase in the borrowings on notes payable. Net cash used in
financing activities was $3,555,572 for the period from September 2, 2002
(inception) through March 31, 2007.

      Whereas the Company has been successful in the past in raising capital, no
assurance can be given that sources of financing will continue to be available
and/or that demand for its equity/debt instruments will be sufficient to meet
its capital needs, or that financing will be available on terms favorable to the
Company. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities that
might be necessary should the Company be unable to continue as a going concern.

      If funding is insufficient at any time in the future, the Company may not
be able to take advantage of business opportunities or respond to competitive
pressures or may be required to reduce the scope of the Company's planned
product development and marketing efforts, any of which could have a negative
impact on business and operating results. In addition, insufficient funding may
have a material adverse effect on the Company's financial condition, which could
require the Company to:

o     curtail operations significantly;

o     sell significant assets;

o     seek arrangements with strategic partners or other parties that may
      require the Company to relinquish significant rights to products,
      technologies or markets; or

o     explore other strategic alternatives including a merger or sale of the
      Company.

      To the extent that the Company raises additional capital through the sale
of equity or convertible debt securities, dilution of the interests of existing
stockholders may occur. If additional funds are raised through the issuance of
debt securities, these securities may have rights, preferences and privileges
senior to holders of common stock and the terms of such debt could impose
restrictions on the Company's operations. Regardless of whether the Company's
assets prove to be inadequate to meet its operational needs, the Company may
seek to compensate providers of services by issuance of stock in lieu of cash,
which may also result in dilution to existing shareholders.

CONTRACTUAL OBLIGATIONS.

(A)   CAPITAL LEASE.

      The Company leases certain computers under agreements that are classified
as capital leases. The cost of equipment under capital leases is included in the
balance sheets as furniture and equipment and amounted to $31,095 at March 31,
2007. Accumulated amortization of the leased equipment at March 31, 2007 was
$12,317. Amortization of assets under capital leases is included in depreciation
expense.

                                       36
<PAGE>

(B)   OPERATING LEASES.

      The principal executive offices for the Company currently consist of
approximately 1,048 square feet of office space, which are located at 11601
Wilshire Boulevard, Suite 2030, Los Angeles, California. The Company leases this
property on a month-to-month basis at the current monthly rent of $3,500 as of
March 31, 2007.

(C)   INDEMNITIES AND GUARANTEES.

      During the normal course of business, the Company has made certain
indemnities and guarantees under which it may be required to make payments in
relation to certain transactions. These indemnities include certain agreements
with the Company's officers under which the Company may be required to indemnify
such persons for liabilities arising out of their employment relationship, lease
agreements. The duration of these indemnities and guarantees varies, and in
certain cases, is indefinite.

OFF BALANCE SHEET ARRANGEMENTS.

      Other than operating leases, the Company does not engage in any off
balance sheet arrangements that are reasonably likely to have a current or
future effect on its financial condition, revenues, results of operations,
liquidity or capital expenditures.

INFLATION.

      The impact of inflation on the costs of the Company and the ability to
pass on cost increases to its customers over time is dependent upon market
conditions. The Company is not aware of any inflationary pressures that have had
any significant impact on the Company's operations over the past year and the
Company does not anticipate that inflationary factors will have a significant
impact on future operations.

CRITICAL ACCOUNTING POLICIES.

      The SEC has issued Financial Reporting Release No. 60, "Cautionary Advice
Regarding Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting
companies provide additional disclosure and commentary on their most critical
accounting policies. In FRR 60, the SEC has defined the most critical accounting
policies as the ones that are most important to the portrayal of a company's
financial condition and operating results and require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Based on this definition,
the Company's most critical accounting policies include: (a) valuation of
stock-based compensation arrangements; (b) revenue recognition; and (c)
derivative liabilities. The methods, estimates and judgments the Company uses in
applying these most critical accounting policies have a significant impact on
the results the Company reports in its consolidated financial statements.

                                       37
<PAGE>

(A)   VALUATION OF STOCK-BASED COMPENSATION ARRANGEMENTS.

      The Company has issued, and intends to continue to issue, shares of common
stock and options to purchase shares of its common stock to various individuals
and entities for management, legal, consulting and marketing services. The
Company adopted SFAS No. 123 (Revised 2004), "Share Based Payment" ("SFAS No.
123R"). SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. SFAS No. 123R eliminates the ability to account
for the award of these instruments under the intrinsic value method prescribed
by Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and allowed under the original provisions of SFAS No. 123.
These transactions are reflected as a component of selling, general and
administrative expenses in the accompanying statement of operations.

(B)   REVENUE RECOGNITION.

      The Company recognizes revenues when it receives confirmation of the order
and the customer credit card has been debited and confirmed that customers have
used cellular phone minutes.

(C)   DERIVATIVE LIABILITIES.

      During the year ended December 31, 2006, the Company issued warrants and
options to numerous consultants and investors for services and to raise capital.
During the period up until the recapitalization performed on December 1, 2006
(Note 1), the Company did not have sufficient authorized shares in order to
issue these options should they be exercised. Because of the lack of authorized
shares, the Company therefore needed to follow derivative accounting rules for
its accounting of options and warrants.

      The Company evaluates the conversion feature of options and warrant
indexed to its common stock to properly classify such instruments within equity
or as liabilities in its financial statements, pursuant to the requirements of
the EITF No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock," EITF No. 01-06, "The Meaning
of Indexed to a Company's Own Stock," and SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended.

      Pursuant to EITF 00-19, the Company was to recognize a liability for
derivative instruments on the balance sheet to reflect the insufficient amounts
of shares authorized, which would have otherwise been classified into equity. An
evaluation of specifically identified conditions was then made to determine
whether the fair value of warrants or options issued was required to be
classified as a derivative liability. The fair value of warrants and options
classified as derivative liabilities was adjusted for changes in fair value at
each reporting period, and the corresponding non-cash gain or loss was recorded
in the corresponding period earnings.

                                       38
<PAGE>

      In December 2006, the Company completed a reincorporation by merger with
Texxon-Nevada, which, therefore, allowed the Company to increase its authorized
preferred and common shares from 5,000,000 to 10,000,000 shares and from
45,000,000 to 100,000,000 shares, respectively.

      At the date of recapitalization, the Company recalculated the value of its
options and warrants at the current fair value, and recorded an increase to
equity and a decrease to derivative liabilities for the fair value of the
options and warrants. The difference between the liability and the recalculated
fair value was recorded as a gain or loss.

FORWARD LOOKING STATEMENTS.

      Information in this Form 10-QSB contains "forward looking statements"
within the meaning of Rule 175 of the Securities Act of 1933, as amended, and
Rule 3b-6 of the Securities Exchange Act of 1934, as amended. When used in this
Form 10-KSB, the words "expects," "anticipates," "believes," "plans," "will" and
similar expressions are intended to identify forward-looking statements. These
are statements that relate to future periods and include, but are not limited
to, statements regarding adequacy of cash, expectations regarding net losses and
cash flow, statements regarding growth, need for future financing, dependence on
personnel and operating expenses.

      Forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those discussed below,
as well as risks related to the Company's ability to obtain future financing and
the risks set forth above under "Factors That May Affect Operating Results."
These forward-looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.

ITEM 3. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

      The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended) that are designed to ensure that information required to be disclosed
in the Company's periodic reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to management, including the Company's principal executive officer and principal
financial officer, to allow timely decisions regarding required disclosures.

                                       39
<PAGE>

      As of the end of the period covered by this report, management carried out
an evaluation, under the supervision and with the participation of the Company's
principal executive officer and principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act). Based upon the evaluation, the Company's
principal executive officer and principal financial officer concluded that its
disclosure controls and procedures were effective at a reasonable assurance
level to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. In addition, the Company's principal executive officer and principal
financial officer concluded that its disclosure controls and procedures were
effective at a reasonable assurance level to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure.

      Because of the inherent limitations in all internal control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, will be or have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people and/or by management override of
controls. The design of any system of controls also is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions. Over time, controls may become inadequate because
of changes in conditions, and/or the degree of compliance with the policies and
procedures may deteriorate. Because of the inherent limitations in a
cost-effective internal control system, misstatements due to error or fraud may
occur and not be detected.

CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES.

      There were no changes in the Company's disclosure controls and procedures,
or in factors that could significantly affect those controls and procedures,
since its most recent evaluation.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      None.

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

      There were no unregistered sales of the Company's equity securities during
the three months ended on March 31, 2007 that have not previously been reported.
There were no purchases of the Company's common stock by the Company's
affiliates or by it during the three months ended March 31, 2007.

                                       40
<PAGE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

      As of March 31, 2007, the Company was in default in the payment of
$280,068 in principal amount of various notes payable (related and non-related
parties, as discussed in Notes 9 and 11 to the financial statements, but
excluding the note payable to First Bridge Capital) and in the payment of
$80,245 of accrued interest. The Company is in the process of negotiating
settlements or payments. All notes are included in current liabilities. The
Company is negotiating with the lenders to secure a conversion of the debt to a
proposed series of convertible preferred stock; pending the resolution of this
matter, the lenders are exercising forbearance.

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

      None.

ITEM 5. OTHER INFORMATION.

CORRECTIONS TO FORM 10-KSB.

The introductory paragraph to the last table in the notes to the financial
statements should have read:

      A summary of the status of, and changes in, the Company's stock warrant
      and option grants of and for the year ended December 31, 2006 is presented
      below for all warrants and options granted to employees and non-employees.

ITEM 6. EXHIBITS.

      Exhibits included or incorporated by reference in this document are set
forth in the Exhibit Index.

                                       41
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        CONTINAN COMMUNICATIONS, INC.


Dated: May 21, 2007                     /s/ Claude C. Buchert
                                        ---------------------
                                        Claude C. Buchert,
                                        Chief Executive Officer


Dated: May 21, 2007                     /s/ Ross A. Nordin
                                        ------------------
                                        Ross A. Nordin,
                                        Chief Financial Officer


                                       42
<PAGE>

                                  EXHIBIT INDEX

NUMBER                              DESCRIPTION

3.1           Articles of Incorporation, dated March 13, 2006 (incorporated by
              reference to Exhibit 3.1 of the Form 10-KSB filed on May 9, 2007).

3.2           Articles of Merger, dated November 22, 2006 (incorporated by
              reference to Exhibit 99.1 of the Form 8-K filed on December 7,
              2006).

3.3           By-Laws, dated October 6, 1998 (incorporated by reference to
              Exhibit 3.2 of the Form 10-SB filed on February 28, 2002).

4.1           1998 Incentive Stock Option Plan, dated November 1, 1998
              (incorporated by reference to Exhibit 10.1 of the Form 10-SB filed
              on February 28, 2002)

4.2           2002 Non-Qualified Stock Option Plan, dated October 1, 2002
              (incorporated by reference to Exhibit 4 of the Form S-8 filed on
              January 27, 2003)

4.3           Share Exchange Agreement between the Texxon, Inc., TelePlus, Inc.,
              and the Shareholders of TelePlus, Inc., dated March 2, 2006
              (incorporated by reference to Exhibit 2 of the Form 10-QSB filed
              on May 22, 2006).

4.4           Certificate of Designation of TelePlus Acquisition Series of
              Preferred Stock, dated May 8, 2006 (incorporated by reference to
              Exhibit 4.1 of the Form 8-K filed on June 7, 2006).

10.1          Employment Agreement between TelePlus, Inc. and Claude Buchert,
              dated January 1, 2004 (incorporated by reference to Exhibit 10.1
              of the Form 10-KSB filed on May 9, 2007).

10.2          Employment Agreement between TelePlus, Inc. and Helene Legendre,
              dated January 1, 2004 (incorporated by reference to Exhibit 10.2
              of the Form 10-KSB filed on May 9, 2007).

10.3          Addendum to Employment Agreement between TelePlus, Inc. and Claude
              Buchert, dated February 1, 2004 (incorporated by reference to
              Exhibit 10.3 of the Form 10-KSB filed on May 9, 2007).

10.4          Letter of Engagement between TelePlus, Inc. and Ross Nordin, dated
              April 18, 2006 (incorporated by reference to Exhibit 10.4 of the
              Form 10-KSB filed on May 9, 2007).

10.5          Settlement Agreement between Wall Street PR, Inc. and Texxon,
              Inc., dated July 26, 2006 (incorporated by reference to Exhibit
              10.5 of the Form 10-KSB filed on May 9, 2007).

10.6          Agreement for VOIP Services between TelePlus Inc. and Digitrad
              France SARL, dated July 27, 2006 (incorporated by reference to
              Exhibit 99 of the Form 8-K filed on August 14, 2006).

10.7          Funding Agreement between Texxon, Inc. and First Bridge Capital,
              Inc., dated August 14, 2006 (incorporated by reference to Exhibit
              10.7 of the Form 10-KSB filed on May 9, 2007).

10.8          Settlement Agreement between Continan Communications, Inc., First
              Bridge Capital, Inc., and Wall Street PR, Inc., dated December 28,
              2006 (incorporated by reference to Exhibit 10.8 of the Form 10-KSB
              filed on May 9, 2007).

21            Subsidiaries of the Company (incorporated by reference to Exhibit
              21 of the Form 10-KSB filed on May 9, 2007).

31.1          Rule 13a-14(a)/15d-14(a) Certification of Claude C. Buchert (filed
              herewith).

31.2          Rule 13a-14(a)/15d-14(a) Certification of Ross A. Nordin (filed
              herewith).

32            Section 1350 Certification of Claude C. Buchert and Ross A. Nordin
              (filed herewith).

99            Provisional Patent Application, dated September 20, 2004
              (incorporated by reference to Exhibit 99 of the Form 10-KSB filed
              on May 9, 2007).


                                       43