**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**




**FORM
      10-QSB**


(Mark
      One)


**R******
            **Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
                of 1934**




For
      the
      quarterly period ended March 31, 2006.




** ̈**
            **Transition
                Report pursuant to 13 or 15(d) of the Securities Exchange Act of
                1934**




For
      the
      transition period  to




Commission
      File Number 000-51995




**TELANETIX,
      INC.**


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




**Delaware**
            
            **77-0622733**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (IRS
                Employer Identification No.)**6197
                Cornerstone Court E, Suite 108**
              **San
                Diego, California 92121**(Address
                of principal executive offices)**(858) 362-2250**
              (Issuer's
                telephone number,
              including
                area code)**____________________________________________________________________________****(Former
                name, former address and former fiscal year, if changed since last
                report)**


****




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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.): YES £ NO R




On
      May
      15, 2006, the registrant had outstanding 14,419,667 shares of Common Stock,
      which is the registrant's only class of common equity.





Transitional
      Small Business Disclosure Format (Check one): Yes £ No R











**PART
                I — FINANCIAL INFORMATION**ITEM
                1.
            FINANCIAL
                STATEMENTSITEM
                2.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS ORPLAN
                OF OPERATIONSITEM
                3.
            CONTROLS
                AND PROCEDURES**PART
                II — OTHER INFORMATION**ITEM
                1.
            LEGAL
                PROCEEDINGSITEM
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDSITEM
                3.
            DEFAULTS
                UPON SENIOR SECURITIESITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERSITEM
                5.
            OTHER
                INFORMATIONITEM
                6.
            EXHIBITS
                AND REPORTS ON FORM 8-K








**PART
      I - FINANCIAL INFORMATION**





**ITEM 1.**
            
            **FINANCIAL
                STATEMENTS****TELANETIX,
                INC. AND SUBSIDIARY****(A
                Development Stage Company)****(Formerly
                AER Ventures, Inc.)****Consolidated
                Balance Sheets****March
                31,
                2006**
            
            
            **December
                31, 2005****(Unaudited)**
            
            
            **(Audited)**AssetsCurrent
                Assets:Cash
            
            $
            1,104,377
            
            $
            47,906Accounts
                receivable, less allowancefor
                doubtful accounts of $-0- and $-0-
            
            
            46,555
            
            
            49,305Prepaid
                expenses
            
            
            16,712
            
            
            271Total
                current assets
            
            
            1,167,644
            
            
            97,482Property
                and equipmentFurniture
                and fixtures
            
            
            27,681
            
            
            27,681Computers
                and conference equipment
            
            
            358,050
            
            
            373,278385,731
            
            
            400,959Less:
                accumulated depreciation
            
            
            (270,605
            )
            
            (248,653
            )115,126
            
            
            152,306Deposits
            
            
            15,632
            
            
            18,432Total
                assets
            
            $
            1,298,402
            
            $
            268,220Liabilities
                and Stockholders' DeficitCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            $
            131,258
            
            $
            167,110Accrued
                salaries and wages
            
            
            264,748
            
            
            136,672Accrued
                payroll taxes
            
            
            23,086
            
            
            10,455Accrued
                vacation
            
            
            82,405
            
            
            72,014Accrued
                interest, stockholder
            
            
            78,826
            
            
            59,593Notes
                payable, stockholder
            
            
            1,331,700
            
            
            1,331,700Total
                current liabilities
            
            
            1,912,023
            
            
            1,777,544Deferred
                compensation
            
            
            963,384
            
            
            963,384Stockholders'
                DeficitPreferred
                stock, no par value,10,000,000
                share authorized,none
                issued and outstanding
            
            
            -
            
            
            -Common
                stock, $.0001 par value,200,000,000
                shares authorized,14,419,667
                and 13,482,001 sharesissued
              and outstanding as ofMarch 31,
              2006 and December 31, 2005respectively
            
            
            1,442
            
            
            1,348Additional
                paid in capital
            
            
            5,850,727
            
            
            4,410,321Warrants
            
            
            10,000
            
            
            10,000Deficit
                accumulated during thedevelopment
                stage
            
            
            (7,439,174
            )
            
            (6,894,377
            )Total
                stockholders' deficit
            
            
            (1,577,005
            )
            
            (2,472,708
            )Total
                liabilities and stockholders' deficit
            
            $
            1,298,402
            
            $
            268,220The
                accompanying notes are an integral part of the consolidated financial
                statements.








**TELANETIX,
                INC. AND SUBSIDIARY****(A
                Development Stage Company)****(Formerly
                AER Ventures, Inc.)****CONSOLIDATED
                STATEMENTS OF OPERATIONS****For
                the period****November
                20, 2002****For
                the three**
            
            **For
                the three**
            
            **(Inception)****months
                ended**
            
            **months
                ended**
            
            **through****March
                31, 2006**
            
            **March
                31, 2005**
            
            **March
                31, 2006****(Unaudited)**
            
            **(Unaudited)**
            
            **(Unaudited)**Net
                sales:Product
            
            $
            -
            
            $
            -
            
            $
            70,271Services
            
            
            27,500
            
            
            -
            
            
            60,12527,500
            
            
            -
            
            
            130,846Cost
                of sales:Product
            
            
            -
            
            
            -
            
            
            25,855Services
            
            
            19,942
            
            
            -
            
            
            52,62819,942
            
            
            -
            
            
            78,483Gross
                profit
            
            
            7,558
            
            
            -
            
            
            52,363Operating
                expenses:Payroll
                and related benefits
            
            
            268,730
            
            
            204,154
            
            
            4,326,752Research
                and development
            
            
            -
            
            
            3,350
            
            
            201,961Consulting
                and subcontract
            
            
            85,141
            
            
            324,014
            
            
            783,974Travel
                and entertainment
            
            
            45,324
            
            
            3,015
            
            
            421,726Professional
                fees
            
            
            31,792
            
            
            3,256
            
            
            333,216Trades
                shows
            
            
            -
            
            
            -
            
            
            28,264Rent
            
            
            21,735
            
            
            17,550
            
            
            375,085Utilities
            
            
            1,813
            
            
            1,779
            
            
            35,109Telephone
                and internet
            
            
            13,010
            
            
            18,330
            
            
            297,838Depreciation
            
            
            27,028
            
            
            19,753
            
            
            282,609Other
            
            
            35,049
            
            
            6,579
            
            
            317,663Total
                operating expenses
            
            
            529,622
            
            
            601,780
            
            
            7,404,197Operating
                loss
            
            
            (522,064
            )
            
            (601,780
            )
            
            (7,351,834
            )Other
                income (expense)Gain
                (loss) on disposalof
                fixed assets
            
            
            (4,153
            )
            
            1,795
            
            
            (8,599
            )Interest
                income
            
            
            653
            
            
            243
            
            
            9,342Interest
                expense
            
            
            (19,233
            )
            
            (4,017
            )
            
            (82,483
            )Total
                other income (expense)
            
            
            (22,733
            )
            
            (1,979
            )
            
            (81,740
            )Loss
                before income taxes
            
            
            (544,797
            )
            
            (603,759
            )
            
            (7,433,574
            )Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            5,600Net
                loss
            
            $
            (544,797
            )
            $
            (603,759
            )
            $
            (7,439,174
            )Net
                loss per share - basic and diluted
            
            $
            (0.04
            )
            $
            (0.12
            )
            $
            (1.19
            )Weighted
                average shares outstanding -basic
                and diluted
            
            
            13,789,945
            
            
            5,248,000
            
            
            6,231,793The
                accompanying notes are an integral part of the consolidated financial
                statements.








**TELANETIX,
                INC. AND SUBSIDIARY****(A
                Development Stage Company)****(Formerly
                AER Ventures, Inc.)****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****FOR
                THE PERIOD NOVEMBER 20, 2002 (INCEPTION)****THROUGH
                MARCH 31, 2006**For
                the periodNovember
                20, 2002For
                the three months
            
            For
                the three months
            
            (Inception)ended
            
            ended
            
            ThroughMarch
                31, 2006
            
            March
                31, 2005
            
            March
                31, 2006Cash
                flows from operating activities:Net
                loss
            
            $
            (544,797
            )
            $
            (603,759
            )
            $
            (7,439,174
            )Adjustments
                to net loss to cashprovided
                by operating activities:Depreciation
            
            
            27,028
            
            
            19,753
            
            
            282,609Amortization
                of stock based compensation
            
            
            34,000
            
            
            -
            
            
            110,167Common
                stock issued for services
            
            
            -
            
            
            -
            
            
            120,000Company
                expenses paid directly by shareholders
            
            
            -
            
            
            -
            
            
            6,802Loss
                on disposal of fixed assets
            
            
            4,153
            
            
            -
            
            
            8,599Changes
                in assets and liabilitiesAccounts
                receivable
            
            
            2,750
            
            
            -
            
            
            (46,555
            )Inventory
            
            
            -
            
            
            -
            
            
            -Prepaid
                expenses and deposits
            
            
            (13,641
            )
            
            (15,493
            )
            
            (32,344
            )Accounts
                payable and accrued expenses
            
            
            (35,852
            )
            
            (92,124
            )
            
            131,258Accrued
                salaries and wages
            
            
            128,076
            
            
            -
            
            
            264,748Accrued
                payroll taxes
            
            
            12,631
            
            
            -
            
            
            23,086Accrued
                vacation
            
            
            10,391
            
            
            12,403
            
            
            82,405Accrued
                interest, stockholder
            
            
            19,233
            
            
            (2,824
            )
            
            78,826Customer
                deposit
            
            
            -
            
            
            -
            
            
            -Deferred
                compensation
            
            
            -
            
            
            -
            
            
            963,384Net
                cash used by operating activities
            
            
            (356,028
            )
            
            (682,044
            )
            
            (5,446,189
            )Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            -
            
            
            (20,653
            )
            
            (428,295
            )Proceeds
                from disposal of fixed assets
            
            
            5,999
            
            
            -
            
            
            21,961Net
                cash provided by (used in) investing activities
            
            
            5,999
            
            
            (20,653
            )
            
            (406,334
            )Cash
                flows from financing activities:Proceeds
                from notes payable issued to ashareholder
            
            
            -
            
            
            1,025,000
            
            
            1,411,111Issuance
                of common stock
            
            
            1,406,500
            
            
            -
            
            
            5,646,900Payment
                of notes payable issued to ashareholder
            
            
            -
            
            
            (111,111
            )
            
            (111,111
            )Issuance
                of warrants
            
            
            -
            
            
            -
            
            
            10,000Net
                cash provided by financing activities
            
            
            1,406,500
            
            
            913,889
            
            
            6,956,900Net
                increase (decrease) in cash
            
            
            1,056,471
            
            
            211,192
            
            
            1,104,377Cash
                at beginning of the period
            
            
            47,906
            
            
            4,409
            
            
            -Cash
                at end of the period
            
            $
            1,104,377
            
            $
            215,601
            
            $
            1,104,377Interest
                paid
            
            $
            -
            
            $
            -
            
            $
            3,657Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            3,200Liabilities
                assumed in acquisition of subsidiary
            
            $
            -
            
            $
            -
            
            $
            31,700The
                accompanying notes are an integral part of the consolidated financial
                statements.





TELANETIX,
      INC. AND SUBSIDIARY


(A
      Development Stage Company)


(Formerly
      AER Ventures, Inc.)




NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS




1.
            Summary
                of Business and Significant Accounting Policies




a.
            Summary
                of Business





The
      Company was initially incorporated as AER Ventures, Inc. as a Nevada
      corporation. On August 15, 2005, the Company entered into an Exchange Agreement
      (“ ***Exchange
      Agreement*** ”)
      with
      Telanetix, Inc., a California corporation (“ ***Telanetix-California*** ”),
      a
      company in the business of developing and selling advanced technology and
      services for remote digital conferencing, and certain stockholders of
      Telanetix-California. In connection with the Exchange, Telanetix-California
      became a subsidiary of the Company and the former stockholders of
      Telanetix-California obtained a controlling interest in the Company’s common
      stock. The Exchange was accounted for as a reverse merger.





Effective
      March 2006, the Company effected a reincorporation from Nevada to Delaware
      and
      changed is name from “AER Ventures, Inc.” to “Telanetix, Inc.”





The
      Company is considered a “Development Stage Company” as defined by Statement of
      Financial Accounting Standards No. 7.






b.
            Principles
                of Consolidation





The
      consolidated financial statements contain the accounts of the Company and its
      wholly-owned subsidiary Telanetix-California. All significant intercompany
      balances and transactions have been eliminated.






c.
            Cash
                Flows





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      investments purchased with a maturity of three (3) months or less to be cash
      or
      cash equivalents.






d.
            Accounts
                Receivable





Accounts
      receivable is recorded net of an allowance for expected losses. The allowance
      is
      estimated from historical performance and projections of trends.






e.
            Property
                and Equipment





Property
      and equipment are stated at cost less accumulated depreciation. Depreciation
      is
      provided using straight-line methods based on estimated useful lives of three
      (3) to seven (7) years. Major replacements which extend the useful lives of
      equipment are capitalized and depreciated over the remaining useful life. Normal
      maintenance and repair items are charged to expenses as incurred.






f.
            Income
                Taxes





The
      Company accounts for income taxes under the provisions of Statement of Financial
      Accounting Standards No. 109 - Accounting for Income Taxes, which provides
      for an asset and liability approach in accounting for income taxes. Under this
      approach, deferred tax assets and liabilities are recognized based on
      anticipated future tax consequences, using currently enacted tax laws,
      attributable to differences between financial statement carrying amounts of
      assets and liabilities and their respective tax bases.






g.
            Advertising
                and Promotions





The
      Company expenses all advertising and promotion costs as incurred.







h.
            Shipping
                and Handling Costs





Shipping
      and handling costs include costs associated with delivery of video conferencing
      equipment from the Company’s sole location to each customer’s designated
      location. The Company’s policy is to classify shipping and handling costs as
      part of cost of goods sold in the statements of operations.






i.
            Net
                Loss Per Share





The
      net
      loss per share calculation is based on the weighted average number of shares
      outstanding during the period.






j.
            Revenue
                Recognition





Revenue
      is recognized on the accrual basis of accounting when earned. The Company’s
      primary business generates revenue from selling video conferencing equipment
      and
      servicing the systems. Revenue is recognized only after the systems have been
      installed at the customer’s location and after services have been provided to
      customers and collection of the sale is reasonably assured.






k.
            Stock
                Based Compensation





Prior
      to
      and including the fiscal year ended December 31, 2005, the Company elected
      to
      use the intrinsic value based method and to disclose the pro forma effect of
      using the fair value based method to account for its stock-based compensation.
      As a result of the recent adoption by the Financial Accounting Standards Board
      of SFAS No. 123 (revised 2004) “Share-Based Payment,” or SFAS
      No. 123(R), the Company is now required, beginning in the quarter ending
      March 31, 2006, to apply the fair value method as prescribed in SFAS
      No. 123(R) which requires all share-based payments to employees, including
      grants of employee stock options, to be recognized in the income statement
      based
      on their fair values.






l.
            Use
                of Estimates




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






m.
            Fair
                Value of Financial Instruments




The
      amounts reported for cash, accounts receivable, accounts payable, and other
      financial instruments, none of which are held for trading purposes, are
      considered to approximate fair values based upon comparable market information
      available at the respective balance sheet date.






n.
            Concentration
                of Risks




The
      Company transacts its business with primarily one financial institution. From
      time to time the amount on deposit in this institution may exceed the $100,000
      federally insured limit. The balances are maintained in demand accounts to
      minimize risk.







p.
            Unaudited
                Interim Financial Statements




The
      accompanying unaudited financial statements have been prepared in accordance
      with generally accepted accounting principles for interim financial information
      and conform with instructions to Form 10-QSB and Regulation S-B. They may
      not include all information and footnotes required by generally accepted
      accounting principles for complete financial statements. However, except as
      disclosed herein, there have been no material changes in the information
      disclosed in the notes to the financial statements for Telanetix, Inc. for
      the
      year ended December 31, 2005 included in our filing on Form 10-KSB for the
      year
      ended December 31, 2005. The interim unaudited financial statements should
      be
      read in conjunction with those financial statements.





In
      the
      opinion of management, all adjustments considered necessary for a fair
      presentation, consisting solely of normal recurring adjustments, have been
      made.
      Operating results for the three (3) months ended March 31, 2006 are not
      necessarily indicative of the results that may be expected for the year ending
      December 31, 2006.







2.
            Notes
                Payable, Stockholders





Stockholder
      notes payable consist of the following at March 31, 2006 and December 31,
      2005.






**March 31,**
              **2006**
            
            **December 31,**
              **2005**Note
                payable to a stockholder of the Company, the note is unsecured, due
                on
                demand and non-interest bearing.
            
            $
            31,700
            
            $
            31,700Note
                payable to Mainas Development Corporation, owned by an individual
                who is a
                stockholder of the Company, interest is being charged at 6%, the
                note is
                unsecured and due on demand.
            
            
            1,300,000
            
            
            1,300,000$
            1,331,700
            
            $
            1,331,700




3.
            Deferred
                Compensation




On
      August 12, 2005, five (5) of the Company’s key employees entered into
      deferred compensation agreements for unpaid salaries from 2003 and 2004. The
      agreements stipulate that the unpaid salaries will be deferred until 2007 and
      2008 with 50% of the individual’s deferred compensation paid in each of those
      years. At March 31, 2006, $963,384 of unpaid salaries are recorded as
      deferred compensation and reported as a long-term liability in the accompanying
      financial statements.






4.
            Income
                Taxes




The
      Company has had no taxable income under Federal or State tax laws. As of
      December 31, 2005, the Company had loss carryforwards totaling $4.3 million
      that
      may be offset against future federal income taxes. If not used, the
      carryforwards will expire between 2021 and 2024. Due to the Company incurring
      large net operating losses, a valuation allowance has been provided to reduce
      the deferred tax assets from the net operating losses to zero. Therefore, no
      tax
      benefits are recognized in the accompanying statement of
      operations.





5.
            Warrants




In
      July
      2005, the Company sold warrants to two individuals for a total of $10,000.
      The
      agreements allow each of the individuals to purchase up to 150,000 shares each
      of the Company’s common stock. The warrant to purchase the first 100,000
      shares may be exercised at $1.80 per share and expire, if not exercised, on
      June 30, 2008 and the warrant to purchase up to 50,000 additional
      shares may be exercised at $1.25 per share and expire, if not exercised, on
      March 31, 2008. The warrants outstanding at March 31,
      2006 are exercisable for a total of 300,000 shares of  the
      Company’s common stock .






6.
            Lease
                Commitment




The
      Company leases its office space under a long-term operating lease. Rent expense
      for the three (3) months ended March 31, 2006 and 2005 was $21,735 and $17,750,
      respectively.





The
      following is a schedule of future non-cancelable minimum rental payments
      required under operating leases that have initial or remaining lease terms
      in
      excess of one (1) year at March 31, 2006.




2006
            
            $
            81,9842007
            
            
            84,5202008
            
            
            28,904$
            195,408




7.
            Stock
                Based Compensation




On
      August 15, 2005, in connection with the Exchange Agreement discussed in
      Note 1, the Company adopted the AER Ventures, Inc. 2005 Equity Incentive Plan
      (the " ***2005
      Plan*** ").
      Under
      the terms of the Exchange Agreement, all outstanding options under
      Telanetix-California's 2001 Equity Incentive Plan were cancelled in
      exchange for new options with similar terms granted under the 2005 Plan.





The
      compensation cost that has been charged against income for the 2005 Plan was
      $34,000 and $-0- for the three (3) months ended March 31, 2006 and 2005,
      respectively. The total income tax benefit recognized in the statements of
      operations for share-based compensation arrangements was $-0- for the three
      (3)
      months ended March 31, 2006 and 2005 due to a valuation allowance to reduce
      deferred tax assets. See Note 4.





The
      2005
      Plan, which has not yet been approved by the shareholders, permits the
      grant of share options and shares to its employees for up to 5 million
      shares of common stock. The Company believes that such awards better align
      the
      interests of its employees with those of its shareholders. Option awards are
      generally granted with an exercise price that is at least equal to the fair
      market price of the Company’s stock at the date of grant; those option awards
      generally vest based on three (3) years of continuous service and have ten
      (10)
      year contractual terms. Share awards generally vest over three (3) years.






The
      fair
      value of each option award is estimated on the date of grant using the Black
      Scholes option valuation model that uses the assumptions noted in the following
      table. Because the Black Scholes option valuation model incorporates ranges
      of
      assumptions for inputs, those ranges are disclosed. Expected volatilities are
      based on implied volatilities from traded options on the Company’s stock,
      historical volatility of the Company’s stock, and other factors. The Company
      uses historical data to estimate option exercise and employee termination within
      the valuation model. The expected term of options granted is derived from
      estimates and represents the period of time that options granted are expected
      to
      be outstanding. The risk-free rate for periods within the contractual life
      of
      the option is based on the U.S. Treasury yield curve in effect at the time
      of
      grant.




**2005**
            
            **2004**Expected
                volatility
            
            .1%
            
            .1%Weighted-average
                volatility
            
            .1%
            
            .1%Expected
                dividends
            
            0%
            
            0%Expected
                terms (in years)
            
            5-8
            
            5-8Risk-free
                rate
            
            3.5%-6%
            
            2.1%-3.4%





A
      summary
      of option activity under the 2005 Plan from January 1, 2005 through March 31,
      2006, and changes during the periods then ended is presented below:





**Options**
            
            **Shares**
            
            
            **Weighted-**
              **Average**
              **Exercise**
              **Price**
            
            **Weighted-**
              **Average**
              **Remaining**
              **Contractual**
              **Term**
            
            **Aggregate**
              **Intrinsic**
              **Value**Outstanding
                at January 1, 2005
            
            2,851,512
            
            
            $
            .20Granted
            
            1,500,000
            
            
            
            .41Exercised
            
            (480,000
            )
            
            
            -0-Forfeited
                or expired
            
            (220,000
            )
            
            
            -0-Outstanding
                at December 31, 2005
            
            3,651,512
            
            
            $
            .17
            
            7.6
            
            $
            620,000Granted
            
            -0-
            
            
            
            -0-Exercised
            
            (
                -0-
            )
            
            
            -0-Forfeited
                or expired
            
            (
                -0-
            )
            
            
            -0-Outstanding
                at March 31, 2006
            
            3,651,512
            
            
            $
            .17
            
            7.3
            
            $
            110,167




The
      weighted-average grant-date fair value of options granted during the years
      2005
      and 2004 was $.41 and $-0-, respectively. The total intrinsic value of options
      exercised during the years ended December 31, 2005 and 2004 was $120,000
      and $-0-, respectively.





A
      summary
      of the status of the Company’s non-vested shares as of March 31, 2006, and
      changes during the year ended December 31, 2005 and the three (3) months
      ended March 31, 2006 is presented below:




**Nonvested
                Shares**
            
            **Shares**
            
            
            **Weighted-Average**
              **Grant-Date**
              **Fair
                Value**Nonvested
                at January 1, 2005
            
            2,182,712
            
            
            $
            -0-Granted
            
            1,500,000
            
            
            
            .41Vested
            
            (2,229,725
            )
            
            
            .03Forfeited
            
            (220,000
            )
            
            
            -0-Nonvested
                at December 31, 2005
            
            1,232,987
            
            
            $
            .44Granted
            
            -0-
            
            
            
            -0-Vested
            
            (190,571)
            
            
            
            .18Forfeited
            
            -0-
            -
            
            
            -0-Nonvested
                at March 31, 2006
            
            1,042,416
            
            
            
            .49




As
      of
      March  31, 2006, there was $514,833 of total unrecognized compensation cost
      related to nonvested share-based compensation arrangements granted under the
      2005 Plan. That cost is expected to be recognized over a weighted-average period
      of 2.50 years. The total fair value of shares vested during the three (3) months
      ended March 31, 2006 and 2005 was $34,000 and $-0-, respectively.






8.
            Development
                Stage and Operating Deficits




As
      shown
      in the accompanying financial statements, the Company incurred a net loss of
      $544,797 during the three (3) months ended March 31, 2006 and accumulated
      losses of $7,439,174 since opening for business. The Company’s current
      liabilities exceed its current assets by $744,379 at March 31, 2006. These
      factors create an uncertainty as to the Company’s ability to continue as a going
      concern. The ability of the Company to continue as a going concern is dependent
      upon the success of raising additional capital through the issuance of common
      stock and the ability to generate operating revenue. The financial statements
      do
      not include any adjustments that might be necessary should the Company be unable
      to continue as a going concern.





9.
            Subsequent
                Event




Effective
      May 16, 2006, the Company amended the vesting schedule of stock options held
      by
      its Chief Operating Officer and Chief Financial Officer, Richard M. Ono, to
      acquire 600,000 shares of common stock to provide that all options are vested
      as
      of May 16, 2006. In the quarter ending June 30, 2006, the Company will recognize
      $413,333 of salary expense due to the amended vesting of these stock
      options.





**ITEM 2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS
                OR****PLAN
                OF OPERATIONS**




**FORWARD
      LOOKING STATEMENTS**




*This
      quarterly report on Form 10-QSB includes “forward-looking statements” within the
      meaning of the “safe-harbor” provisions of the Private Securities Litigation
      Reform Act of 1995. Such statements are based on management’s current
      expectations and are subject to a number of factors and uncertainties that
      could
      cause actual results to differ materially from those described in the
      forward-looking statements. All statements other than historical facts included
      in this report, including without limitation, statements under “Plan of
      Operation”, regarding our financial position, business strategy, and plans and
      objectives of management for the future operations, are forward-looking
      statements. Although we believe that the expectations reflected in such
      forward-looking statements are reasonable, we can give no assurance that such
      expectations will prove to have been correct. Important factors that could
      cause
      actual results to differ materially from the Company’s expectations include, but
      are not limited to, market conditions, competition and the ability to
      successfully complete financing. The discussion and analysis of our plan of
      operation should be read in conjunction with the financial statements and the
      related notes in our filing on Form 10-KSB for the year ended December 31,
      2005.*




**OVERVIEW**




We
      develop and market high end video conferencing solutions. Our solutions are
      designed to create a fully immersive and interactive environment that integrates
      audio, video, and data from multiple locations into a single environment
      regardless of geographic boundaries. Our Digital Presence TM technology delivers full size, face-to-face images of real-time video, audio,
      and data in high quality resolution at 30 frames per second. Our solutions
      are
      based on next generation standards. We have developed our own high resolution
      coders and encoders implementing advanced MPEG-4 compression on a Linux
      platform. We also take advantage of decentralized IP multicasting in lieu of
      legacy conferencing bridges. Our solutions are designed to be simple to use,
      and
      allow customers to set up a conference with an intuitive touch screen
      interface.




We
      have
      been a development stage company and are now making the transition to
      operations. During 2005 we completed development of our initial video
      conferencing solution and commenced initial product sales. Our revenues are
      principally derived from the sale of videoconferencing products and services.
      Our product sales include items such as computers, monitors, speakers, cameras
      and microphones and related hardware devices. Service revenue is derived from
      the provision of network connectivity and related services. Generally, services
      are offered under the terms of one year agreements, which call for payment
      on a
      monthly basis.





Entering
      2006 our primary business objectives have been to secure working capital to
      fund
      operations and to develop channel sales relationships with audio video resellers
      and systems integrators. During the three month period ended March 31, 2006,
      we
      raised $1,406,499 from a private placement of common stock at $1.50 per share.
      We also established our initial distributor relationships, focusing on
      partnerships with a very limited number of resellers or Channel Partners, each
      of which will be responsible for all the business in an exclusive territory.
      In
      connection with those relationships we have established five (5) demonstration
      centers across the country. A substantial portion of our business efforts for
      the balance of 2006 will be devoted to establishing initial reference customer
      sales through those channels.




**RESULTS
      OF OPERATIONS**





**Net
      Sales**





Net
      sales
      for the three month period ended March 31, 2006 were $27,500 as compared to
      no
      net sales for the three months ended March 31, 2005.  Net sales for the
      period ended March 31, 2006 were comprised entirely of service sales from
      existing customers. We did not introduce our initial solutions for sale until
      the second quarter of 2005. Accordingly we had no net sales for the period
      ended
      March 31, 2005.





We
      are
      devoting a significant portion of our management resources and efforts to the
      establishment of our Channel Partner network and establishing sales of our
      video conferencing products and services. While we anticipate that sales volume
      will increase as a result of these efforts, we are selling a new product through
      a newly developing sales channel. Furthermore, our sales often require several
      customer meetings and demonstrations. Consequently, sales cycles, closure rates
      and the timing and amount of future revenues are necessarily difficult to
      predict. We anticipate revenues will be inconsistent for at least the next
      twelve (12) months.





**Cost
      of Sales**





Cost
      of
      sales for the three months ended March 31, 2006 were $19,942 as compared to
      no
      cost of sales for the three months ended March 31, 2005. Costs of sales for
      the
      period ended March 31, 2006 were comprised primarily of charges to third party
      network providers.





**Operating
      Expenses**





Operating
      expenses for the three months ended March 31, 2006, were $529,622 as compared
      to
      $601,780 for the three months ended March 31, 2005 representing a decrease
      of
      $72,158 or 12%. The decrease in operating expenses for the period ended March
      31, 2006 is primarily attributable to a decrease in consulting and
      subcontracting expenses of $238,873 over the prior period, offset by an increase
      in payroll and related benefits and travel and entertainment expenses of $64,576
      and $42,309, respectively, over the comparable period for the prior year.





Effective
      May 16, 2006, our Board of Directors elected to accelerate the vesting of
      options held by Richard M. Ono, our Chief Operating Officer and
      Chief Financial Officer. As a result of that acceleration, we will incur a
      non-cash salary expense of $413,333 for the second quarter of 2006. Aside from
      this one-time expense, we expect the level of operating expenses to be
      consistent with our first quarter expenses for the next twelve (12) months.
      We
      presently have five (5) full-time employees. We do not have any present plan
      to
      significantly increase or decrease the number of our employees. At present,
      our
      facilities and equipment are sufficient to support our current level of
      operations. While we have completed development of our initial products, we
      anticipate some continued research and development efforts associated with
      modifications to meet customer requirements as well as maintaining industry
      standards. As a result, research and development expenses are not expected
      to
      change significantly over the next twelve (12) months.





**Interest
      Expense**





Interest
      expense for the three months ended March 31, 2006 was $19,233 as compared to
      $4,017 for the three months ended March 31, 2005, an increase of $15,216 or
      479%. The increase in interest expenses as compared to the comparable period
      last year is attributable to interest accruing on our 6% promissory notes that
      were issued in a private placement transaction in the second quarter of
      2005.





**Net
      Loss**





Net
      loss
      for the three months ended March 31, 2006 was $544,797 as compared to a net
      loss
      of $603,759 for the three months ended March 31, 2005, a decrease of $58,962
      or
      9.8%. The decrease in net loss is attributable primarily to the reduction in
      operation expenses.





We
      expect
      to continue to incur net losses for at least the next twelve (12) months as
      we
      attempt to build our business. With the exception of the non-cash salary expense
      for the second quarter, discussed above, we currently intend to maintain our
      operating expenses consistent with current levels, and hope to increase net
      sales. Any decrease in net losses in the next twelve months will depend upon
      our
      ability to increase net sales and correspondingly gross profit.








**LIQUIDITY
      AND CAPITAL RESOURCES**




As
      of
      March 31, 2006, we had $1,104,377 of cash on hand and a working capital deficit
      of $744,379. At December 31, 2006, we had cash on hand of $47,906 and a working
      capital deficit of $1,680,062.





Cash
      used
      in operations for the three month period ended March 31, 2006 was $356,028.
      This
      was primarily the result of a net loss of $544,797 offset by an increase accrued
      salaries of $128,076, depreciation of 27,028, and amortization of stock based
      compensation of $34,000. We anticipate that our operations will continue to
      use
      cash during the next twelve (12) months.





Cash
      provided by investment activities was $5,999 for the three month period ended
      March 31, 2006, as the result of the sale of some fixed assets. We do not expect
      investment activities to be a significant source or use of cash for the next
      twelve (12) months.





Cash
      provided by financing activities was $1,406,500 as the result of the sale of
      937,666 shares of Common Stock in a private placement transaction. Substantially
      all of our cash to date has been derived from our financing activities. We
      expect a continuation of this trend for the next twelve (12) months as revenues
      from the sale of our products and services continue to ramp.





We
      expect
      our current cash on hand at March 31, 2006 and anticipated revenues will be
      sufficient to fund our operations only until the fourth quarter of 2006. We
      will
      have to raise additional capital from the sale of debt or equity securities
      in
      order to finance our operations during the next twelve (12) months. There are
      no
      commitments or arrangements for other financings in place at this time. There
      is
      no assurance that we will be able to raise additional funds. If we cannot,
      we
      will be forced to curtail our operations or possibly be forced to evaluate
      a
      sale or liquidation of our assets. Even if we are successful in raising
      additional funds, there is no assurance regarding the terms of any additional
      investment. Any future financing may involve substantial dilution to existing
      investors.




As
      reported in the Report of Independent Registered Public Accounting Firm on
      our
      December 31, 2005 financial statements, we have incurred losses from
      inception and have yet to establish profitable operations. These factors, among
      others, raise substantial doubt about our ability to continue as a going
      concern.





**RISK
      FACTORS**




*In
      addition to the other information in this report, you should carefully consider
      the risks described below before investing in our publicly-traded securities.
      The risks described below are not the only ones facing us. Our business is
      also
      subject to the risks that affect many other companies, such as competition,
      technological obsolescence, labor relations, general economic conditions and
      geopolitical changes. Additional risks not currently known to us or that we
      currently believe are immaterial also may impair our business operations and
      our
      liquidity.*






***Risks
      Related To Our Financial Condition:***






***We
      have a limited operating history and we are currently in an early stage of
      operations. We have experienced significant expenditures related to funding
      our
      initial development, and we are currently carrying a net operating loss. If
      our
      business model is not successful, or we are unable to generate sufficient
      revenue to offset our start-up expenditures, we may not become profitable,
      and
      the value of your investment may decline.***






We
      have a
      limited operating history from which to evaluate our business and prospects.
      We
      have generated aggregate net sales of $150,846 from our inception to March
      31,
      2006. For the three month period ended March 31, 2006, we had a net
      loss of ($544,797) and we had a cumulative net loss of ($7,459,174) for the
      period since inception at November 20, 2002 to March 31, 2006. We cannot assure
      you that our future operations will be implemented successfully or that we
      will
      ever be profitable. We have yet to establish significant customer demand
      for our products and may not for a significant period of time, if
      ever, which may result in our inability to continue our operations. If we
      are unable to sustain our operations, we will be forced to cease operations
      entirely. Furthermore, we are experiencing the initial costs and uncertainties
      of development stage companies, including additional expenditures, unforeseen
      costs and difficulties, complications, and delays, all of which must be resolved
      and/or paid without the benefit of a predictable revenue stream. We cannot
      be
      sure that we will be successful in meeting these challenges and addressing
      these
      risks and uncertainties. If we are unable to do so, our business will not be
      successful.






***To
      satisfy our capital requirements, we will seek to raise funds in the public
      or
      private capital markets, which may not be given on terms favorable to us, or
      we
      may not be able to raise funds at all. In the event that we receive funds on
      undesirable terms, or are unable to receive additional funds, we may not be
      able
      to fund our operations and will not be able to continue as a going concern.
      The
      additional funding may have terms which will dilute the value of your
      investment.***






Our
      ability to raise additional funds in the public or private markets will be
      adversely affected if the results of our business operations are not favorable.
      We may seek additional funding through the sale of debt or equity securities.
      We
      cannot assure you that any such funding will be available to us, or if
      available, that it will be available on terms favorable to us. If adequate
      funds
      are not available, we may not be able to continue our operations or implement
      our planned additional research and development activities. As a result, we
      may
      be required to discontinue our operations or curtail our planned sales and
      research and development plans, thereby reducing or eliminating the value of
      our
      equity. If we are successful in obtaining additional funds, the terms of the
      financing may have the effect of diluting your interest in our Company.






***Our
      auditors
      have expressed substantial doubt regarding our ability to continue as a going
      concern. If we are unable to continue as a going concern, we may be required
      to
      substantially revise our business plan or cease operations.***




As
      of the
      date of our most recent audit, which included the fiscal years ended December
      31, 2005 and December 31, 2004, we had not generated sufficient revenues to
      meet
      our cash flow needs. As a result, our auditors have expressed substantial doubt
      about our ability to continue as a going concern. Although we have begun to
      generate revenue, we are still operating at a net loss, and expect to continue
      to incur losses for a period of time. We do not have
      any established source of equity or debt financing. We cannot assure
      you that we will be able to obtain sufficient funds or that we will become
      self-funding. If we cannot continue as a going concern, we may need to
      substantially revise our business plan or cease operations, which may reduce
      or
      negate the value of your investment.




***Risks
      Related To Our Business:***






***We
      face
      competition from much larger and well-established companies.***






We
      face
      competition in the video conferencing industry from much larger and
      well-established companies, including Polycom, Inc., and Tandberg, and new
      entrants such as Hewlett-Packard. These companies have substantial financial
      resources and production, marketing, engineering and other capabilities with
      which to develop, manufacture, market and sell their products. In addition,
      other established or new companies may develop or market products competitive
      with our video conferencing system.






***Lower
      than
      expected market acceptance of our video conferencing system and price
      competition would negatively impact our business.***






We
      have
      yet to establish significant customer acceptance of our products. If the market
      does not accept our products or services, our ability to achieve any level
      of
      profitability would be harmed. Our profitability could also be negatively
      affected in the future as a result of competitive price pressures in the sale
      of
      video conferencing systems, which could cause us to reduce the prices for our
      system. Any such reduction could have an adverse impact on our product margins
      and profitability.






***The
      sales
      cycle for our video conferencing system can be long and unpredictable.***






As
      with
      the sale of any technology to new users, the time from introduction to sale
      of our system can take months as end-users educate themselves on the benefits
      of
      our video conferencing system. Our quarterly revenues and operating results
      depend upon the timing of channel partner orders received during a given quarter
      and the shipment and recognition of resulting revenue during each quarter,
      each
      of which is extremely difficult to forecast. In addition, orders from our
      channel partners are based on the level of demand from end-user customers.
      Any
      decline or uncertainty in end-user demand could significantly negatively impact
      end-user orders, which could in turn negatively affect orders from our channel
      partners in any given quarter.






***We
      face risks
      related to our dependence on channel partners to sell our products.***






We
      have
      invested a significant amount of time and resources selecting, educating and
      training our channel partners on the installation, use and benefits of our
      video
      conferencing system. We will need to continue to devote significant resources
      to
      educate and train our channel partners about the benefits of our product. Our
      channel partners carry videoconferencing products of our competitors from whom
      they derive significant revenues, and although we have received a commitment
      of
      minimum sales levels, our channel partners will be selling our competitor’s
      products as well as our products. These sales may be to customers who would
      otherwise purchase the Company’s videoconferencing system and result in reduced
      sales and profits for the Company.






Our
      agreements with our channel partners are only for one year, and we cannot be
      certain as to future order levels from our channel partners or renewal of such
      agreements. In the event that any of our channel partners does not
      renew its agreement, we will lose that distribution channel and will need
      to identify and secure another source. If we were unable to timely find a
      replacement channel partner or alternative distribution source it would
      materially harm our results of operations.




**ITEM 3.**
            **CONTROLS
                AND PROCEDURES**




**DISCLOSURE
      CONTROLS AND PROCEDURES**




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that the information required to be disclosed by a company in the reports
      that it files or submits under the Securities Exchange Act of 1934, as amended
      (the “ ***Exchange
      Act*** ”)
      is
      recorded, processed, summarized and reported, within the time periods specified
      in the SEC’s rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in the reports that a company files or submits under
      the Exchange Act is accumulated and communicated to the Company’s management,
      including its Principal Executive Officer and Principal Financial Officer,
      as
      appropriate to allow timely decisions regarding required disclosure.




We
      maintain disclosure controls and procedures designed to ensure that material
      information related to our Company is recorded, processed, summarized and
      reported within the time periods specified in the SEC rules and forms.




Under
      the
      supervision of our Chief Executive Officer and our Chief Financial Officer,
      we
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures as of the end of the period covered by this report.
      Based upon that evaluation, our Chief Executive Officer and Chief Financial
      Officer concluded that as of March 31, 2006, the design and operation of
      such disclosure controls and procedures were effective.




**CHANGES
      IN INTERNAL CONTROLS OVER FINANCIAL REPORTING**




During
      the most recent fiscal quarter, we did not experience any changes to our
      internal control over financial reporting (as defined in Rules 13a-15(f) and
      15d-15(f) of the Exchange Act) that has materially affected, or is likely to
      materially affect, our internal control over financial reporting.




**LIMITATIONS
      ON DISCLOSURE CONTROLS AND PROCEDURES**




Our
      management, including our Chief Executive Officer and Chief Financial Officer,
      does not expect that our disclosure controls or internal controls over financial
      reporting will prevent all errors or all instances of fraud. A control system,
      no matter how well designed and operated, can provide only reasonable, not
      absolute, assurance that the control system’s objectives will be met. Further,
      the design of a control system must reflect the fact that there are resource
      constraints, and the benefits of controls must be considered relative to their
      costs. Because of the inherent limitations in all control systems, no evaluation
      of controls can provide absolute assurance that all control issues and instances
      of fraud, if any, within our Company have been detected. These inherent
      limitations include the realities that judgments in decision-making can be
      faulty, and that breakdowns can occur because of simple error or mistake.
      Controls can also be circumvented by the individual acts of some persons, by
      collusion of two or more people, or by management override of the controls.
      Because of the small size of our current operations, supervision of financial
      controls is concentrated in a few individuals and we have limited opportunity
      to
      segregate duties or implement checks and balances. The design of any system
      of
      controls is based in part upon certain assumptions about the likelihood of
      future events, and any design may not succeed in achieving its stated goals
      under all potential future conditions. Over time, controls may become inadequate
      because of changes in conditions or deterioration in the degree of compliance
      with policies or procedures. Because of the inherent limitation of a
      cost-effective control system, misstatements due to error or fraud may occur
      and
      not be detected.




**PART
      II- OTHER INFORMATION**




**ITEM 1.**
            **LEGAL
                PROCEEDINGS**




In
      the
      course of our business, we may become involved in various legal proceedings
      seeking monetary damages and other relief. The amount of the ultimate liability,
      if any, from such claims cannot be determined. However, in the opinion of our
      management, there are no legal claims currently pending or threatened against
      us
      that would be likely to have a material adverse effect on our financial
      position, results of operations or cash flows.




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




In
      March
      2006, we sold 937,666 shares of our common stock at price of $1.50 per share
      to
      ten (10) individuals and institutions, each of whom was an accredited
      investor in a private placement transaction. The proceeds to the Company
      from these sales were $1,406,500. This transaction was exempt from registration
      pursuant to Section 4(2) of the Securities Act. This transaction was
      not conducted in connection with a public offering, and no public solicitation
      or advertisement was made or relied upon by any investors in connection with
      this offering.




**ITEM 3.**
            **DEFAULTS
                UPON SENIOR SECURITIES**




None.




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





On
      March
      15, 2006, the Company held a Special Meeting of the Stockholders (the
      " ***Special
      Meeting*** ")
      to
      vote on the following three proposals:





1.
            To
                reincorporate the Company from a Nevada corporation into a Delaware
                corporation;




2.
            To
                increase the authorized capital from 75,000,000 shares of common
                stock to
                210,000,000 shares of capital stock, 200,000,000 of which are designated
                as common stock, and 10,000,000 shares of which are designated as
                "blank
                check" preferred stock; and




3.
            To
                change the name of the Company from "AER Ventures, Inc." to "Telanetix,
                Inc."




All
      three
      proposals were approved by the stockholders at the Special Meeting. A
      Certificate of Merger effecting the merger of the Company into Telanetix, Inc.,
      a Delaware corporation was filed with the Secretaries of State of Nevada and
      Delaware on March 15, 2006. The foregoing actions are described in further
      detail in the Company's Definitive Proxy Statement on Schedule 14-A filed with
      the Securities and Exchange Commission on March 15, 2006.




The
      number of affirmative votes for, against and abstaining with respect to the
      approved proposals was as follows:




**Proposal**
            
            **For**
            ****
            **Against**
            ****
            **Abstain**Reincorporation
            
            3,875,000
            
            0
            
            3,061,000Increase
                in Authorized Capital
            
            3,875,000
            
            0
            
            3,061,000Name
                Change
            
            3,875,000
            
            0
            
            3,061,000









**ITEM 5.**
            **OTHER
                INFORMATION**




In
        March
        2006, we sold 937,666 shares of our common stock at price of $1.50 per share
        to
        ten (10) individuals and institutions, each of whom was an accredited
        investor in a private placement transaction. The proceeds to the Company
        from these sales were $1,406,500. This transaction was exempt from registration
        pursuant to Section 4(2) of the Securities Act. This transaction was
        not conducted in connection with a public offering, and no public solicitation
        or advertisement was made or relied upon by any investors in connection with
        this offering.


**ITEM 6.**
            **EXHIBITS
                AND REPORTS ON FORM 8-K**




**Exhibit**
              **Number**
            
            **Description**4.1
            Form
                of stock purchase agreement for March 2006 private placement
                transaction.31.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200231.2
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002




On
      March 21,
      2006, we filed a Current Report on form 8-K with respect to the results of
      the
      Special Meeting described in Part II Item 4 above.





**SIGNATURES**




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





TELANETIX,
      INC.


Dated:
      May 19, 2006


By: /s/
      Richard M. Ono


Mr.
      Richard M. Ono


Chief
      Financial Officer