UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT
TO SECTIONS 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year
ended December 31, 2004

SKYBRIDGE WIRELESS, INC.(Name of Small Business Issuer
in its charter)

|Nevada                                                            | 88-0391722                          
|----------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of 
  incorporation or organization) | (I.R.S. Employer
Identification No.)

6565 Spencer St. Suite
205 Las Vegas, Nevada 89119(Address of principal
executive offices) (Zip Code)

(702) 897-8704(Issuers
telephone number, including area code)

Securitiesregistered
under Section 12(b) of the Act: None

Securities registered
under Section 12(g) of the Act: Common Stock, $.001 par value per share
                    (Title of Class)

Indicate by check mark whether
SkyBridge Wireless, Inc. (SkyBridge) (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 Registrant 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 if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [X].

SkyBridges revenues for the
fiscal year ended December 31, 2004, were: $17,709.

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

The aggregate market value of the
voting stock held by non-affiliates, based upon the average bid and ask price as of March
1, 2005 of the Common Stock, was approximately $807,232.

As of March 1, 2005, SkyBridge had
approximately 487,298,627 shares of common stock outstanding.

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

-1-



# TABLE OF CONTENTS

|                                                                     | Page
|-------------------------------------------------------------------- | ----
|PART I                                                               |     
|                                                                     |     
|ITEM 1.  DESCRIPTION OF BUSINESS                                     | 3   
|                                                                     |     
|ITEM 2.  DESCRIPTION OF PROPERTY                                     | 6   
|                                                                     |     
|ITEM 3.  LEGAL PROCEEDINGS                                           | 7   
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS          | 7   
|                                                                     |     
|PART II                                                             
|                                                                     |     
|ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS    | 7   
|                                                                     |     
|ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION   | 8   
|                                                                     |     
|ITEM 7.  FINANCIAL STATEMENTS                                        | 10  
|                                                                     |     
|ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ACCOUNTING   
|AND FINANCIAL DISCLOSURE                                             | 10  
|ITEM 8A CONTROLS AND PROCEDURES                                      | 10  
|                                                                     |     
|PART III                                                            
|                                                                     |     
|ITEM 9.  DIRECTORS,EXECUTIVE OFFICERS,PROMOTERS AND CONTROL PERSONS;
|COMPLIANCE WITH SECTION 16(a)OF THE EXCHANGE ACT                     | 10  
|                                                                     |     
|ITEM 10. EXECUTIVE COMPENSATION                                      | 11  
|                                                                     |     
|ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL                   
|OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                | 11  
|                                                                     |     
|ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              | 12  
|                                                                     |     
|ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                            | 12  
|                                                                     |     
|ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                      | 13  
|                                                                     |     
|SIGNATURES                                                           | 13  

-2-

PART I

ITEM 1. Description of Business

Introduction

| | Our company is SkyBridge Wireless, Inc. (sometimes referred to as the Company
or SkyBridge ) and it is a development stage company with limited revenues,
incorporated in Nevada with our offices located in Las Vegas. The business of the Company
is to further develop a business supplying high-speed fixed wireless Internet access to
businesses and communities in some of the nations fastest-growing metropolitan
markets, with initial efforts in Las Vegas, Nevada, a very dynamic market. Our plan is
non-exclusive; we are considering other services and products to pursue which may
complement our business and meet the needs or demands of business customers in the months
ahead.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Wireless service allows customers to use the Internet at speeds up to 50 times faster than
todays dial-up modems. As the demand for more information, communication and
entertainment grows, so does the need for solutions to provide these services at
high-speed and at an acceptable cost.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridges fixed wireless broadband access provides a high speed solution at a
fraction of the cost of wire-line T-1 data connections, and can be installed and
operational in a much shorter time than many other data solutions. Wireless, though very
competitive, represents one of todays fastest-growing industry sectors.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We are in need of capital, and we are subject to numerous business risks, so no assurance
can be made that SkyBridge will accomplish its goals, including becoming a profitable
business.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Companys principal executive offices are located at 6565 Spencer St, Suite 205,
Las Vegas, Nevada, 89119, and its telephone number is (702) 897-8704.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Past
History

| | Our Company, publicly owned, was previously called Entertainment Internet, Inc.
(ENIN for short), which was incorporated in Nevada on April 20, 1992 under
another previous name of West Tech Services, Inc. Our Company changed its name to
Entertainment Internet, Inc. in 1998 and became inactive sometime during the year 2000. On
November 20, 2000, ENIN filed a voluntary petition for bankruptcy in the United States
Bankruptcy Court and emerged from bankruptcy under Chapter 7 pursuant to a Bankruptcy
Court Order entered on November 28, 2001 with no remaining assets or liabilities.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On March 31, 2003, ENIN consummated an agreement to acquire all of the outstanding capital
stock of SkyBridge Wireless, Inc., in exchange for 330,000,000 shares of the
Companys common stock (ENIN Transaction). SkyBridge Wireless, Inc.,
currently our subsidiary, was originally incorporated on December 20, 2002 under the laws
of the State of Nevada and was a privately owned company. Prior to the ENIN Transaction,
ENIN was a non-operating public shell company with no operations, nominal net assets and
76,554,120 shares of common stock issued and outstanding; and SkyBridge Wireless, Inc. was
a development stage company interested in pursuing the high speed wireless internet
business.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The ENIN Transaction is considered to be a capital transaction in substance, rather than a
business combination. Inasmuch, the ENIN Transaction is equivalent to the issuance of
stock by a development stage company (SkyBridge Wireless, Inc.) for the net monetary
assets of a non-operational public shell company (Entertainment Internet, Inc.),
accompanied by a recapitalization. The accounting for the ENIN Transaction is identical to
that resulting from a reverse acquisition, except goodwill or other intangible assets were
not recorded. The Company recognized an acquisition cost of $7,449, which is the net
balance of the par value of the issuance of common stock related to the ENIN Transaction
totaling $7,655 less the cash received from ENIN totaling $206. Accordingly, financial
statements in this Report are primarily the historical financial statements of SkyBridge
Wireless, Inc., the private company which then became part of the public company as part
of the ENIN Transaction. Note, as part of the ENIN Transaction, ENIN changed its name to
SkyBridge Wireless, Inc.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Current
Business

| | SkyBridge
Wireless, Inc. is a broadband fixed-wireless business service provider in Las Vegas,
Nevada. The Company utilizes licensed and unlicensed wireless technology to bypass the
local Telco infrastructure to deliver cost-effective, carrier-class broadband service that
can be installed in 3 business days.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless, Inc. offers high-speed data transport services, point-to-point networking, and a
full complement of Internet Access services. SkyBridge Wireless is currently providing
services on its own operational high speed wireless system which includes a FCC licensed
backbone and a high speed wireless broadcast network that can support more than 8,000
subscribers connected to its fiber optic internet gateway in Las Vegas. Although the
backbone will handle up to 8000 subscribers, SkyBridges current capacity with its 4
operational site locations is 2400 subscribers (600 per site). SkyBridge Wireless is
initially targeting commercial customers in the Las Vegas, North Las Vegas and Henderson
markets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless, Inc. utilizes new, but field-proven, wireless technologies that provide secure,
scaleable bandwidth solutions for:
| | --------------------------------------------------------------------------------------------------------------------------------------

| |  | High-speed
Fixed Wireless Internet Access
| | - | -----------------------------------------

| |  | Virtual
Private Networks (VPN's)
| | - | --------------------------------

| |  | Video
Conferencing
| | - | ------------------

| |  | Voice
(VoIP)
| | - | ------------

| |  | Other
IP applications
| | - | ---------------------

| | Wi-Fi
(IEEE Standard 802.11a/b/g) fixed wireless network users share bandwidth and obtain
transmission speeds depending on how many users are online simultaneously and allocates
bandwidth to the nearest users, to the detriment of those further away. Our
NON-802.11a/b/g system provides scalable bandwidth to each user and allocates bandwidth
relatively evenly to all users. In addition, since our network uses Motorola proprietary
technology, subscribers receive an important layer of security beyond any wireless system.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless mission is to provide a better choice for Internet service for businesses.
The Companys strategy is to be a fixed-wireless broadband provider satisfying the
needs of commercial customers in the Southern Nevada markets. SkyBridge Wireless intends
to achieve its mission and execute its strategy by leveraging fixed-wireless broadband
technology to gain market share through organic growth in the SME (Small  Medium
Enterprise) market. Subject to raising sufficient capital, SkyBridge Wireless also intends
to grow by making acquisitions and taking advantage of a market that SkyBridge feels is
ready for large consolidation opportunity.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless uses reliable Broadband Wireless Technology to provide feature-rich Internet
access without the use of fiber, telephone, or cable lines to the customer location. We
offer a Service Level Agreement (SLA) to insure that our subscribers receive reliable
internet availability, low latency and packet loss on both our wireless network and the
wireless last mile. In addition, we offer our customers a 30-day Money Back Guarantee!
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless services are competitive with most DSL ,cable or T1 level service.
SkyBridge Wireless has a 1.5 Mbps service, that is full duplex, meaning that, (unlike most
cable and DSL), you have full throughput for both uploads and downloads. SkyBridge
Wireless also guarantees the performance of its service with an (SLA) that guarantees
uptime, latency and throughput.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
services offer high-speed Internet access with:
| | ---------------------------------------------------

| |  | Low
Latency
| | - | -----------

| |  | Monitored
CPE
| | - | -------------

| |  | Static
IP Addresses
| | - | -------------------

| |  | Priority
Bandwidth
| | - | ------------------

| | We
own our entire network. Unlike our other competitors, we do not rent wires from telecom
companies to reach your business. Since we are not reliant on third party networks, we can
offer attractive pricing and efficient installation delivery times.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
intend to further develop a business supplying high-speed fixed-wireless Internet access
to businesses and communities in some of the nations fastest-growing metropolitan
markets, with initial efforts in Las Vegas, Nevada, a very dynamic market. Wireless
service allows customers to use the Internet at speeds up to 50 times faster than
todays dial-up modems. As the demand for more information, communication and
entertainment grows, so does the need for solutions to provide these services at high
speed and at an acceptable cost. We currently service nine commercial customers in the Las
Vegas/Henderson market.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
customers can select their desired services, with one-time installation charges and
recurring monthly fees depending on the service selected. We require a twelve month
service contract from our customers, which starts from the date the system first becomes
operational and automatically renews for consecutive one-year terms unless our customer
notifies us of their intent to cancel the contract within 60 days prior to expiration of
the term.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-3-

Competition

| | We face competition from other Internet access providers, as well as large, national
telecommunications service providers who are beginning to enter this market. Current and
prospective competitors include many large, nationally-known companies that possess
substantially greater resources, financial and otherwise, market presence and brand name
recognition than do we. We currently compete, or expect to compete, for the foreseeable
future, with the following: national Internet service providers, numerous regional and
local Internet service providers, most of which have significant market share in their
markets; established on-line information service providers, which provide basic Internet
access, as well as proprietary information not available through public Internet access;
providers of web hosting, co-location and other Internet-based business services; computer
hardware and software and other technology companies that provide Internet connectivity
with their products; telecommunications companies, including global long distance
carriers, regional Bell operating companies and local telephone companies; operators that
provide Internet access through television cable lines; electric utility companies;
communications companies; companies that provide television or telecommunications through
participation in satellite systems; and, to a lesser extent, non-profit or educational
Internet access providers. Some local wireless competitors of ours include Las Vegas.Net,
Wireless Telcorp, KeyOn Communication and Verde Communication, most of which are focused
on the residential markets and not the commercial customer markets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
basic service can be installed and operational in three days instead of the two to six
weeks which is the normal installation time quoted by most of our competitors in the
wireline industry.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
intend to compete with our larger competitors by providing quick and reliable installation
services using our High Speed Broadband services to reach customers that are currently not
being served by any of our wireline or wireless competitors because they lack the fiber
lines to supply these services. Further, we believe that we have a competitive advantage
in the marketplace in that we transmit the data of our customers through secure FCC
license frequencies. Our target market is small to medium size commercial customers who
are unable to get reliable Internet service from any of our competitors.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fixed-wireless
systems can be used for almost anything that a cable is used for, whether the cable is a
T1 circuit, a cable television cable, an Ethernet cable or a fiber optic cable.
Fixed-wireless systems are designed so that they emulate cable connections, and they use
the same type of interfaces and protocols, such as T1, frame relay, Ethernet and ATM.
Fixed-wireless systems are also used for voice communications as well as for carrying
television programming. But most fixed-wireless systems are data-centric, such as for
Internet access, and are flexible in supporting both voice and data communications.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fixed
wireless systems use a small, inexpensive microwave antenna that is attached to a radio at
the customer premises. The Customer Premise Equipment (CPE) is pointed back to the ISPs
Access Point (AP)typically a tall building or radio towerto create a Wireless
Local Loop (WLL).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | With
respect to potential competitors, we expect that manufacturers of computer hardware and
software products, as well as media and telecommunications companies will continue to
enter the Internet services market, which will serve to intensify competition. In
addition, as more consumers and businesses increase their Internet usage, we expect
existing competitors to increase further their emphasis on Internet access and electronic
commerce initiatives, resulting in even greater competition. The ability of competitors or
others to enter into business combinations, strategic alliances or joint ventures, or to
bundle their services and products with Internet access, could place us at a significant
competitive disadvantage. We currently lack capital necessary to compete effectively and
we may never obtain enough capital to permit us to compete effectively in our markets.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Moreover,
we expect to face competition in the future from companies that provide connections to
businesses and communities, such as telecommunications providers, cable companies and
electrical utility companies. For example, recent advances in technology have enabled
cable television operators to offer Internet access through their cable facilities at
significantly higher speeds than existing analog modem speeds. These types of companies
could include Internet access in their basic bundle of services or offer such access for a
nominal additional charge. Any such developments could reduce our marketing opportunities,
thereby impairing our ability to achieve revenues.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Business
Plan

| | SkyBridge is a Fixed Wireless Internet Broadband company
that currently specializes in providing high-speed fixed-wireless Internet access to
commercial customers in the Southern Nevada markets.  The current monthly cost
for our service ranges from $49 to $449 depending on the bandwidth requirements of the
customer.  We intend to expand into the residential customer market if we
achieve success with commercial customers and expand our Internet access coverage area
with more access points sufficient to service residential communities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
business strategy revolves around the need to provide quality fixed wireless Internet
Access service to clients and fully satisfy their Internet data needs.  The
typical installation of our wireless Internet Access service for a customer is 3 business
days; based on the fact that SkyBridge Wireless, Inc. owns and operates its own network,
allowing us to control the availability of the services to the customer, unlike that in
comparison to traditional wire-line providers, who currently quote anywhere from 2 to 6
weeks to install the same type of service, due to the fact that a large number of wireline
providers must provision and eventually build or install cable or fiber optics to the
customer location before the customer can be installed
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Once
 we have the capital, we plan to expand our access points from our current 7
locations (4 of which are fully operational and 3 of which we have contracts for but have
not installed the equipment for them to be operational) to 13 locations around the Las
Vegas Valley.  We  plan to gain as many customers as possible in a short
period of time, while maintaining a higher than average level of service and support for
the customers and their needs. We currently have the ability of servicing 600 customers
from each of our 4 operational locations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
business needs new towers and we need to attract new customers as part of what we must do
to potentially succeed and meet our goal of being able to build shareholder value and be
self sufficient from operational cash flow without the need for equity or debt
transactions. We seek to expand the number of towers which we control, and increase the
number of paying customers, initially in the Las Vegas area. We seek to joint venture or
     license our business model to third parties in other
geographical areas as part of expansion to new cities. Our plan includes becoming
profitable based upon cash flow from customers, though we are currently non-profitable and
suffering from significant demands for cash to meet both operational expenses and larger
expansion costs. Managements plan, in this regard, is to raise financing through a
     combination of equity and debt financing. Management
believes approximately $5,000,000 will be sufficient to finance the continuing development
for the next twelve months. However, there is no assurance that we will be successful in
raising such financing or in otherwise becoming profitable. In the case that we only
receive $1,000,000 of the projected $5,000,000 the company would have to limit operations
and supply services from its current locations. Our plan would be to become profitable
from our existing locations and then invest into building additional access points until
we reach our goal of 95% coverage of the Las Vegas Valley.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Services
and Equipment

| | SkyBridge provides highly cost competitive fixed wireless
broadband access for small to large commercial clients in markets under  served by
DSL, cable or high-cost wire-line carriers. SkyBridges system is monitored 24 hours
a day to assure exceptional reliability  and up-times, high quality, affordable
Customer Premise Equipment (CPE), and competitive network operation and support costs.
SkyBridge also offer a variety of high speed wireless point to point connections that can
be engineered to support information technology data  projects or applications.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-4-

| | SkyBridge is also involved in broadband wireless network engineering and integration. This
service includes: wireless design and planning, network design documentation, hardware
specifications and recommendations, site survey statistics, topography graphs and antenna
plotting information, path calculations and link probability statistics, and installation
where our crews deploy wireless networks with the quality and timeliness a customer
demands. Proper installation is essential for any wireless system to maintain reliability,
low-maintenance and the ability to withstand harsh environmental conditions.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
currently has basic communication services available for its clients:
| | -------------------------------------------------------------------------------

| |  | 256Kbits
| | - | --------

| |  | 512Kbits
| | - | --------

| |  | 768Kbits
| | - | --------

| |  | 1Mbit
| | - | -----

| |  | 1.5Mbit
| | - | -------

| |  | Point
to Point Connections
| | - | --------------------------

| |  | Wireless
Network Integration
| | - | ----------------------------

| | SkyBridge obtains its hardware and software from third parties.  SkyBridge
utilizes various pieces of equipment and software from third parties including
communication towers, software, and cables. SkyBridge provides a Fixed Wireless point to
Multipoint network that interconnects customers to an Access Point allowing the customer
access to the Internet. Fixed Wireless Broadband is an Internet Access service designed to
take the place of Cable/DSL, Fiber and T1 services from the telephone company and does not
require satellite feeds, a government license, or even local phone services. SkyBridge
Wireless Fixed Wireless systems use a small microwave antenna that is attached to a radio
at the customer premises. The Customer Premise Equipment (CPE) is pointed back to the
Access Point (AP)typically a tall building or radio towerto create a Wireless
Local Loop (WLL). From the CPE the customer can attach their computer system or company
network via a RJ-45 Ethernet connection and connect directly to the Internet.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Current
Locations

| | SkyBridge has a secure equipment cabinet and co-location
facilities at The Rio Hotel and Casinos communications facility. This location
provides us with access to direct fiber on a national backbone network for our Internet
Access backhaul. The Rio Hotel and      Casino is one of our
major Wireless Access Points (WAP), which allows us to broadcast over 240 degrees of line
of sight to the south,      west, north, and northeast areas of
Las Vegas. SkyBridge currently have 3MBits of redundant high-speed fiber bandwidth from
Cox  Communications Business Services national fiber network; which interconnects
with AT&T and Level 3 Communications. This bandwidth is burstable from the 3MB floor
up to 155MB and can be upgraded at any time with very quick response times, because of
having direct      access to the national fiber network. The
wireless backbone interconnects here and handles all customer traffic. This location also
     houses our in-house Network-wide monitoring, and Policy
Server, which will also use this fiber connection for access. This location is
     exclusive to us by the site license for broadcasting and
uses the specific frequencies that are being used by our broadcast and
     backhaul networks.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
also utilizes the rooftop at the Las Vegas Hilton. This site is at the north end of the
Las Vegas Strip, and is positioned for      direct access of
Wireless Broadband services to the entire east and north markets of Las Vegas. This will
also allow us to broadcast  our services to the far north, west, and east sections of
the city, when new customers are obtained, which areas are lacking broadband
     services. SkyBridge plans to use this site to expand its
wireless backbone to be able to deliver cost-effective service to new Access
     Points. This site is directly connected to our High Speed
network via FCC licensed 23GHz 45MBit microwave connections with High speed
     fiber redundancy.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
third access site is a tower located at Frontier Radios rooftop location in the
central south part of Las Vegas. This site is      located in the
middle of one of the most densely populated business areas in Las Vegas. This site has the
ability to service all the      businesses from just south of the
Mandalay Bay on the Las Vegas strip to the many multi-tenant business buildings and
business parks      within the 5 mile broadcast range of this
site. The Frontier Radio site also serves as a high capacity relay site for our High Speed
     Wireless backbone. This site uses the same wireless
technology and equipment as our other radio sites.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
fourth access site is on our corporate offices at 6565 Spencer St, Las Vegas, NV,
89119.  This site is located just south of the  southeast corner of the Las
Vegas International Airport, and has the ability to broadcast to an area of Las Vegas that
a growing number      of businesses are moving
into.  This site serves the 240 degree area east to west and south of the
airport. This radio site will also      serve as a lofting point
for continued expansion of our Wireless High Speed network to the east of Las Vegas into
the greater Green      Valley/Henderson areas. This site uses the
same wireless technology and equipment as our other Radio sites. SkyBridge leases all of
the      sites containing our access points. SkyBridge currently
has the ability of servicing 600 customers from each of its 4 current locations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless, Inc. has Radio Site leases on 3 additional sites here in Las Vegas , NV that are
not yet installed. These sites are located at: (1) The Rio Hotel and Casino Masquerade
Tower rooftop on the 53rd floor of the building located at 3700 West Flamingo
Blvd; This site will allow SkyBridge Wireless to reuse broadcast frequencies and increase
the capacity around the Rio Hotel, which is in the heart in the commercial/industrial
district of Las Vegas; (2) Harrahs Las Vegas Hotel and Casino rooftop at 3475 Las
Vegas Blvd. South, which allows the areas on the East side of the Las Vegas Strip to be
able to gain access the Fixed Wireless network; and (3) AAT Communications Tower  NV
Flowplant 6A on the East side of Las Vegas at 7180 East Washington Blvd, will allow
SkyBridge to supply Fixed Wireless Broadband Access to the central East side of Las Vegas,
which currently has no/or very limited access to any form of Broadband.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Access Point Site Location                   | Status               
|-------------------------------------------- | ---------------------
|Dev-Ton Tower                                |                      
|6565 Spencer Street                         
|Las Vegas, NV 89119                          | Fully Operational    
|North Latitude: 36-4-24                     
|West Longitude: 115-7-70                    
|                                            
|Frontier Radio                              
|270 East Pamalyn                            
|Las Vegas, NV 89119                          | Fully Operational    
|North Latitude: 36-04-01.0                  
|West Longitude: 115-09-39.0                 
|                                            
|Las Vegas Hilton North Tower                
|3000 Paradise Road                          
|Las Vegas, NV 89109                          | Fully Operational    
|North Latitude: 36-07-58                    
|West Longitude: 115-09-12                   
|                                            
|Rio Hotel & Casino Inpanema Tower 22nd Floor
|3700 West Flamingo Road                     
|Las Vegas, NV 89103                          | Fully Operational    
|North Latitude: 36-07-17                    
|West Longitude: 115-11-17                   
|                                            
|Rio Hotel & Casino Masquerade Tower         
|52nd Floor&Telecommunications               
|Room 3700 West Flamingo Road                 | Site Lease Signed -  
|Las Vegas, NV 89103                          | Access Rights Granted
|North Latitude: 36-07-17                    
|West Longitude: 115-11-17                   
|                                            
|AAT Communications Tower - NV Flowplant 6A  
|7180 East Washington Blvd                   
|Las Vegas, NV 89114                          | Site Lease Signed -  
|North Latitude: 36-10-88                     | Access Rights Granted
|West Longitude: 115-1-11                    
|                                            
|Harrah's Las Vegas                          
|3475 Las Vegas Blvd. South                  
|Las Vegas, NV 89109                          | Site Lease Signed -  
|North Latitude: 36-04-14.8                   | Access Rights Granted
|West Longitude: 115-10-19.9                 
|                                            

-5-

Demand
For Wireless Speed and Efficiency

| | There is a demand for speed and increased efficiency in business to business
communications. There is the increasing amount of content that involves a bigger volume of
data files, more Internet services, information, entertainment and communication. As the
desire for more information, communication and entertainment grows, so does the need for
solutions to provide these services at high speed, high reliability and at an acceptable
cost. Wireless has always been an alternative for high-speed connections, but never has
the range of choices been as great or the rate of innovation as rapid. Fixed Wireless
Broadband connections can deliver data rates from 256Kbps to 650 Mbps. These wireless
connections serve the same function as a wireline  interconnecting private networks,
bypassing a local exchange carrier or connecting to the Internet.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

What
is Fixed Wireless Broadband Access?

| | Fixed-wireless systems can be used for almost anything that a cable is used for, whether
the cable is a T1 circuit, a cable television cable, an Ethernet cable or a fiber optic
cable. Fixed-wireless systems are designed so that they emulate cable connections, and
they use the same type of interfaces and protocols, such as T1, frame relay, Ethernet and
ATM. Fixed-wireless systems are also used for voice communications as well as for carrying
television programming. But most fixed-wireless systems are data-centric, such as for
Internet access, or is flexible in supporting both voice and data communications.
Fixed-wireless systems match cable-based systems for all important parameters, including
delay, bit-error rate (1 in 100 million or better) and throughput (1 Mbps to 650 Mbps).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Many applications that operate over a cable should be able to operate over a
fixed-wireless system. Based on a report published by Jupiter Research in February
2003, fewer than 20 percent of buildings have fiber to them, and only about 60 percent are
close enough to a central office (12,000 feet or 3.5 km) to take advantage of DSL
technology. A wireless connection could be the only option for high-speed communications
in some areas. The major reasons for commercial customers to consider using wireless
services include lower costs, faster deployment, because there is no cable to lay or
streets to dig up; greater flexibility because customers can move around their office more
easily in a wireless environment, and better reliability because wireless links can reach
customers who have no wire-line services available in their area. Because SkyBridge
Wireless, Inc. installs the Customer Premise Equipment and maintains the CPEs
functionality as well as the operation of the Fixed Wireless network, you do not need to
be a radio engineer to take advantage of fixed-wireless communications. Wireless
communications offers tremendous flexibility and ever-improving performance, wireless
offers more than sufficient bandwidth for many applications. Fixed wireless systems
operate at frequencies that require line of sight (LOS) and that have broadcast distances
that vary from a few feet to tens of miles. Fixed Wireless Internet Access is distinctly
different from wired services (Cable/DSL, T-1, or Fiber) by its potential transport speed,
ease and rapid installation, reliability and affordability.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

GOVERNMENT
REGULATION

| | We
operates our Fixed Wireless network under FCC licensed 23GHz microwave point to point
backbone links. Each 23GHz backbone connection has a FCC license to operate in this
specific frequency filed under FCC Form 601-M. As to each license in this frequency band,
and pursuant to Section 309(h) of the Communications Act of 1934, as amended, 47 U.S.C
Section 309(h), this license is subject to several conditions. We can only use the
frequencies designated in the license for 10 years. Our right cannot be assigned or
otherwise transferred without the prior consent of the FCC. This license is subject in
terms to the right of use or control conferred by Section 706 of the Communications Act
of 1934, as amended.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SkyBridge
Wireless, Inc. also operates in unlicensed frequencies for the distribution of the Fixed
Wireless Broadband delivered to the clients. Operating in the frequencies of:  902-928MHZ,
2400-2483.5MHz, 5275-5325MHz, & 5725-5850MHz SkyBridge Wireless, Inc. falls under the
FCC guidelines of Part 15 Section 15.245. This allows use of these frequency bands in
broadcasting radio signals under certain levels of radio emissions, which allows us to
effectively provide Fixed Wireless Broadband Internet Access.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employees

| | The Company currently has three (3) full-time employees all of whom are officers of the
Company. It also has two (2) additional full-time employees.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
2. Description of Properties

Facilities

| | The office is a functional and utilitarian office space located at 6565 Spencer St, Suite
205 Las Vegas, Nevada, one of the fastest expanding population areas in the country. It is
located on the southwest side of the city for line of site applications for the Radio
Frequency (RF) network. The office space is conveniently located close to all major roads
and freeways and the airport for easy dispatch of installation and maintenance
crews.  See response under Current Locations under Item 1 for a
description of our leased access points.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-6-

ITEM 3. Legal Proceedings

None.

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

Not applicable

PART II

ITEM
5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market

The Companys stock is currently
listed on the OTC Bulletin Board under the symbol SBWL.

The following table shows the high
and low bid prices of the Companys common stock as reported for the periods
indicated. The quotations shown reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.

|Year Ended December 31, 2003 |  | 
|---------------------------- |  | 
|First Quarter                |  | 
|                             |  | 
|Second Quarter               |  | 
|                             |  | 
|Third Quarter                |  | 
|                             |  | 
|Fourth Quarter               |  | 

|Year Ended December 31, 2004 |  | 
|---------------------------- |  | 
|First Quarter                |  | 
|                             |  | 
|Second Quarter               |  | 
|                             |  | 
|Third Quarter                |  | 
|                             |  | 
|Fourth Quarter               |  | 

Holders of Common Equity

As of March 1, 2005 there were 258
shareholders of record of the Companys common stock, a figure that does not take
into account those shareholders whose certificates are held in the name of depositories,
financial intermediaries, clearing houses, broker-dealers or other nominees such as the
Depository Trust Company (DTC) and its own nominee, Cede & Company.

Dividends

The Company has declared a stock
dividend on October 10, 2003 of one share of NET stock for each share of SkyBridge owned
October 10, 2003. As of May 1, 2004, all shares were issued to complete this dividend.

The Company has not declared or paid
a cash dividend to stockholders as to the Company since it was originally organized. The
Board of Directors presently intends to retain any earnings to finance necessary
operations and does not expect to authorize cash dividends in the foreseeable future. Any
payment of cash dividends in the future will depend upon earnings, capital requirements
and other factors.

Recent Sales of
Unregistered Secuirties

During March 2004, the Company
entered into a Consulting Agreement with an entity whereby, the Company agreed to issue
10,000,000 shares of non-forfeitable common stock in exchange for corporate consulting
services. In addition, the Company will pay $1,000 per month over the term of 12 months.
In December 2004, the parties amended the agreement to eliminate the payment of $1,000 per
month. The Company issued the stock in March 2004 and recorded prepaid services totaling
$98,630 (net of amortized expenses totaling $401,370) as of December 31, 2004December 31,
2004

During May 2004, the Company issued
40,000,000 shares of common stock to the Companys Chief Executive Officer for
services totaling $680,000.

During September 2004, the Company
entered into a Private Equity Credit Agreement (Equity Agreement) with
Globalvest Partners, LLC (Globalvest) which was brokered by May Davis. The
Company issued 3,038,674 shares of common stock during September 2004 for the $55,000 fee.
The Company recorded the fees as unamortized loan fees related to equity credit agreement
which will be amortized as costs of raising capital over the life of the agreement
beginning from the date the Form SB-2 is declared effective, along with $450,000 in
additional loan fees.

-7-

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

General

SkyBridge is a development stage
company that started its business in 2002. SkyBridge intends to continue its network
expansion business so that it may commence material sales in 2005, as estimated by
Management. The Company has limited resources for cash outlay, however the proposed
expansion will continue in 2005 as funding permits. During 2004, the Company continued to
engage in activities to raise capital through equity financing. In March, 2004 SkyBridge
signed an agreement with May Davis Group, NY, NY for help to raise up to $5,000,000 on a
best efforts basis, and the Company is exploring other debt and equity opportunities. No
assurance exists that the Company will successfully raise the capital.

Management expects that if we have
the proper funding in place and can hire the proper amount of qualified personnel we can
achieve a sales increase in 2005.

During the year ended December 31,
2004, the Company incurred a net loss of $2,695,476 or a loss of $0.01 per share.

The Company has a limited operating
history upon which an evaluation of the Company, its current business and its prospects
can be based. The Companys prospects must continually be considered in light of the
risks, uncertainties, expenses and difficulties frequently encountered by companies in
their early stages of development. Such risks include, the Companys inability to
anticipate and adapt to a developing market, the failure of the companys
infrastructure, changes in laws that adversely affect the Companys business, the
ability of the Company to manage its operations, including the amount and timing of
capital expenditures and other costs relating to the expansion of the Companys
operations, the introduction and development of different or more extensive communities by
direct and indirect competitors of the Company, including those with greater financial,
technical and marketing resources, the inability of the Company to attract, retain and
motivate qualified personnel and general economic conditions.

The Company has achieved no
significant revenue or profits to date, and the Company anticipates that it will continue
to incur net losses for the foreseeable future. As of December 31, 2004, the Company had
an accumulated deficit of $4,799,372.

The Company expects that its
operating expenses will increase significantly, especially as it fine-tunes its business
plan. To the extent that increases in its operating expenses precede or are not
subsequently followed by commensurate increases in revenues, or that the Company is unable
to adjust operating expense levels accordingly, the Companys business, results of
operations and financial condition would be materially and adversely affected. There can
be no assurances that the Company can achieve or sustain profitability or that the
Companys operating losses will not increase in the future.

The Companys independent
auditor issued an explanatory paragraph as to their substantial doubt as to the
Companys ability to continue as a going concern, in their Report for the financial
statements of December 31, 2004. Without realization of additional capital, it would be
unlikely for the Company to continue as a going concern. The Company plans to raise
operating capital via equity and/or debt offerings. However, there are no assurances that
such offerings will be successful or sufficient to fund the operations of the Company. In
the event the offerings are insufficient, the Company has not formulated a plan to
continue as a going concern.

Plan of Operation

In light of limited revenues, during
the next 12 months, the Company will actively seek out funding partners. Because the
Company lacks cash and other capital resources, it may be necessary for the officers and
directors to either advance funds to the Company or to accrue expenses until such time as
a successful business operations can be made, however there is no agreement with them for
them to do so, nor is there any assurance that they will or any advances will be
sufficient.

Management intends to hold expenses
to a minimum and to obtain services on a contingency basis or for shares when possible.

-8-

As to labor expenses moving forward,
the Company intends to use 5 full-time employees and will add other employees as needed.
Outside advisors or consultants will be used only if they can be obtained for minimal cost
or on a deferred payment basis or for stock.

Results of Operations

The Company generated $17,709 in
revenues from its operations for the year ended December 31 of 2004. Although limited
sales began in May 2003 the Company has not yet been able to establish a continual sales
promotion due to the lack of funding to date. The Company feels that once the SB-2 is
completed that it will have adequate funding to maintain a continual sale program that
will increase its customer base and revenue.

The results of operations reflected
in this discussion include the operations of SkyBridge Wireless, Inc. for the twelve
months ended December 31, 2003 and December 31, 2004.

Revenue

Our revenues for the following
periods were derived primarily from the sale of our monthly wireless Internet access
services, sales of telecommunications-related hardware and service and installation fees
to our commercial customers.  In addition to revenues generated from our
customers, we receive contract work from third parties to perform services such as
wireless, network or hardware design services, site surveys and other installation or
consulting services for their customers. The contract work produces one-time revenues for
us and there is no continued revenue stream after the contract work is
completed.  We currently do not have a contract in place that guarantees us
future contract work with guaranteed revenues, and there are no assurances that we will be
able to obtain any contract work in the future.

The Company has achieved limited
revenue and has no profits to date; the Company anticipates that it will continue to incur
net losses for the foreseeable future. As of December 31, 2004 the Company had an
accumulated deficit of $4,799,372 compared with an accumulated deficit of $2,103,896 as of
December 31, 2003.

Revenue from the continuing
operations decreased by $ 29,793 (62.6%) from $47,502 (of which $30,500 was from contract
labor) for the twelve months ended December 31, 2003 to $ 17,709 (of which $3,875 was from
contract labor) for the twelve months ended December 31, 2004. The decrease in revenue was
primarily due to the lack of contract work from third party customers.

The Company continues its efforts to
further develop its products, market development and creation of vender/customer
relationships.

Cost of revenue

Total cost of revenue was $41,686
during the twelve months ended December 31, 2004, which is a increased of $2,161 (5.5%)
from $39,525 for the twelve months ended December 31, 2003. The increased in cost was
primarily due to the increase in new site location agreements that have not been fully
installed and are not yet producing revenue.

Operating expenses

Total operating expenses increased by
$571,957 (28.7%) from $1,990,424 for the twelve months ended December 31, 2003 to
$2,562,381 for the twelve months ended December 31, 2004. During the twelve months ended
December 31, 2004, operating expenses consisted of primarily of $1,859,722 for consulting
and professional fees, $673,547 for general and administrative expenses and $29,112 for
depreciation and amortization.  The increase was primarily attributable to
additional consulting and professional fees.  We incurred additional consulting
and professional fees in negotiating and securing leases on three new locations, which are
not yet operational, that will be our future access points.  The two locations
consist of an additional tower at the Rio Hotel and Casino, a tower on Harrahs Hotel
and Casino and an additional tower on the east side of town leased through AAT
Communications.

Other
Expenses/Net Loss

Net Loss increased by $624,580
(30.1%) from a net loss of $2,070,897 for the twelve months ended December 31, 2003 to a
net loss of $2,695,476 for the twelve months ended December 31, 2004. We attribute a major
portion of the Net Loss to other expenses, namely the booking of the issuance of shares to
certain consultants for valuable services to us.

# Liquidity and Capital
Resources

Cash
and Cash Equivalents

We have a commitment from a New York
brokerage firm to raise up to $5 million dollars, but on a best efforts basis. There can
be no assurance that we will have the ability to acquire all the needed funds for the next
twelve months of operations solely from the sale of convertible debentures. The Company
continues to sell debentures to fund its day to day operations and is proceeding with the
SB-2 filing from our Private Equity Credit Agreement with Globalvest to continue operating
our business beyond April 30, 2005.

We have incurred significant losses
and negative cash flows from operations since December 20, 2002 (inception). We have
obtained our required cash resources from private placements, convertible debentures and
notes payable. We may not operate profitably in the future and will be required to
continue to raise additional capital to finance our operations and complete our business
plan.

Cash increased to $18,443 (118.22%)
during the twelve months ended December 31, 2004 from $ 156 for the twelve months ended
December 31, 2003. This increase in cash was primarily due to cash received from issuance
of convertible debentures.

Cash provided by financing activities

Financing activities provided cash of
$475,000 during the twelve months ended December 31, 2004 from the issuance of convertible
debentures.

We recognize the need for the
infusion of cash during the next twelve months. We have an agreement for the sale of
additional debentures of up to an aggregate principal of $1,000,000, however, there is no
assurance that we will be able to complete the sale of debentures and receive the
additional cash infusion. Furthermore we have engaged May Davis Group, an investment
banking firm, to assist us in raising an additional capital through debt or equity
transactions for the expansion of our business plan. There is no assurance this money will
be raised in a timely manner for us to expand. We intend to rely on funds received from
the sale of convertible debentures until the Securities and Exchange Commission declares
the registration statement effective.  After the effective date of the
registration statement, the Company will then rely on its Private Equity Credit Agreement
for the remainder of its funding for the next twelve months of operation.

As previously disclosed, we entered
into a Private Equity Credit Agreement with Globalvest Partners, LLC, a New York limited
liability company, whereby Globalvest Partners has agreed to purchase up to $4.5 million
of common stock over a 36-month period. Specifically, after the Securities and Exchange
Commission has declared effective a registration statement, we will have the right to sell
to Globalvest Partners up to $4.5 million of its common stock at a purchase price equal to
91% of the market price of the average of the 3 lowest closing bid prices of the common
stock during the 10 day trading period following notice from us. The maximum amount that
we can sell to Globalvest in any single transaction is equal, at our election, to the
lesser of (a) 250% of the daily weighted average volume of the shares of common stock of
the Company for the 20 trading days immediately preceding the date of our notice or (b)
$500,000. Each put notice submitted by us must be for at least $25,000 of shares. Although
we have the right to control the timing and the amount of stock sold to Globalvest, there
is no guarantee that we will ever receive any funding from Globalvest Partners.

In addition we may wish to pursue
possible acquisition of or investments in businesses or technologies complementary to our
business, in order to expand and broaden our product and service offerings and achieve
greater operating efficiencies. We may not have sufficient liquidity, or we may not be
able to obtain additional financing on favorable terms or at all, in order to finance such
an acquisition or investment.

With the agreement we have signed for
the sale of additional debentures up to an aggregate principal amount of $1,000,000, we
believe we have adequate cash to fund the company operations for approximately the next
twelve months. An adverse business development may also require us to raise additional
financing sooner than anticipated. We recognize that we may be required to raise such
additional capital at times and in amounts, which are uncertain, especially under the
current capital market conditions. If we are unable to acquire additional capital or are
required to raise it on terms that are less satisfactory than we desire, it may have a
material adverse effect on our financial condition. If necessary, we may be required to
considerably curtail our activities or seek to make alliances that could significantly
result in dilution to our existing shareholders.

In September 2003, the Company
entered into an agreement to acquire 100% of the outstanding capital stock of
(NET) N-E-T Service Corporation (NET Transaction), which was owned
and controlled by Company CEO Jim Wheeler, in exchange for 500,000 shares of the
Companys common stock. The material asset that NET has is a distribution agreement
with an Oregon company for a voice over IP system used in connection with the Internet.
The system would allow businesses to connect their phone systems through the Internet. In
February, 2004, the company completed the purchase of the NET transaction through the
issuance of the 500,000 shares.

Although the Company has achieved
limited sales in 2004, in Managements opinion, some business activity occurred which
has helped to move the Company towards its objectives. The activities include product
development, market development, and creation of vendor/customer relationships and the
signing of an agreement to supply the company with up to $5 million dollars for expansion
on a best efforts basis. As of December 31,2004 the company has raised $475,000 from the
sale of debentures and has signed an Agreement for an equity line of credit with
Globalvest Partners LLC for an additional $4.5 million. This Agreement has been submitted
to the SEC for registration and once completed the Company will start drawing down on the
credit line under this Agreement. The yearly activities were financed primarily through
the infusion of capital from the sale of restricted stock and payment of services with
stock.

Dividend Policy

The Company has declared a stock
dividend on October 10, 2003 of one share of NET stock for each share of SkyBridge owned
on October 10, 2003. As of May 1, 2004, all shares were distributed for this dividend to
complete this transaction.

The Company has not declared or paid
a cash dividend to stockholders as to the Company since it was originally organized. The
Board of Directors presently intends to retain any earnings to finance necessary
operations and does not expect to authorize cash dividends in the foreseeable future. Any
payment of cash dividends in the future will depend upon earnings, capital requirements
and other factors.

-9-

ITEM 7. Financial Statements.

Attached.

ITEM 8.   Changes in
and Disagreements with Accountants.

None.

ITEM 8A CONTROLS AND
PROCEDURES

The
Company maintains a set of disclosure controls and procedures designed to ensure that
information required to be disclosed by the Company in reports that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms. As of December 31, 2004, an
evaluation was carried out, under the supervision and with the participation of the
Companys management, including theChief Executive Officer (the CEO) and
the Chief Financial Officer (CFO), of the effectiveness of the Companys
disclosure controls and procedures as of December 31, 2004. The Company has not completed
its evaluation of the effectiveness of its internal control over financial reporting as of
the end of its most recent fiscal year. As permitted by the SECs final rule
dated March 2, 2005 (Release No. 33-8545), the Company expects to complete its evaluation
of the effectiveness of its internal control over financial reporting on or before
December 31, 2006 , and will include the results of such evaluation in managements
annual report on internal control over financial reporting to be included in its Annual Report on Form 10-KSB as of December 31, 2006. In
addition, the Company anticipates that its independent registered public accounting firm
will complete and provide to the Company such firms attestation report on
managements assessment of the Companys internal control over financial
reporting on December 31, 2006, and the Company will also include such
attestation report to its Annual Report on Form 10-KSB.

Because of the material weakness
described below, as well as other deficiencies the Company has identified, the CEO and CFO
have concluded that the Companys disclosure controls and procedures were not
effective as of December 31, 2004 . The Company has already instituted, and will continue
to implement, corrective actions with respect to the material weakness, as described below
in further detail. In addition, the Company has implemented various procedures to correct
and/or mitigate the other deficiencies the Company has identified. The Company believes
that the actions it has taken to date in this regard, when taken as a whole, have
mitigated the material weakness and other deficiencies with respect to the preparation of
this Annual Report on Form 10-KSB such that the information required to be disclosed in
this Form 10-KSB has been recorded, processed, summarized and reported correctly.

# Internal Control over
Financial Reporting

The Companys management,
including the CEO and CFO, is in the process of conducting its evaluation of the
effectiveness of its internal control over financial reporting based on the framework in
Internal Control  Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on preliminary results to date, management
has identified a material weakness in internal control over financial reporting as of
December 31, 2004

The material weakness identified
relates to limitations in the capacity of the Companys accounting resources to
identify and react in a timely manner to new accounting pronouncements and non-routine and
complex business transactions. In 2004, a lack of experienced personnel in the
Companys accounting functions resulted in untimely identification and resolution of
(i) accounting matters related to Stock transactions (ii) the accounting for the
Companys debt financing. All of these resulted in significant adjustments to the
financial statements before issuance. In order to remediate these internal control
deficiencies, the Company is making the following changes:

| |  | Hiring
of additional accounting resources to supplement the internal accounting staff.
| | - | --------------------------------------------------------------------------------------

| |  | Implemented a new policy creating a monthly review of our financial entries &
procedures by hiring a CPA Firm to assure all entries are accurate and entered properly.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

As the Company has not completed the
testing and evaluation of its internal control over financial reporting, it is possible
that additional deficiencies could be determined to be individually or in aggregate a
material weakness.

Other than the changes discussed
above, there have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter of 2004 that have materially affected, or are
reasonably likely to materially affect our internal control over financial reporting.

PART III

ITEM
9.   Directors, Executive Officers, Promoters and Control Persons

Executive Officers and
Directors

The executive officers and Directors
of the Company are as follows:

James A. Wheeler (CEO &
Director), age 44.James is a senior executive with 20 years experience in operations:
call center, human resources and administration management. James has extensive expertise
in telecom, information technologies and web-based systems. Over the years, but not
currently, as CEO of a consulting firm in Las Vegas, NV a company that offers management
consulting to start-ups, turn-a-rounds and operations, James negotiated new contracts and
assigned personnel to projects. He also led staff to timely completion of projects which
included being a consultant to a web-based company, and established company website for
retail market and inventory controls and negotiated service level agreements with web
companies. From June 2002 to present he has been CEO and a Director of SkyBridge Wireless,
Inc., our subsidiary company located in Las Vegas, NV in the business of being a Fixed
Wireless Service Provider. From August 1999 to December 2002 Mr. Wheeler was the President
of Executive Management Services, a company located in Las Vegas, NV, in the business of
consulting with start-up companies, turn-a-rounds and operations. He has a AA degree in
Business Administration, 1981  N/W Nazarene University, Nampa, ID, and a BA Business
Administration, 2000  Americus University, Washington, D.C. and MBA Business
Administration, 2002  Americus University, Washington, D.C.

Jason Neiberger (President &
Director), age 32. Jason has worked with Computer Network and Internet systems, for 10
years. From June 2002 to present Jason Neiberger is the President and Director of
SkyBridge Wireless, Inc., our subsidiary company located in Las Vegas, NV in the business
of being a Fixed Wireless Service Provider. From July 2000 to July 2002 Jason Neiberger
was the CTO and General Manager of LANwaves, Inc., a company located in Las Vegas, NV in
the business of being a Fixed Wireless Service Provider. From April 1997 to July 2000
Jason Neiberger was IT Director of TechnoTwist, LLC and Secure Independence, Inc., a
company located in Las Vegas, NV in the business of being a national Internet Service
Provider. He holds various certifications as follow:

CompuMaster, Microsoft Solution Provider, 1998
Denver, CO
Certification MCP

CompuMaster, Microsoft Solution Provider 1998
Denver, CO
Certification MCP

CompuMaster, Microsoft Solution Provider, 1999
Chicago, IL
Certification MCP

Cisco Career Certifications, 1999
Los Angeles, CA
CCNA

-10-

Two Rivers Technologies, 1999
Las Vegas, NV
Certification of Telecommunications Fundamentals

KarlNet, Inc., 2001
Dublin, OH
Certification  RF Techniques and Deployment

Proxim / Western, 2002
Las Vegas, NV
Certification  RF Equipment Training and Deployment

MapleNet, Inc., 2003
Goshen, IN
Certification  Wireless Technician

RF Systems & Associates, 2004
Las Vegas, NV
Certification  RF Communications

Kristine Neiberger (Secretary
& Treasurer),age 24, Kristine, Jasons wife, has worked with in business
management for approximately three years. From June 2002 to present Kristine Neiberger is
the Secretary and Treasurer of SkyBridge Wireless, Inc., our subsidiary company located in
Las Vegas, NV in the business of being a Fixed Wireless Service Provider. From May 2000 to
March 2002 Kristine Neiberger was the Office Manager and Business Development Manager of
Digital Color & Graphics, a company located in Anaheim, CA in the business of Graphic
design and development. She has a Bachelor of Science degree from Riverside Community
College Riverside, CA, 2000, in General Accounting.

Gene Crusie (Director), age 35.Gene Crusie is the co-founder and Chief Technical Officer at MapleNet, Inc., located
in  Goshen, Indiana, a company that is in the business of Internet related
business. He has a Bachelor of Science degree in electrical engineering, 1994, from Purdue
University, as well as a Bachelor of Science degree in organizational management from
Goshen College, 1996. He is an owner and Chief Technical Officer at Maple Net from 1999 to
present.

Section 16(a) Disclosure

Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires our officers, directors and persons who
beneficially own more than ten percent of a registered class of our equity securities to
file reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Officers, directors and ten percent shareholders
are charged by SEC regulation to furnish us with copies of all Section 16(a) forms they
file. We believe that, during the fiscal year ended December 31, 2004, all filing
requirements applicable to our executive officers, directors and ten percent shareholders
were fulfilled.

ITEM 10. Executive
Compensation

The Company has not adopted a final
bonus, stock option, stock issuance, profit sharing, or deferred compensation plan for the
benefit of its employees, officers, directors or consultants. Because there is nothing
further to disclose under this Item, the Company has not prepared a Summary Compensation
Table as would otherwise be required, except the following is the salary to officers for
this past year ended December 31, 2004:

*James Wheeler
           $ 33,000 **Jason Neiberger          $ 62,540 Kristine Neiberger           $
10,000

*
Does not include unpaid accrued salary of $147,000. ** Does not include unpaid accrued
salary of $87,460.

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

The following table sets forth
information, to the best of the Companys knowledge, as of March 1, 2005 with respect
to each person known to own directly and/or beneficially 5% or more of the common capital
stock of the Company, each Director and officer and all Directors and officers as a group.
As of March 1, 2005, there were a total of 487,298,627 common shares issued and
outstanding.

-11-

|Title of
Class: Common | Name and Address
of Beneficial Owner | Amount and Nature of
Beneficial Ownership | Percent
of Class
|---------------------- | ------------------------------------ | ----------------------------------------- | ----------------
|                       | James Wheeler                        | 170,000,000                               | 34.8%           
|                       |                                      |                                           |                 
|                       | PO Box 96507                         | Direct                                   
|                       |                                      |                                           |                 
|                       | Las Vegas, NV 89193                 
|                      
|                       |                                      |                                           |                 
|                       | Jason Neiberger(1)                   | 170,000,000                               | 34.8%I          
|                       |                                      |                                           |                 
|                       | 6565 Spencer St Suite 205            | Direct                                   
|                       |                                      |                                           |                 
|                       | Las Vegas, NV 89119                 
|                      
|                       |                                      |                                           |                 
|                       | Gene Crusie                          | 3,000,000                                 | 0%              
|                       |                                      |                                           |                 
|                       | 6565 Spencer St Suite 205           
|                       |                                      |                                           |                 
|                       | Las Vegas, NV 89119                 
|                      
|                       |                                      |                                           |                 
|                       | Kristine Neiberger(1)                | 150,000                                   | 0%              
|                       |                                      |                                           |                 
|                       | 6565 Spencer St Suite 205            | Direct                                   
|                       |                                      |                                           |                 
|                       | Las Vegas, NV 89119                 
|                      
|                       |                                      |                                           |                 
|                       | All directors, officers and         
|                       |                                      |                                           |                 
|                       | Persons owning 5% or more            | 343,150,000                               | 70.4%           
|                       |                                      |                                           |                 
|                       | As a group                          

(1)    
          Kristine and Jason are husband
and wife and so may vote their shares together, though they disclaim
beneficial ownership of one anothers stock.

ITEM 12. Certain
Relationships and Related Transactions

N-E-T Service Corporation
 In September 2003, the Company entered into an agreement (NET
Transaction) to acquire 100% of the outstanding capital stock of N-E-T Service
Corporation (NET), in exchange for 500,000 shares of the Companys common
stock totaling $47,000. Prior to the transaction, the only asset of NET was a distribution
license with an Oregon company for a voice over IP system used in connection with the
internet. The system would allow businesses to connect their phone systems through the
internet.

During February 2004, the Company
issued the 500,000 shares to complete the acquisition of the NET Transaction. During March
2004, management of the Company concluded the future economic value of the distribution
license could not be estimated, and accordingly, recorded a loss related to the
acquisition of NET totaling $47,000.

A consultant to the Company,
Bud Wheeler, is the father to James Wheeler. All compensation and arrangements
with Bud Wheeler are approved by the Board of Directors. Kristine Neiberger is the wife of
Jason Neiberger.

ITEM 13.   Exhibits and
Reports on Form 8-K

| | (a) | Exhibits.
| | --- | ---------

|Exhibit
Number | Description                                                                                               
|-------------- | ----------------------------------------------------------------------------------------------------------
|10.9           | Communications Site License Agreement with Rio Properties, Inc. dated September 25 , 2002                 
|10.10          | Communications Site License Agreement with LVH Corporation D/B/A as Las Vegas Hilton dated April 17, 2003.
|10.11          | Communications Site License Agreement with Frontier Radio, Inc. dated June 11, 2003                       
|10.12          | Communications Site License Agreement with Dev Ton International dated November 10, 2003                  
|10.13          | Communications Site License Agreement with AAT Communications Group dated October 22, 2004                
|10.14          | Communications Site License Agreement with Marnell Corrao Associates, Inc. dated November 17, 2004        
|10.15          | Communications Site License Agreement with Harrah's Las Vegas, Inc. dated November 17, 2004.              
|31.1           | Certification pursuant to section 302 of the Sarbanes - Oxley Act Of 2002.                                
|31.2           | Certification pursuant to section 302 of the Sarbanes - Oxley Act Of 2002.                                
|32.1           | Certification of Officer pursuant to section 906 of the Sarbanes - Oxley Act Of 2002.                     
|32.2           | Certification of Officer pursuant to section 906 of the Sarbanes - Oxley Act Of 2002.                     

| | (b) | Reports
on Form 8-K.
| | --- | --------------------

None.

-12-

ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees, for the years
ended December 31, 2003, and 2004, respectively, for professional services of our
principal accountant for the audit of our financials and reviews are: $12,100 and $ 22,330
..

Audit-Related Fees

None.

Tax Fees

The aggregate tax fees, for the years
ended December 31, 2003, and 2004, respectively, for professional services of our
principal accountant for the audit of our financials and reviews are: $0 and $ 1,700 .

All Other Fees

None.

Audit Committee

The board of directors acting as the
audit committee is required to pre-approve the audit services preformed by the independent
auditor in order to assure that the provision of such service do not impair the
auditors independence.

Hours By Others

None.

SIGNATURES

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

|Dated: March 31, 2005 |  | SkyBridge Wireless, Inc.(Registrant)BY: /s/ James Wheeler
James WheelerCEOBY: /s/ Jason Neiberger
Jason NeibergerPresident
|--------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

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

|Dated: March 31, 2005 |  | SkyBridge Wireless, Inc.(Registrant)BY: /s/ James Wheeler
James WheelerPrincipal Executive Officer 
                                      Principal Financial Officer
                                      Director   BY: /s/ Jason Neiberger
Jason Neiberger Director
|--------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-13-

---

SKYBRIDGE WIRELESS, INC.(A
 DEVELOPMENT STAGE COMPANY) CONSOLIDATED FINANCIAL
STATEMENTS

TABLE OF CONTENTS

|                                                        | PAGE NO.
|------------------------------------------------------- | --------
|Report of Independent Registered Public Accounting Firm | F-1     
|Consolidated financial statements                      
|Consolidated balance sheet                              | F-2     
|Consolidated statements of operations                   | F-3     
|Consolidated statements of stockholders' deficit        | F-4     
|Consolidated statements of cash flows                   | F-5     
|Consolidated notes to financial statements              | F-6     

---

# REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and StockholdersSkyBridge Wireless, Inc. (A Development Stage
Company)Las Vegas, Nevada

We have audited the accompanying
consolidated balance sheet of SkyBridge Wireless, Inc. (A Development Stage Company) as of
December 31, 2004, and the related consolidated statements of operations,
stockholders deficit, and cash flows for the years ended December 31, 2004 and 2003
and for the period from December 20, 2002 (Date of Inception) through December 31, 2004.
These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of SkyBridge Wireless, Inc. as of December 31, 2004, and the results of
its activities and cash flows for the years ended December 31, 2004 and 2003 and for the
period from December 31, 2002 (Date of Inception) through December 31, 2004 in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the Company has
suffered losses from operations and current liabilities exceed current assets, all of
which raise substantial doubt about its ability to continue as a going concern.
Managements plans in regards to these matters are also described in Note 1. The
consolidated financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

L.L. Bradford &
Company, LLCFebruary 22, 2005Las Vegas, Nevada

-F-1-

---

SKYBRIDGE WIRELESS, INC.(A
DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE
SHEET DECEMBER 31, 2004

|                                                                  | 
|----------------------------------------------------------------- | 
|ASSETS                                                            | 
|Current assets                                                    | 
|Cash                                                              | 
|Accounts receivable                                               | 
|                                                                  | 
|Total current assets                                              | 
|Fixed assets, net                                                 | 
|Loan fees, net                                                    | 
|                                                                  | 
|Total assets                                                      | 
|                                                                  | 
|LIABILITIES AND STOCKHOLDERS' DEFICIT                             | 
|Current liabilities                                               | 
|Accounts payable and accrued liabilities                          | 
|Due to related parties                                            | 
|Other liability                                                   | 
|                                                                  | 
|Total current liabilities                                         | 
|Long-term liabilities                                             | 
|Convertible debentures, net of discounts                          | 
|                                                                  | 
|Total liabilities                                                 | 
|Minority interest                                                 | 
|Commitments and contingencies                                     | 
|Stockholders' deficit                                             | 
|Common stock; $0.001 par value; 1,000,000,000 shares              | 
|authorized; 484,298,627 shares issued and 483,698,627 outstanding | 
|Additional paid-in capital                                        | 
|Unamortized loan fees related to convertible debentures           | 
|Unamortized loan fees related to equity credit agreement          | 
|Prepaid services paid in common stock                             | 
|Accumulated deficit during the development stage                  | 
|                                                                  | 
|Total stockholders' deficit                                       | 
|                                                                  | 
|Total liabilities and stockholders' deficit                       | 
|                                                                  | 

-F-2-

SKYBRIDGE WIRELESS,
INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS
OF OPERATIONS

|                                                             | For the year
ended
December 31, 2004 | For the year
ended
December 31, 2003 | December 20, 2002
(Inception) through
December 31, 2004
|------------------------------------------------------------ | ------------------------------------ | ------------------------------------ | -------------------------------------------------------
|Revenue                                                      |                                      |                                      | $                                                      
|Cost of revenue (exclusive of depreciation                   |                                      |                                     
|shown separately below)                                      |                                      |                                      |                                                        
|                                                             |                                      |                                      |                                                        
|Gross income (loss)                                          |                                      |                                     
|                                                             |                                      |                                      |                                                        
|Operating expenses                                           |                                      |                                     
|Depreciation                                                 |                                      |                                      |                                                        
|Consulting and professional fees                             |                                      |                                      |                                                        
|Other general and administrative expenses                    |                                      |                                      |                                                        
|                                                             |                                      |                                      |                                                        
|Total operating expenses                                     |                                      |                                      |                                                        
|                                                             |                                      |                                      |                                                        
|Loss from operations                                         |                                      |                                      |                                                        
|Other income (expenses)                                      |                                      |                                     
|Interest expense                                             |                                      |                                      |                                                        
|Amortization of loan fees related to convertible             |                                      |                                     
|debentures                                                   |                                      |                                      |                                                        
|Loss related to acquisition of NET                           |                                      |                                      |                                                        
|Other income                                                 |                                      |                                      |                                                        
|Bad debt related to other receivable                         |                                      |                                      |                                                        
|Minority Interest                                            |                                      |                                      |                                                        
|Entertainment Internet acquisition cost                      |                                      |                                      |                                                        
|                                                             |                                      |                                      |                                                        
|Loss before provision for income taxes and minority interest |                                      |                                      |                                                        
|Provision for income taxes                                   |                                      |                                      |                                                        
|Minority interest                                            |                                      |                                      |                                                        
|                                                             |                                      |                                      |                                                        
|Net loss                                                     |                                      |                                      | $                                                      
|                                                             |                                      |                                      |                                                        
|Basic and diluted loss per common share                      |                                      |                                      | $                                                      
|                                                             |                                      |                                      |                                                        
|Basic and diluted weighted average                           |                                      |                                     
|common shares outstanding                                    |                                      |                                      |                                                        

-F-3-

# SKYBRIDGE WIRELESS,
INC.                                                       (A DEVELOPMENT STAGE COMPANY)
                                            CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
DEFICIT

|                                                | Common Stock |  |  |             |   |   |         |  
|----------------------------------------------- | ------------ |  |  | ----------- | - | - | ------- | -
|
|Balance at December 20, 2002 (Inception)        |              |  |  | --          |   | $ | --      |  
|Issuance of common stock to founders for        |              | 
|services, $0.001                                |              |  |  | 330,000,000 |   |   | 330,000 |  
|Net loss                                        |              |  |  | --          |   |   | --      |  
|                                                |              |  |  |             |   |   |         |  
|Balance December 31, 2002                       |              |  |  | 330,000,000 |   |   | 330,000 |  
|Issuance of common stock for acquisition of     |              | 
|The Entertainment Internet, Inc., $0.001        |              |  |  | 76,554,120  |   |   | 76,554  |  
|Issuance of common stock for cash               |              |  |  | 15,150,000  |   |   | 15,150  |  
|Cancellation of common stock                    |              |  |  | (75,000,000 | ) |   | (75,000 | )
|Issuance of common stock for services           |              |  |  | 54,350,000  |   |   | 54,350  |  
|Issuance of common stock in satisfaction        |              | 
|of due to related party                         |              |  |  | 60,000      |   |   | 60      |  
|Options granted for services                    |              |  |  | --          |   |   | --      |  
|Issuance of common stock for other receivable   |              |  |  | 600,000     |   |   | 600     |  
|Bad debt related to other receivable            |              |  |  | --          |   |   | --      |  
|Reduction in due to related party               |              | 
|through paid-in capital                         |              |  |  | --          |   |   | --      |  
|Net loss                                        |              |  |  | --          |   |   | --      |  
|                                                |              |  |  |             |   |   |         |  
|Balance December 31, 2003                       |              |  |  | 401,714,120 |   |   | 401,714 |  
|Exercise of options                             |              |  |  | 3,170,833   |   |   | 3,171   |  
|Common shares issued for NET acquisition        |              |  |  | 500,000     |   |   | 500     |  
|Common shares issued for prepaid                |              |  |  | 16,000,000  |   |   | 16,000  |  
|Common shares issued for services               |              |  |  | 14,150,000  |   |   | 14,150  |  
|Common shares issued to the Chief Executive     |              |  |  | 40,000,000  |   |   | 40,000  |  
|Officer for services                            |              | 
|Common shares issued for accounts payable       |              |  |  | 75,000      |   |   | 75      |  
|Cancellation of common stock                    |              |  |  | (350,000    | ) |   | (350    | )
|Return of stock into treasury                   |              |  |  | (600,000    | ) |   | (600    | )
|Liability for shares to be issued for loan fees |              |  |  | --          |   |   | --      |  
|Common shares issued for loan fees related to   |              | 
|convertible debentures                          |              |  |  | 6,000,000   |   |   | 6,000   |  
|Common shares issued for unamortized loan       |              | 
|fees related to equity credit agreement         |              | 
|(including $5,000 paid in cash                  |              |  |  | 3,038,674   |   |   | 3,039   |  
|Options granted for services                    |              |  |  | --          |   |   | --      |  
|Beneficial conversion feature of convertible    |              | 
|debenture                                       |              |  |  | --          |   |   | --      |  
|Current period amortization of loan fees        |              | 
|related to debentures                           |              |  |  | --          |   |   | --      |  
|Current period amortization of prepaid services |              |  |  | --          |   |   | --      |  
|Net loss                                        |              |  |  | --          |   |   | --      |  
|                                                |              |  |  |             |   |   |         |  
|Balance December 31, 2004                       |              |  |  | 483,698,627 |   | $ | 483,699 |  
|                                                |              |  |  |             |   |   |         |  

-F-4-

SKYBRIDGE WIRELESS,
INC.                                                         (A DEVELOPMENT STAGE
COMPANY)                                                     CONSOLIDATED STATEMENTS OF
CASH FLOWS

|Cash flows from operating activities:                   | For the year
ended
December 31, 2004 | For the year
ended
December 31, 2003 | December 20, 2002
(Inception) Through
December 31, 2004 |            |   |  
|------------------------------------------------------- | ------------------------------------ | ------------------------------------ | ------------------------------------------------------- | ---------- | - | -
|Net loss                                                |                                      |                                      | $                                                       | (2,695,476 | ) | $
|Adjustments to reconcile net loss to                    |                                      |                                     
|net cash used by operating activities:                  |                                      |                                     
|Stock based compensation                                |                                      |                                      |                                                         | 1,153,446  |   |  
|Entertainment Internet acquisition costs                |                                      |                                      |                                                         | --         |   |  
|Loss related to acquisition of NET                      |                                      |                                      |                                                         | 47,000     |   |  
|Depreciation                                            |                                      |                                      |                                                         | 29,112     |   |  
|Amortization of loan fees related to convertible        |                                      |                                     
|debentures                                              |                                      |                                      |                                                         | 22,733     |   |  
|Amortization of prepaid services paid in common stock   |                                      |                                      |                                                         | 466,137    |   |  
|Bad debt related to other receivable                    |                                      |                                      |                                                         | --         |   |  
|Accretion of discount on convertible debentures         |                                      |                                      |                                                         | 25,976     |   |  
|Changes in operating assets and liabilities             |                                      |                                     
|Change in accounts receivable                           |                                      |                                      |                                                         | (2,335     | ) |  
|Change in accounts payable and accrued liabilities      |                                      |                                      |                                                         | 44,144     |   |  
|Change in loan fees                                     |                                      |                                      |                                                         | (66,750    | ) |  
|                                                        |                                      |                                      |                                                         |            |   |  
|Net cash used by operating activities                   |                                      |                                      |                                                         | (976,013   | ) |  
|Cash flows from investing activities:                   |                                      |                                     
|Purchase of fixed assets                                |                                      |                                      |                                                         | (24,527    | ) |  
|                                                        |                                      |                                      |                                                         |            |   |  
|Net cash used in investing activities                   |                                      |                                      |                                                         | (24,527    | ) |  
|Cash flows from financing activities                    |                                      |                                     
|Proceeds from issuance of common stock                  |                                      |                                      |                                                         | --         |   |  
|Change in due to related parties                        |                                      |                                      |                                                         | 453,702    |   |  
|Change in other liability                               |                                      |                                      |                                                         | --         |   |  
|Advance from convertible debentures                     |                                      |                                      |                                                         | 475,000    |   |  
|Loan fees related to equity line of credit              |                                      |                                      |                                                         | (5,000     | ) |  
|Exercise of stock options                               |                                      |                                      |                                                         | 95,125     |   |  
|Cash received through acquisition                       |                                      |                                     
|of Entertainment Internet                               |                                      |                                      |                                                         | --         |   |  
|                                                        |                                      |                                      |                                                         |            |   |  
|Net cash provided by financing activities               |                                      |                                      |                                                         | 1,018,827  |   |  
|Net change in cash                                      |                                      |                                      |                                                         | 18,287     |   |  
|Beginning cash balance                                  |                                      |                                      |                                                         | 156        |   |  
|                                                        |                                      |                                      |                                                         |            |   |  
|Ending cash balance                                     |                                      |                                      | $                                                       | 18,443     |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Supplemental disclosure of cash flow:                   |                                      |                                     
|Cash paid for interest                                  |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Cash paid for income taxes                              |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Schedule of non-cash investing and financing activities |                                      |                                     
|Issuance of 7,655,412 shares of common stock for        |                                      |                                     
|acquisition of Entertainment Internet                   |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 60,000 shares of common stock for           |                                      |                                     
|payment of due to related party                         |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 600,000 shares of common stock for          |                                      |                                     
|other receivable                                        |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Reduction in due to related party through paid-in       |                                      |                                     
|capital                                                 |                                      |                                      | $                                                       | --         |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 75,000 shares of common stock for           |                                      |                                     
|accounts payable                                        |                                      |                                      | $                                                       | 3,000      |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Beneficial conversion feature related to convertible    |                                      |                                     
|debentures recorded as discount on convertible          |                                      |                                     
|debentures                                              |                                      |                                      | $                                                       | 309,000    |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Assumption of $500,000 liability related to stock to be |                                      |                                     
|issued for loan fees                                    |                                      |                                      | $                                                       | 500,000    |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 6,000,000 shares of common stock to be      |                                      |                                     
|unamortized loan fees related to convertible debentures |                                      |                                      | $                                                       | 180,000    |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 3,038,674 shares of common stock for        |                                      |                                     
|unamortized loan fees related to equity credit          |                                      |                                     
|agreement, (excluding $5,000 paid in cash)              |                                      |                                      | $                                                       | 55,000     |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Issuance of 16,000,000 shares of common stock for       |                                      |                                     
|prepaid services                                        |                                      |                                      | $                                                       | 620,000    |   | $
|                                                        |                                      |                                      |                                                         |            |   |  
|Check sum                                               |                                      |                                      |                                                         | --         |  

-F-5-

# SKYBRIDGE WIRELESS,
INC. (FORMERLY KNOWN AS ENTERTAINMENT INTERNET, INC.)(A DEVELOPMENT STAGE COMPANY)NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

1.    
          DESCRIPTION OF BUSINESS, HISTORY, AND SUMMARY OF SIGNIFICANT POLICIES

| | Description
of business  SkyBridge Wireless, Inc. (hereinafter referred to as the
Company) is a development stage company incorporated on December 20, 2002
under the laws of the state of Nevada. The business purpose of the Company is to develop a
wireless network which provides access to the internet.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | History
 Entertainment Internet, Inc. (ENIN) was incorporated in Nevada on April
20, 1992 under the name of West Tech Services, Inc. ENIN underwent several amendments
until 1998, when it changed its name to Entertainment Internet, Inc. and became inactive
after 2000. On November 20, 2000, ENIN filed a voluntary petition for bankruptcy in the
United States Bankruptcy Court under Chapter 11. ENIN emerged from bankruptcy under
Chapter 7 pursuant to a Bankruptcy Court Order entered on November 28, 2001 with no
remaining assets or liabilities.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
March 31, 2003, ENIN consummated an agreement to acquire all of the outstanding capital
stock of SkyBridge Wireless, Inc., in exchange for 330,000,000 shares of the
Companys common stock (ENIN Transaction). Prior to the ENIN Transaction,
ENIN was a non-operating public shell company with no operations, nominal net assets and
76,554,120 shares of common stock issued and outstanding; and SkyBridge Wireless, Inc. was
a development stage company. The ENIN Transaction is considered to be a capital
transaction in substance, rather than a business combination. Inasmuch, the ENIN
Transaction is equivalent to the issuance of stock by a development stage company
(SkyBridge Wireless, Inc.) for the net monetary assets of a non-operational public shell
company (Entertainment Internet, Inc.), accompanied by a recapitalization. The accounting
for the ENIN Transaction is identical to that resulting from a reverse acquisition, except
goodwill or other intangible assets will not be recorded. The Company recognized an
acquisition cost of $7,449, which is the net balance of the par value of the issuance of
common stock related to the ENIN Transaction totaling $7,655 less the cash received from
ENIN totaling $206. Accordingly, these consolidated financial statements are the
historical financial statements of SkyBridge Wireless, Inc.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Going
concern  The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company is in the
development stage and incurred a net loss of approximately $2,695,000 for the year ended
December 31, 2003, with an accumulated loss during the development stage of approximately
$4,799,000. The Companys current liabilities exceed its current assets by
approximately $1,563,000 as of December 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These
conditions give rise to substantial doubt about the Companys ability to continue as
a going concern. These consolidated financial statements do not include adjustments
relating to the recoverability and classification of reported asset amounts or the amount
and classification of liabilities that might be necessary should the Company be unable to
continue as a going concern. The Companys continuation as a going concern is
dependent upon its ability to obtain additional financing or sale of its common stock as
may be required and ultimately to attain profitability.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Managements
plan, in this regard, is to raise financing of approximately $5,000,000 through a
combination of equity and debt financing. Management believes this amount will be
sufficient to finance the continuing development for the next twelve months. However,
there is no assurance that the Company will be successful in raising such financing.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Amended
articles of incorporation  In March 2003, a Certificate of Amendment to the
Articles of Incorporation changed the number of authorized shares of common stock to
100,000,000. In September 2003, a Certificate of Amendment to the Articles of
Incorporation changed the authorized shares from 100,000,000 shares to 1,000,000,000
shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-F-6-

1.    
          DESCRIPTION OF BUSINESS, HISTORY, AND SUMMARY OF SIGNIFICANT POLICIES(continued)

| | Stock
split  In September 2003, the Companys Board of Directors adopted a
resolution whereby it approved a 10-to-1 stock split of the issued and outstanding shares
of common stock. Accordingly, the accompanying consolidated financial statements have been
retroactively restated to reflect the stock splits as if such stock splits occurred as of
the Companys date of inception.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Principals
of consolidation  The accompanying consolidated financial statements include the
accounts of SkyBridge Wireless and accounts of N-E-T Service Corporation
(NET). All significant intercompany transactions have been eliminated in
consolidation.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Reclassification
 The financial statements from 2003 reflect certain reclassifications, which have no
effect on net income, to conform to classifications in the current year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fixed
assets  Fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided principally on the straight-line method over the estimated useful
lives of the assets which is primarily 3 years. The cost of repairs and maintenance is
charged to expense as incurred. Expenditures for property betterments and renewals are
capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected in other
income (expense).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company periodically evaluates whether events and circumstances have occurred that may
warrant revision of the estimated useful life of fixed assets or whether the remaining
balance of fixed assets should be evaluated for possible impairment. The Company uses an
estimate of the related undiscounted cash flows over the remaining life of the fixed
assets in measuring their recoverability.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Advertising
and marketing costs  The Company recognizes advertising and marketing costs in
accordance with Statement of Position 93-7 Reporting on Advertising Costs.
Accordingly, the Company expenses the costs of producing advertisements at the time
production occurs, and expenses the costs of communication advertising in the period in
which the advertising space or airtime is used. Advertising costs are charged to expense
as incurred. Advertising expenses was $16,834 and $4,385 for the years ended December 31,
2004 and 2003, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
value of financial instruments  The carrying amounts and estimated fair values
of the Companys convertible debentures at December 31, 2004 are as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                       | Carrying
Amounts | Estimated
Fair Value
|---------------------- | ---------------- | --------------------
|Convertible debentures |                  |                     

| | The
estimated fair values of the Companys long-term liabilities were based on quoted
market rates. The carrying values of all other financial instruments approximate their
fair value.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-F-7-

1.    
          DESCRIPTION OF BUSINESS, HISTORY, AND SUMMARY OF SIGNIFICANT POLICIES(continued)

| | Income
taxes  The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, which requires recognition of deferred tax assets
and liabilities for future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their
respective tax bases and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of December 31, 2004, the Company has available net operating loss carryforwards that will
expire in various periods through 2024. Such losses may not be fully deductible due to the
significant amounts of non-cash service costs and the change in ownership rules under
Section 382 of the Internal Revenue Code. The Company has established a valuation
allowance for the full tax benefit of the operating loss carryovers due to the uncertainty
regarding realization.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Comprehensive
loss  The Company has no components of other comprehensive loss. Accordingly,
net loss equals comprehensive loss for all periods.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | Segment
information  The Company discloses segment information in accordance with SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information, which uses
the Management approach to determine reportable segments. The Company operates under one
segment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Stock-based
compensation  The Company applies Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees, and Related
Interpretations, in accounting for stock options issued to employees. Under APB No.
25, employee compensation cost is recognized when estimated fair value of the underlying
stock on date of the grant exceeds exercise price of the stock option. For stock options
and warrants issued to non-employees, the Company applies SFAS No. 123, Accounting
for Stock-Based Compensation. SFAS No 123 requires the recognition of compensation
cost using a fair value based method whereby compensation cost is measured at the grant
date based on the value of the award and is recognized over the service period, which is
usually the vesting period. The Company uses the Black-Scholes pricing model to calculate
the fair value of options and warrants issued to non-employees. Stock issued for
compensation is valued using the market price of the stock on the date of the related
agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2003, the Company cancelled all previously granted options to employees and
currently has no outstanding warrants. The Company granted no options or warrants to
employees for compensation for the years ended December 31, 2004 and2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
loss per common share  The Company computes net loss per share in accordance
with SFAS No. 128, Earnings per Share and SEC Staff Accounting Bulletin No. 98. Under the
provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average number of
shares of common stock outstanding during the period. The calculation of diluted net loss
per share gives effect to common stock equivalents, however, potential common shares are
excluded if their effect is antidilutive. For the years ended December 31, 2004 and 2003
and for the period from December 20, 2002 (Inception) through December 31, 2004, no shares
were excluded from the computation of diluted earnings per share because their effect
would be antidilutive.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Minority
interest  Minority interest on the consolidated balance sheet includes
third-party investments in NET that the Company consolidates, but does not wholly-own. The
net pre-tax results attributed to minority interest holders in consolidated entities are
included in minority interest income (expense) in the consolidated statements of
operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-F-8-

1.    
          DESCRIPTION OF BUSINESS, HISTORY, AND SUMMARY OF SIGNIFICANT POLICIES(continued)

| | New
accounting pronouncements  Financial Accounting Standards Board Interpretation
No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting
Research Bulletin No. 51, Consolidated Financial Statements, addresses consolidation by
business enterprises of variable interest entities. It is effective immediately for
variable interest entities created after January 31, 2003. It applies in the first fiscal
year or interim period beginning after June 15, 2003, to variable interest entities
acquired before February 1, 2003. The implementation of Interpretation No. 46 did not have
a material effect on the Companys consolidated financial statements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2003, the FASB issued SFAS No. 149, Amendment of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 149 amends SFAS No. 133 for
decisions made (1) as part of the Derivatives Implementation Group process that
effectively required amendments to SFAS No. 133, (2) in connection with other Board
projects dealing with financial instruments, and (3) in connection with implementation
issues raised in relation to the application of the definition of a derivative. The
Statement clarifies under what circumstances a contract with an initial net investment
meets the characteristics of a derivative discussed in paragraph 6(b) of SFAS No. 133,
clarifies when a derivative contains a financing component, amends the definition of
underlying to conform it to language used in FASB Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others, and amends certain other existing pronouncements. Those changes
will result in more consistent reporting of contracts as either derivatives or hybrid
instruments. This statement is effective for contracts entered into or modified after June
30, 2003 and for hedging relationships designated after June 30, 2003. The implementation
of SFAS No. 149 did not have a material effect on the Companys consolidated
financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity. SFAS No. 150 establishes standards for how
an issuer classifies and measures certain financial instruments with characteristics of
both liabilities and equity. In addition, the statement requires an issuer to classify
certain instruments with specific characteristics described in it as liabilities. This
statement is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003. The implementation of SFAS No. 150 did not have a material effect on
the Companys consolidated financial statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets, an amendment of
APB No. 29, Accounting for Nonmonetary Transactions. SFAS 153 requires exchanges of
productive assets to be accounted for at fair value, rather than at carryover basis,
unless (1) neither the asset received nor the asset surrendered has a fair value that is
determinable within reasonable limits or (2) the transactions lack commercial substance.
SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. The Company does not expect the adoption of this standard
to have a material effect on its financial position, results of operations or cash flows.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2004, the FASB issued Statement 123 (revised 2004) which is a revision of FASB
Statement No. 123, Accounting for Stock-Based Compensation. This Statement supersedes APB
Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance. This Statement establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or services that
are based on the fair value of the entitys equity instruments or that may be settled
by the issuance of those equity instruments. This Statement focuses primarily on
accounting for transactions in which an entity obtains employee services in share-based
payment transactions. This Statement requires a public entity to measure the cost of
employee services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service in exchange for
the award  the requisite service period (usually the vesting period). The Company
files as a small business issuer and must meet the requirements of this Statement for
accounting periods after December 15, 2005. The Company is evaluating SFAS 123R and
believes it may have a material effect on the Companys consolidated financial
statements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-F-9-

2.    
          BUSINESS ACQUISITION

| | N-E-T
Service Corporation  In September 2003, the Company entered into an agreement
(NET Transaction) to acquire 100% of the outstanding capital stock of N-E-T
Service Corporation (NET), in exchange for 500,000 shares of the
Companys common stock totaling $47,000. Prior to the transaction, the only asset of
NET was a distribution license with an Oregon company for a voice over IP system used in
connection with the internet. The system would allow businesses to connect their phone
systems through the internet.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued the 500,000 shares to complete the acquisition of the
NET Transaction. During March 2004, management of the Company concluded the future
economic value of the distribution license could not be estimated, and accordingly,
recorded a loss related to the acquisition of NET totaling $47,000.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company accounted for its 100% ownership interest in NET using the purchase method of
accounting under APB No. 16. During June 2004, the Company issued a stock dividend of
1,000,000,000 shares of NETs common stock to various stockholders and itself whereby
the Companys 100% ownership interest decreased to 61%. The Company has recorded a
minority interest from this transaction with no balance due to the lack of operations or
balance sheet accounts as of December 31, 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. FIXED ASSETS

Fixed
assets consist of the following as of December 31, 2004:

|                                 | 
|-------------------------------- | 
|Computer, equipment and software | 
|Less: accumulated depreciation   | 
|Fixed assets, net                | 

4.    
          RELATED PARTY TRANSACTIONS

| | Due
to related parties  December 31, 2004, due to related parties is comprised of
balances totaling $582,716 and $480,900 from the founders of the Company and a stockholder
of the Company, respectively. The balances bear no interest, are unsecured and due on
demand.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
December 2003, the founders of the Company converted $75,664 in due to related parties
into additional paid-in capital. The founders of the Company did not receive common stock
for this conversion.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Rent
 The Company operates from a leased facility on a month-to-month basis, currently
$1,500 per month, which is leased from a stockholder of the Company. For the years ended
December 31, 2004 and 2003, rent expense totaled $18,000 and $18,000, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Common
Stock  During May 2004, the Company issued 40,000,000 shares of common stock to
the Companys Chief Executive Officer for services totaling $680,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company issued 75,000 shares of common stock to a stockholder for
accounts payable totaling $3,000.
| | ----------------------------------------------------------------------------------------------------------------------------

| | During
March 2004, the Company issued 2,000,000 shares of common stock to a stockholder for
services totaling $100,000.
| | -----------------------------------------------------------------------------------------------------------------------

-F-10-

4.    
          RELATED PARTY TRANSACTIONS (continued)

| | Common
Stock (continued)  During November 2004, the Company issued 2,000,000 shares of
common stock to a stockholder for services totaling $80,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | During
December 2004, the Company issued 5,000,000 shares of common stock to a stockholder for
services totaling $85,000.
| | -------------------------------------------------------------------------------------------------------------------------

| | Stock
options  In April 2003, the Company granted options to purchase 52,000,000
shares of the Companys common stock to various officers and directors. The options
are fully vested upon grant with an exercise price of $0.011 per share. The Company did
not record compensation under the provisions of APB Opinion No. 25. In August 2003, the
various officers and directors surrendered their options to the Company and the Company
cancelled all the above options.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2003, the Company granted options to purchase 20,000,000 shares of the
Companys common stock to a stockholder of the Company. The options are fully vested
upon grant with an exercise price of $0.011. The grant was valued at $108,042 under the
provisions of SFAS No. 123 using the Black-Scholes option pricing model under the
following assumptions; no dividend yield, expected volatility of 91.67%, risk free
interest rates of 1.6%, and expected life of 2 years.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2003, the Company granted options to purchase 10,000,000 shares of the
Companys common stock to a director. The options are fully vested upon grant with an
exercise price of $0.011. The grant was valued at $54,021 under the provisions of SFAS No.
123 using the Black-Scholes option pricing model under the following assumptions; no
dividend yield, expected volatility of 91.67%, risk free interest rates of 1.6%, and
expected lives of 2 years. In August 2003, the director surrendered his options to the
Company and the Company cancelled these options.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the company granted options to purchase 4,000,000 shares of the
Companys common stock to a stockholder. the options are fully vested upon grant with
an exercise price of 40.03 per share. The grant was valued at $26,996 under the provisions
of SFAS No. 123. During February 2004, this stockholder exercised a portion of the above
options to purchase 3,170,833 shares of the Companys common stock for $95,125.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.    
          OTHER LIABILITY

| | During
March 2004, the Company entered into an agreement with May Davis Group, Inc. (May
Davis) whereby May Davis agreed to provide placement services with respect to
securities up to $5,000,000. Placement may be made by debentures, restricted stock,
registered offerings, including equity lines, or other transactions. The Company agreed to
issue 10,000,000 shares of common stock in exchange for these services. From the date of
the agreement through the date of this report, May Davis placed $500,000 in convertible
debentures and brokered an equity line of credit for up to $4,500,000 as discussed in
Notes 6 and 8 below. As of December 31, 2004, the Company had not issued stock in relation
to this agreement. Accordingly, the Company recorded an other liability totaling $500,000,
reported as $50,000 for unamortized loan fees related to convertible debentures and
$450,000 for unamortized loan fees related to equity credit agreement (See Notes 6 and 8
below for discussion of amortization policy).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
discussed in Note 11, the Company issued 2,000,000 shares of common stock during February
2005 in satisfaction of $100,000 of this liability.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

-F-11-

6.    
          CONVERTIBLE DEBENTURES

| | During
April 2004, the Company entered into an agreement with May Davis as a placement agent to
underwrite and sell up to $1,000,000 in convertible debentures. Each debenture sold will
be convertible by the holder on or after the issue date at the lesser of (i) 75% (or 60%
for stock under Rule 144) of the lowest three intraday bid prices during the twenty
trading days immediately preceding notice of conversion or (ii) 120% of the closing bid
price on the date of issuance. In addition, each debenture will be unsecured, bearing an
interest rate of 8% per annum, and will mature 5 years from the date of issuance. The
Company will also pay loan fees of 13% of the gross proceeds to May Davis for each issued
debenture along with certain other fees to be paid to an escrow agent. Additionally, the
Company issued 2,000,000 and 4,000,000 shares of common stock during April and November
2004, respectively, to May Davis for unamortized loan fees related to convertible
debentures totaling $180,000. The Company recorded cash loan fees totaling $66,750 in
relation to the convertible debentures.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company capitalizes cash loan fees related to convertible debentures in the asset section
of the balance sheet and loan fees related to the issuance of common stock in the equity
section of the balance sheet. All loan fees related to convertible debentures are
amortized as interest expense on a pro-rata basis over the life of the debentures.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As
of December 31, 2004 capitalized loan fees consisted of the following:

|                                                        | Loan Fees | Accumulated
Amortization | Net Loan Fees
|------------------------------------------------------- | --------- | ------------------------ | -------------
|Loan fees, net                                          |           |                          | $            
|Unamortized loan fees related to convertible debentures |           |                         
|Loan fees related to allocation of 10,000,000           |           |                         
|shares (See Note 5)                                     |           |                          | $            
|Loan placement fees related to issuance of              |           |                         
|6,000,000 shares                                        |           |                          |              
|Total unamortized loan fees related to                  |           |                         
|convertible debentures                                  |           |                          | $            

| | Additionally,
the Company recorded the estimated value of the beneficial conversion feature as a
discount on convertible debentures which will be accreted through the maturity date of
each respective convertible debenture. Any remaining discount at the time of early
conversion, if any, will be immediately expensed.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Convertible
debentures consist of the following as of December 31, 2004:

|                                                              | 
|------------------------------------------------------------- | 
|Sixteen convertible debentures which will mature in various   | 
|months during 2009                                            | 
|Discount on convertible debentures (net of accretion totaling | 
|$25,976 recorded as interest expense)                         | 
|Convertible debentures, net                                   | 

| | May
Davis completed the placement of the final debenture totaling $25,000 during 2004 for
which the Company received the debenture in 2005 (see Note 11).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

-F-12-

7.    
          STOCKHOLDERS DEFICIT

| | During
December 2002, the Company issued 330,000,000 shares of common stock to the founders of
the Company for consulting services totaling $33,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | During
April 2003, the Company issued 15,000,000 shares of common stock for cash totaling
$250,000.
| | ---------------------------------------------------------------------------------------------------

| | The
Company determined 75,000,000 shares of ENINs common stock was issued in error
during the bankruptcy, as discussed in Note 1. These shares were issued and held by the
Companys transfer agent and were not distributed. In April 2003, the 75,000,000
shares of the Companys common stock were cancelled and recorded as a reduction to
common stock and an increase to additional paid-in capital.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
April 2003, the Company issued 40,000,000 shares of common stock to various individuals
for consulting services totaling $440,000.
| | -----------------------------------------------------------------------------------------------------------------------------------------

| | During
July 2003, the Company issued 150,000 shares of common stock for cash totaling $15,000.
| | ----------------------------------------------------------------------------------------------

| | During
July 2003, the Company issued 350,000 shares of common stock to an individual for
consulting services totaling $47,250
| | -----------------------------------------------------------------------------------------------------------------------------

| | During
October 2003, the Company issued 500,000 shares of common stock for professional services
totaling $35,000.
| | ------------------------------------------------------------------------------------------------------------------

| | During
November 2003, the Company issued 500,000 shares of common stock for professional
services totaling $35,000.
| | -------------------------------------------------------------------------------------------------------------------

| | During
December 2003, the Company issued 13,000,000 shares of common stock for professional and
consulting services totaling $390,000.
| | --------------------------------------------------------------------------------------------------------------------------------------

| | During
July 2003, the Company issued 60,000 shares of common stock for payment of a due to
related party totaling $3,000.
| | -------------------------------------------------------------------------------------------------------------------------

| | During
July 2003, the Company issued 600,000 shares of common stock to an individual for
consulting services totaling $81,000. The individual than terminated the agreement and has
agreed to return the shares to the Company upon payment of services totaling $1,440. The
Company recorded an other receivable for the 600,000 shares totaling $81,000. As of
December 31, 2003, management of the Company evaluated the receivable and determined that
a valuation allowance should be established for the entire balance. Accordingly the
Company recorded bad debt expense related to the receivable totaling $81,000 for the year
ended December 31, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company issued 2,050,000 shares of common stock for services totaling
$103,000.
| | --------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company cancelled 350,000 shares of common stock previously issued to a
consultant during July 2003.
| | -----------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company received 600,000 shares of common stock which was issued during
July 2003 from a consultant after termination of a prior agreement for services. As of
December 31, 2004, the shares were held as treasury stock at no value.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
March 2004, the Company issued 10,500,000 shares of common stock for services totaling
$525,000.
| | -------------------------------------------------------------------------------------------------------

| | During
May 2004, the Company issued 500,000 shares of common stock for services totaling
$15,000.
| | -------------------------------------------------------------------------------------------------

-F-13-

7.    
          STOCKHOLDERS DEFICIT(continued)

| | During
July 2004, the Company issued 1,000,000 shares of common stock for services totaling
$13,000
| | ---------------------------------------------------------------------------------------------------

| | During
August 2004, the Company issued 5,000,000 shares of common stock for services totaling
$90,000
| | -----------------------------------------------------------------------------------------------------

| | During
September 2004, the Company issued 1,000,000 shares of common stock for services totaling
$19,000.
| | ---------------------------------------------------------------------------------------------------------

| | During
November 2004, the Company issued 250,000 shares of common stock for services totaling
$5,000.
| | -----------------------------------------------------------------------------------------------------

| | During
December 2004, the Company issued 350,000 shares of common stock to employees for
services totaling $5,950.
| | ------------------------------------------------------------------------------------------------------------------

| | During
December 2004, the Company issued 500,000 shares of common stock for services totaling
$8,500.
| | -----------------------------------------------------------------------------------------------------

8.    
          EQUITY CREDIT AGREEMENT

| | During
September 2004, the Company entered into a Private Equity Credit Agreement (Equity
Agreement) with Globalvest Partners, LLC (Globalvest) which was brokered
by May Davis. The Equity Agreement entitles the Company to draw funds up to $4,500,000
from the issuance of its common stock for an amount equal to the lowest bid price for any
three trading days during the ten trading days immediately following the advance notice
date. The Equity Agreement expires the later of thirty six months from the date a
registration statement on Form SB-2 for registration of common stock under the Equity
Agreement is declared effective by the Securities Exchange Commission, or September 2008,
subject to certain terms and conditions. Globalvest and May Davis will retain 9% and 7%,
respectively, of each advance under the Equity Agreement. Additionally, the Equity
Agreement requires the Company to pay Globalvest a commitment fee in the amount of
$60,000; $55,000 to be paid by the issuance of common stock and $5,000 cash. The Company
issued 3,038,674 shares of common stock during September 2004 for the $55,000 fee. The
Company recorded the fees as unamortized loan fees related to equity credit agreement
which will be amortized as costs of raising capital over the life of the agreement
beginning from the date the Form SB-2 is declared effective, along with $450,000 in
additional loan fees as discussed in Note 5.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.    
          COMMITMENTS AND CONTINGENCIES

| | Consulting
agreements  During July 2004, the Company entered into a Consulting Agreement
with a stockholder of the Company whereby, the Company agreed to pay the stockholder
$15,000 per month through June 2006.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
March 2004, the Company entered into a Consulting Agreement with an entity whereby, the
Company agreed to issue 10,000,000 shares of non-forfeitable common stock in exchange for
corporate consulting services. In addition, the Company will pay $1,000 per month over the
term of 12 months. In December 2004, the parties amended the agreement to eliminate the
payment of $1,000 per month. The Company issued the stock in March 2004 and recorded
prepaid services totaling $98,630 (net of amortized expenses totaling $401,370) as of
December 31, 2004December 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
August 2004, the Company entered into a Consulting Agreement with an entity whereby, the
Company agreed to issue 5,000,000 shares of non-forfeitable common stock in exchange for
corporate consulting services for the term of 12 months. The Company issued the stock in
August 2004 and recorded prepaid services totaling $55,233 (net of amortized expenses
totaling $34,767) as of December 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
July 2004, the Company entered into a Consulting Agreement with an individual whereby, the
Company agreed to issue stock valued at $100,000 shares of common stock in exchange for
corporate consulting services over the term of 6 months. The Company issued 1,000,000
shares of non-forfeitable common stock totaling $30,000 in July 2004. During October 2004,
the Company and the individual terminated the agreement whereby the Company expensed the
remaining prepaid services for the year ended December 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-F-14-

9.    
          COMMITMENTS AND CONTINGENCIES (continued)

| | Licenses
 The Company has various licenses granting the Company non-exclusive rights to use
certain premises for the installation and maintenance of wireless tower equipment. Minimum
monthly license fees range from $1,000 per month to $2,500 per month and increase annually
by the greater of 5% or a CPI adjustment. Future minimum license payments under the
related agreements are as follows as of December 31, 2004:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           | 
|---------- | 
|2005       | 
|2006       | 
|2007       | 
|2008       | 
|Thereafter | 
|           | 

10. OTHER

| | Network
installation  In May 2003 the Company entered into an Agreement with Independent
Contractor (the Contract) whereby the Company would install a high speed
wireless network on a reservation in Canada. During the year ended December 31, 2003, the
Company completed the installation of the high speed wireless network in Canada whereby
the Company realized a one-time revenue approximating $33,000. The Company has no future
obligations under the Contract nor will receive future revenue from the installation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
October 2004, the Company entered into an Executive Employment Agreement (the
Agreement) with its Chief Executive Officer. The term of the Agreement
commenced in October 2004 with an automatic renewal after three years unless written
notification is sent by either party. Pursuant to the Agreement, the Chief Executive
Officer will receive and annual base salary of $180,000 payable monthly. Additionally, the
Chief Executive Officer will receive certain bonuses if and when the Company reaches
certain milestones as set forth in the agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
October 2004, the Company entered into an Executive Employment Agreement (the
Agreement) with its President. The term of the Agreement commenced in October
2004 with an automatic renewal after three years unless written notification is sent by
either party. Pursuant to the Agreement, the President will receive and annual base salary
of $150,000 payable monthly. Additionally, the President will receive certain bonuses if
and when the Company reaches certain milestones as set forth in the agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11.    
          SUBSEQUENT EVENTS

| | Convertible
debentures  During January 2005, the Company issued an additional convertible
debenture in accordance with the terms discussed in Note 6 totaling $25,000. The
convertible debenture matures in January 2010.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Common
stock  During January 2005, the Company issued 500,000 shares of common stock
for services totaling $9,000.
| | -------------------------------------------------------------------------------------------------------------------

| | During
February 2005, the Company issued 2,000,000 shares of common stock in a $100,000 reduction
in an other liability as discussed in Note 5.
| | -----------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2005, the Company issued 500,000 shares of common stock for services totaling
$5,750.
| | ----------------------------------------------------------------------------------------------------