U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549



FORM 10-KSB



[X]     ANNUAL REPORT UNDER SECTION 13 or 15(d) of the

SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2004



[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to____________





Commission File Number: 0-27713





LITEWAVE CORP.

(Name of Small Business Issuer in its Charter)





Nevada,  U.S.A.                                        95-4763671

(State or other Jurisdiction                        (IRS Employer

of Incorporation or Organization)             Identification No.)





1620 West 8th Avenue, Suite 302, Vancouver, BC V6J 1V4

(Address of Principal Executive Offices)



(604) 675-7637

(Issuer's Telephone Number)



Securities registered under Section 12(b) of the Act:



NONE



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



Common Stock

(Title of Class)





Indicate by check mark whether the Registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 ninety (90) days.                                 YES [X]  NO [ ]



Check here if there is no disclosure of delinquent filers in response to Item 405 of Regulation SB is not contained in this form, and no disclosure will be contained, to the best of the Registrant's knowledge, in definitive proxy of information statements incorporated by reference in Part III of the Form

10-KSB or any amendment to this Form 10-KSB.                  [X]





The Issuer's operational revenues for its most recent fiscal year ending December 31, 2004 were $ Nil.  The Issuer's Common Shares outstanding at March 31, 2005 was 57,935,224.  The aggregate market value based on the voting stock held by non-affiliates as of March 31, 2005 was $1,738,056 (based on 57,935,224 shares and on an average of bid and asked prices of $0.03).



Except for the historical information contained herein, the matters set forth in this Form 10-KSB are forward looking statements within the meaning of the "Safe Harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially. These forward-looking statements speak only as of the date hereof and the Company disclaims any intent or obligation to  update these forward-looking statements.



DOCUMENTS INCORPORATED BY REFERENCE

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PART I



ITEM 1.  DESCRIPTION OF BUSINESS



A.  BUSINESS DEVELOPMENT



The Company was incorporated in the State of Nevada on June 30, 1989 under the name "Homefront Safety Services of Nevada Inc." On April 26, 1999, by majority vote of the Shareholders and the Board of Directors, the Company's name was changed to "LITEWAVE CORP."  The Company's executive office is located at 11300 W. Olympic Boulevard, Suite 800, Los Angeles, California 90064, with an office at Suite 302, 1620 West 8th Avenue, Vancouver, B.C. V6J 1V4.



On October 20, 1998, pursuant to the Information Statement filed with the National Association of Security Dealers, Regulations Inc., by the Company under provisions of Section 15(c)2-11 (a)5 of the Securities and Exchange Act of 1934 as amended, the Company received permission for quotation on the National Association of Security Dealers Bulletin Board (NASD OTC-BB). Subsequently, the Company's common shares were eligible to be quoted on the NASD Bulletin Board on October 20, 1998.



The Company is a exploration stage oil and gas company whose primary business during 2004 is engaged in the exploration for and development of natural gas through the acquisition of leases and drilling of gas wells in the States of Kansas, Missouri and Oklahoma, in the United States.  The Bourbon County, Kansas project encompasses approximately 2,895 acres of prospective frontier natural gas lands.  The Vernon County, Missouri project comprises leases for 974 acres.  The Woods County, Oklahoma project covers 157 acres.



The Company holds a 50 percent net working interest in its leases for all the lands and operates the projects, except the Grant County prospect.  The expiration dates for the leases range from dates in 2004 through 2006.  All of the leases may be extended upon the exercise of options on the leases, which requires a well be drilled by each specific due date.  For the years ending December 31, 2004 and 2005, no lease option payments due.



Prior to its current business direction in the oil and gas industry, the Company was a marketing company focused on providing value-added member benefits to affinity membership groups in the United States.  The Company pursued this business during 2001 through 2002.



Prior to 2001, the Company entered into a Technology Purchase and Assignment Agreement to acquire the assets of and the world-wide rights to the technology of International Communications and Equipment, Inc. ("ICE") for the development and delivery of telecom network solutions. The agreement with ICE was rescinded due to lack of progress by both parties in financing and developing the business opportunity envisioned by the agreement with ICE.



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Following its involvement with ICE, the Company had entered into a Letter of Intent dated October 5, 2000 whereby it proposed to acquire one hundred percent of the issued and outstanding shares of AirArmor Inc. of Scottsdale, AZ ("AAI"). The Company advanced a total of US $60,969 for operating expenses to AAI during the due diligence phase. The Company decided not to proceed with the acquisition, entered into a termination agreement on March 5, 2001, settled its outstanding claim for the amount of $6,000 and wrote off the balance of the advances.



On February 23, 2001, the Company announced that it had entered into a letter of Intent to purchase the intellectual property rights in a Booking Engine Software technology, together with all associated computer programs and related computer technology from Panier, S.A., a private arms-length Turks and Caicos Islands company, pursuant to the Asset Purchase Agreement between the Company and Panier executed March 7, 2001.  On March 5, 2001, the Company announced that it entered into a letter of intent to acquire one hundred percent of the issued and outstanding shares of Travel Ties Inc., a Nevada corporation("TTI").



Management deemed that this acquisition was not providing the value originally expected.  The Board of Directors has rescinded the TTI letter of intent and the Panier Asset Purchase Agreement on June 19, 2001, having decided not to proceed any further at this time.  In anticipation of this transaction, the Company had advanced $118,242 to Travel Ties. The Company has written this off believing the amount to be uncollectable, as TTI does not appear to be operational any more.



As a result, Management had been looking for opportunities to establish revenue in other areas.  Recently, several ease agreements have been negotiated, and the Company has commenced oil and gas exploration and development activities.  All of the leasing, development and drilling work is undertaken by contract.



B.  BUSINESS OF THE ISSUER



The Company is a development-stage company whose primary business during 2003 has been in the oil and gas industry, acquiring 50% networking interest in various leases and drilling or planning to drill natural gas wells in the States of Kansas, Missouri and Oklahoma, in the United States.  See Item 2. Description of Property - Disclosure of Oil & Gas Operations.



In addition, the Company participated in a natural gas drilling project on the Northeast Deer Creek Prospect, Grant County, OK.  The AFE cost was estimated at $396,000, with the Company participating for approximately an 6.6% net working interest after return of invested capital of $44,000. The initial well on the Deer Creek Prospect was drilled mid December 2003, testing the Oswego/Big Lime formation at a depth of 3,950 feet.  The Operator encountered oil, gas and water, and the well was fraced and tested to determine if production is possible.   Production has yet to commence, as testing continues to produce too great a degree of water to be classified as an economic producer.



From June through September 2003, the Company engaged McGown Drilling, Inc. to complete drilling a total of nine shallow gas wells to an average depth of approximately 400 feet on 5 groups of leases in Bourbon County, KS.  Four others were started but abandoned.



Operational sources of potential revenue include planned sales natural gas from these shallow gas wells drilled in Bourbon County, Kansas.  Management is completing the negotiation of a Gas Purchase Contract for delivery of natural gas from the wellhead to an established Buyer. The Company intends to construct and install all facilities and a pipeline necessary and required to deliver gas to the Buyer.  The Buyer has agreed to accept delivery of gas in accordance with the provisions of the Contract, subject to the availability of right-of-way and finalization of the Contract.



The Company anticipates that right-of-way and easements, together with rights of ingress and egress necessary for the construction, maintenance, and operation will be available from Bourbon County to construct a natural gas pipeline from the wellhead locations to a measurement station connection at the distribution network delivery point.



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Natural gas normally consists of 80% or more methane with the balance comprising such hydrocarbons as butane, ethane and propane. In some cases it may contain minute quantities of highly poisonous hydrogen sulfide, referred to as "sour gas".  It is thought that this gas eminates from deeper coal beds which release methane gas, which has been subsequently trapped in a 25 foot thick sand formation at the 375 foot level.  Methane is, generally, a sweet gas consisting of 95% methane and thus is normally of pipeline quality.



There are literally hundreds of natural gas producers in America's lower 48 states, many located in Kansas, Oklahoma and Missouri.  Demand for natural gas is high, and competition is somewhat negated due to the high demand.  Of more importance is the ability to minimize surface access costs by identifying and leasing flat, sparsely populated marginal ranch or farmland which makes transportation and access less expensive, together with proximity to major gas transmission lines that have available capacity translating to access to markets.



Oil and gas operations are subject to various United States federal, state and local governmental regulations.  Matters subject to regulation include discharge permits for drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation.  From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas.



The production, handling, storage, transportation and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under federal, state, provincial and local laws and regulations relating primarily to the protection of human health and the environment.



No significant expenditures related to complying with these laws have been incurred by the Company.  The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and the Company is unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.



The Company's business development plan is focused on a strategy for maximizing the long-term exploration and development of our Bourbon County prospects.  To date, execution of the current business plan has largely focused on acquiring prospective leases and drilling initial shallow gas wells on this acreage from which to establish a going forward expansion plan.  As of December 31, 2004 we have spent approximately $246,000 on our Bourbon County, KS, and Woods and Grant Counties, OK prospects, but have written off all but $60,000.



Currently there are no full time employees and two part-time employees who are also officers of our company. We do not expect any material changes in the number of employees over the next 12 month period. We do and will continue to outsource contract employment as needed. However, if we are successful in our initial and any subsequent drilling programs we may retain additional employees.  Given that Litewave is still in the formative stages of this new business direction, if the Company is unable to obtain needed funds or generate anticipated revenues, it could be forced to curtail or cease its activities.



C.  RISK FACTORS



In evaluating the Company, its business and any investment in the Company, readers should carefully consider the following factors.



Our independent auditors have expressed a going concern opinion.



As a result of our lack of revenue and accumulated deficit of $4,217,240 at December 31, 2004, the financial statements accompanying this report have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The financial statements do not include any adjustment that might result from the outcome of this uncertainty.  We have had a limited operating history and have generated no revenues or earnings to date.



We cannot make any assurances that these trends will improve and that we will generate profits from operations. Our short operating history makes it difficult to predict our future financial results.  If we do not begin generating profits, the price of our common stock may suffer and our stockholders may not be able to recover their initial investment.



We may need additional capital with which to implement our business plan.



There is no agreement with any third party to provide such capital.  Based on current plans, it is anticipated that the Company may generate positive cash flow from natural gas sales in 2004.  Such revenue may not continue, however, and additional equity or debt financing may be required in order to continue  operations. In addition, if additional funding is required or it is determined appropriate to raise additional funding in the future, there is no assurance that adequate funding, whether through additional equity financing, debt financing, or other sources, will be available when needed or on acceptable terms.  Further, any such funding may result in significant dilution to existing stockholders. The inability to obtain sufficient funds from operations and external sources when needed would have a material adverse affect on the Company's business, results of operations, and financial condition, the result of which would be that stockholders could lose some or all of their investment.



A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.



A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in the Company's ability to raise capital. Because operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to liquidity and continued operations.  Any reduction in ability to raise equity capital in the future could force the reallocation of funds from other planned uses whch could have a significant negative effect on our business plans and operations, including the ability to continue current operations. If the stock price declines, the Company may not be able to raise additional capital or generate funds from operations sufficient to meet its obligations.



Trading on the OTC Bulletin Board may be sporadic because it is not a stock exchange, and stockholders may have difficulty reselling their shares.



The Company's common stock is quoted on the OTC Bulletin Board. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects.  Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like AMEX.



Because of the early stage of development and the nature of our business, our securities are considered highly speculative.



The Company's securities must be considered highly speculative, generally because of the nature of the business and the early stage of its development.  The Company is engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas.  Our properties are in the exploration stage only and are without known reserves of oil and gas.  Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein.



As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties.



Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. The Company's properties are in the exploration and development stage only and are without proven reserves of oil and gas.  Commercial discoveries may not be made on any of the Company's properties.



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The potential profitability of oil and gas ventures depends upon factors beyond the control of our company.



The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments.  Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect our financial performance.



Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.



The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.



The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.



Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our Company.



Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which it may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.



Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.



In general, exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial



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condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.



We believe that our operations comply, in all material respects, with all applicable environmental regulations.



Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks.



Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.



Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labour, and other risks are involved. We may become subject to liability for pollution or hazards against which it cannot adequately insure or which it may elect not to insure. Incurring any such liability may have a material adverse effect on our financial position and operations.



Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.



The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on the Company, its ability to operate and its profitably.



ITEM 2.  DESCRIPTION OF PROPERTY



The Company sub-lets space located at 11300 W. Olympic Boulevard, Suite 800, Los Angeles, California 90064 at the rate of US $500 per month on a month-to-month basis.  Head office is located at Suite 302, 1620 West 8th Avenue, Vancouver, B.C. Canada V6J 1V4 .  The rent for this space is CDN $1,226 per month, on a month-to-month basis.  Management believes that this space will be adequate for the foreseeable future.



DISCLOSURE OF OIL & GAS OPERATIONS



No estimate of natural gas reserves has been made for the nine wells drilled on the shallow gas formation in Bourbon County, Kansas.  The Buxton #1 well in Grant County, Oklahoma is still being tested to determine if it is capable of sustained production, and no reserve calculation has been made by the operator for that prospect.



None of these wells has been placed into production to date, thus no marketable production of natural gas has occurred and no gross or net productive wells or acreage can be determined at this time.



The Company has the right to a 50 percent net working interest in seventeen leases covering a total of 4,026 undeveloped acres.  The Bourbon County, Kansas project encompasses 2,895 acres of prospective natural gas lands on 11 leases.  The Vernon County, Missouri project comprises 5 leases for 974 acres.  The Woods County, Oklahoma lease covers 157 acres.



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Presently the Company has drilled nine wells in Bourbon County.  In late October 2003, Exact Engineering open-flow tested the wells, and determined that 5 were capable of sustained water free gas flow totaling 90 thousand cubic feet per day, two capable of an estimated 20 mcfpd which could not be measured due to associated water mixed with the gas, one which did not flow and one which had not yet been completed for production testing.



At this date, no contract for delivery has been finalized, thus the Company has no delivery commitments.



ITEM 3.  LEGAL PROCEEDINGS



To the best knowledge of the officers and directors of the Company, neither the Company nor any of its officers or directors are parties to any material legal proceeding and such persons know of no other material legal proceeding or litigation contemplated or threatened.  There are no judgements against the Company or its officers or directors other than as disclosed hereunder.  None of the officers or directors have been convicted of a felony or misdemeanor relating to securities or performance in corporate office.



On October 11, 2002, the District Court of the State of Idaho granted a judgement against the Company and Travel ties Inc. in favour of Recreational Sports and Imports, Inc. ("RS&I")in the amount of $139,133.25, ($120,000 plus costs) together with interest thereon at the rate of 7.25% per annum from the date thereof.



The Judgement arose from a claim by RS&I that they were made promises by Travel Ties Inc. that induced them to subscribe for $120,000 of common stock of Litewave Corp.  RS&I had subscribed for 240,000 shares of Litewave stock at $0.50 per share on May 16, 2001.  On February 2, 2002, the Company had renegotiated the private placement by RS&I to a price of $0.15.  Under the terms

of the renegotiated private placement, the Company was to issue an additional 560,000 shares of common stock at $0.001 per share in order to modify the subscription price from $0.50 per share to $0.15 per share.  The revised subscription price approximated the discounted price of one share of restricted common stock that the Company believes it could have received had it had undertaken a financing of restricted stock on May 16, 2001.  Furthermore, the

Company was required to issue a repayment guarantee to RS&I in the amount of $120,000 that was to become payable by May 31, 2003 provided the shares of common stock cannot were not purchased by current shareholders or third parties.



RS&I did not wait for that date to enact suit in its home State of Idaho, a matter which the Company was not in a position to defend at the time.  As a result of this, the Company has not issued the additional 560,000 shares.



The Company intends to attempt to negotiate a future settlement with RS&I when it is in a position to do so, though there is no certainty that it will be successful in changing the terms of its court-ordered obligations.



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



None

PART II





ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



A.  MARKET INFORMATION



Since October 20, 1998, the Company's stock has been listed for sale on the OTC Bulletin Board.  Pursuant the OTC Bulletin Board Eligibility Rule, the Company was delisted from the OTC Bulletin Board for non-compliance and quoted on the NASD "Pink Sheets" on December 16, 1999.  On September 1, 2000, the Company's



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securities were approved for re-listing on the OTC Bulletin Board. As of December 31, 2002 there were at least thirteen stock brokerage firms making a market in the Company's common stock.  The high ask and low bid prices of the Common Stock of the Company have been as follows:



Quarter Ending:         High ask per share:               Low bid per share:

----------------                    -------------------                     ------------------

March 31, 2002                $0.10                                 $0.03

June 30, 2002                  $0.028                               $0.015

September 30, 2002         $0.02                                $0.014

December 31, 2002          $0.016                              $0.005



Quarter Ending:         High ask per share:               Low bid per share:

----------------                  -------------------                       ------------------

March 31, 2003               $0.02                                 $0.005

June 30, 2003                 $0.21                                 $0.014

September 30, 2003        $0.18                                 $0.066

December 31, 2003         $0.09                                 $0.031



Quarter Ending:         High ask per share:                Low bid per share:

----------------                 -------------------                            ------------------

March 31, 2004                $0.05                               $0.03

June 30, 2004                  $0.25                               $0.015

September 30, 2004         $0.35                               $0.02

December 31, 2004          $0.028                             $0.017



Quarter Ending:         High ask per share:              Low bid per share:

----------------                  -------------------                      ------------------

March 31, 2005                $0.05                              $0.025



The above quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not necessarily represent actual transactions.



B.  HOLDERS



There were approximately 150 holders of the Company's common stock as of December 31, 2004.  Two holders with a total of 7,107,000 shares are affiliates of the Company.



C.  DIVIDENDS



The Company has paid no dividends to date on its common stock. The Company reserves the right to declare a dividend when operations merit.  However, payments of any cash dividends in the future will depend on our financial condition, results of operations, and capital requirements as well as other factors deemed relevant by our board of directors.



D. RECENT SALES OF UNREGISTERED SECURITIES



a)

On April 28, 2004, the Company approved the issuance of 1,500,000 shares of common stock to Douglas McGowan at a price of $0.04 per share for drilling services totaling $60,000.  Shares of common stock issue for other than cash have been assigned amounts equivalent to the fair value of the services or assets received in exchange.



b)

On December 30, 2004, the Company approved the issuance of 15,000,000 shares of common stock to seven parties converted at a price of $0.01, as conversion of notes payable owing in the total amount of $150,000.



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c)

On December 30, 2004, the Company approved the issuance of 9,000,000 shares of common stock to six parties converted at a price of $0.01, as conversion of notes payable previously assigned from an amount owing to a  director in the total amount of $90,000.



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



GENERAL



The Company is a exploration stage oil and gas company whose primary business during 2003 is engaged in the exploration for and development of natural gas through the acquisition of leases and drilling of gas wells in the States of Kansas, Missouri and Oklahoma, in the United States.  The Bourbon County, Kansas project encompasses approximately 2,895 acres of prospective frontier natural gas lands.  The Vernon County, Missouri project comprises leases for 974 acres.  The Woods County, Oklahoma project covers 157 acres.



The Company holds a 50 percent net working interest in its leases for all the lands and operates the projects, except the Grant County prospect.  The expiration dates for the leases range from dates in 2004 through 2006.  All of the leases may be extended upon the exercise of options on the leases, which requires a well be drilled by each specific due date.  For the years ending December 31, 2004 and 2005, no lease option payments due.



On April 30, 2003, the Company announced that its Board of Directors approved a Purchase and Sale Agreement between the Company and Waterton Lakes Hotels (1956) Co. Ltd. ("Waterton Lakes"), a privately held corporation, for an interest in an oil and gas lease in Oklahoma.



Under the terms of the Agreement, Waterton Lakes has assigned a working interest portion equal to 50% in an oil and gas property, known as the Smith Lease, recorded in Woods County record covering 157 mineral acres (more or less) situated on Lots 3 and 4 and E 1/2 of SW 1/4 of Section 31, Township 26 North, Range 13 West, Woods County Oklahoma, USA.  As called for in the Agreement, the Company has made a payment to Waterton Lakes on May 7, 2003, in the amount of $20,000.



The Company and Waterton Lakes plan to acquire additional seismic on the property to further delineate potential hydrocarbon zones.  Records for the nearby Hopeton North field indicate that it contained and produced 17.5 billion cubic feet of natural gas from the Hunton zone.  In the 1960's and early 1970's, the target acreage was explored to a limited extent, but never produced.  The production of substantial quantities of natural gas nearby indicates that the general area is prospective for natural gas production.  Moreover, the preliminary seismic data show the Hunton zone present within the boundaries of the Smith Lease.



If warranted following additional seismic evidence and if the necessary funding is available, the Company and Waterton Lakes plan to drill an initial exploratory gas well on the property to test the Hunton zone.  The drilling depth of the planned well is anticipated to be approximately 6,500 feet, and would be expected to be spudded in the fall of 2003.



Ian D. Lambert, a director of the Company, is the beneficial owner of approximately a 1/6 interest in the 50% net working interest portion of the Woods County, OK, leasehold interest maintained by Waterton Lakes.



Commencing in June, 2003, the Company acquired a 50% net working interest in approximately 1,130 acres of leasehold properties for natural gas exploration in Bourbon County, located in the eastern central area of Kansas, with coverage on 400 acres of leasehold properties extending into Vernon County, Missouri.



The Company has drilled nine shallow gas wells up to September 30, 2003 on a portion of its leasehold property in Bourbon County, Kansas.  A total of five wells have been tested with sustainable daily production volumes totaling 90,000 cubic feet per day.  The wells were drilled by way of a fixed price contract with McGown Drilling Inc. of Mound City, KS, at the rate of $12,000 per completed well.



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Since September 30, 2003, the Company has acquired a 50% net working interest in a further approximately 1,765 acres in the Bourbon County, KS, and approximately 574 acres in the Vernon County, MO, area.



In order to sell the gas production, the Company is seeking the necessary funding to proceed with its plans to implement a supplementary pipeline to carry the natural gas from its leasehold properties to the main transmission line, a distance of some twelve miles, at an estimated cost of construction of $150,000.



Ian D. Lambert, a director of the Company, is the beneficial owner of approximately a 1/7 interest in the 50% net working interest portion of Bourbon County, KS, and Vernon County, MO, oil and gas leasehold interests not acquired by the Company.



The Company participated in a natural gas drilling project on the Northeast Deer Creek Prospect, Grant County, OK.   The AFE cost is estimated at $396,000, with the Company participating for approximately an 6.6% net working interest after return of invested capital of $44,000. The initial well on the Deer Creek Prospect was drilled mid December 2003, testing the Oswego/Big Lime formation at a depth of 3,950 feet.  The Operator encountered oil, gas and water, and the well has been fraced and is still being tested to determine if production is possible.



LIQUIDITY AND CAPITAL RESOURCES



Since its inception, the Company has had virtually no revenues from operations and has relied almost exclusively on shareholder loans and private placements to raise working capital to fund operations. At December 31, 2004, the Company had a working capital deficiency of approximately $495,987 in Notes payable and current Accounts Payable.  Since that date, sufficient shareholder loans have been advanced to fund current operations.  It is anticipated that management will be able to fund the company's base operations by way of shareholder loans and further private placements for up to twelve months.



Based upon the low monthly overhead associated with current operations, the Company believes that it has sufficient cash on hand and financing arrangements made to meet its anticipated needs for working capital, capital expenditures and business expansion for the next twelve months of operations, before any revenues are obtained.  Should the business expand, the Company will need to raise additional capital.



The Company has not established revenues sufficient to cover its operating costs and to allow it to continue as a going concern. A Note to the Financial Statements as at December 31, 2004, states that due to no established source of revenue, there is substantial doubt regarding the Company's ability to continue as a going concern, and as such, the Company is substantially dependent upon its ability to generate sufficient revenues to cover its operating costs.



If the Company needs to raise additional funds in order to fund drilling, acquire property and leases, construct a pipeline, or expansion, develop new or enhanced facilities for production, respond to competitive pressures or acquire complementary products, businesses or technologies, any additional funds raised

through the issuance of equity or convertible debt securities will reduce the percentage ownership of the stockholders of the Company. Stockholders may also experience additional dilution.



Such securities may have rights, preferences or privileges senior to those of the Company's Common Stock.  The Company does not currently have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations.  Any such

indebtedness could contain covenants which would restrict the Company's operations.  There can be no assurance that the Company will be able to secure adequate financing from any source to pursue its current plan of operation, to meet its obligations or to deploy and expand its network development efforts over the next twelve months.  Based upon its past history, Management believes that it may be able to obtain funding from investors or lenders, but is unable to predict with any certainty the amount and/or terms thereof.   If adequate funds are not available or are not available on acceptable terms, the Company may not be able to continue in business, or to a lesser extent, may not be able to take advantage of acquisition opportunities, develop or enhance services or products or respond to competitive pressures.



---





As of the date of this filing, no natural gas sales revenue has been generated by the Company.  Accordingly, no table showing percentage breakdown of revenue by business segment or product line is included.



Capital Requirements & Use of Funds



The Company will be seeking financing of at least $200,000 to over the next six months to continue with the expansion of oil and natural gas properties and to build a supplementary pipeline to sell its natural gas. There is no guarantee that the Company will actually be able to complete such financing within that period, or at all.  Should this funding not be raised, it would put the ability for the Company to pursue its business plan at risk (See Risk Factors).



Corporate uses of funds shall include but not be limited to the

following:



- administration and operational expenses.

- corporate overhead expenses necessary to maintain the Company's operations.

- acquisition of additional oil and natural gas properties

- lease acquisition costs for potential oil and gas leases.

- construction costs to build a supplementary pipeline to sell its natural gas

- undertake further seismic work program for the Smith lease

- drilling more shallow gas wells in Kansas and Missouri.



The next phase of funding is anticipated to require approximately $200,000 to $500,000, depending upon pipeline construction scheduling and further drilling plans. Capital is expected to be raised in stages, as the financing climate permits. Should this funding not be raised, it would put the ability for the Company to pursue its business plan at risk (See Risk Factors).



The following discussion and analysis explains the financial condition for the period from January 1, 2004 to December 31, 2004, which supplements the financial statements and related notes for that period and the audited financial statements for the fiscal year ended December 31, 2004.



Revenues.  The Company does not anticipate that revenue generating operations will commence until at least mid 2004.  No revenues were generated for the period January 1, 2004 to December 31, 2004, nor prior to that date.



Expenses.  For the period from January 1, 2004 to December 31, 2004, the Company incurred expenses of $81,000 for consulting fees to Messrs. Lambert and Lawson and $1,615 for other consulting services; professional accounting and legal fees of $9,205; marketing and promotion of $1000; general and administrative expenses of $2,410; transfer agent and filing fees of $653; rent of $3,404; travel costs of $6,306; website development cots of $14,258; and $255 for telephone expenses; and a write down of gas well development costs of $186,000 pursuant to FSAB Statement No. 19.



Expenses for the previous year ended December 31, 2003 were $81,000 for consulting fees to Messrs. Lambert and Lawson and $17,246 for other consulting services; professional accounting and legal fees of $21,669; marketing and promotion of $14,001; general and administrative expenses of $19,088; transfer agent and filing fees of $695; rent of $6,519; and $469 for telephone expenses; and a gain of $6,000 for recovery of previously written down receivables.



Expenses for the year ended December 31, 2002 were $109,226 for consulting fees to Messrs. Hardesty, Lambert and Lawson; professional accounting and legal fees of $46,186; general and administrative expenses of $1,671; transfer agent and filing fees of $563; rent of $1,200; travel costs of $3,357; website development cots of $5,000; and $1,223 for telephone expenses; $7,000 for write down of receivables; and $139,133 for estimated litigation settlement,

and a gain of $9,102 in write off of accounts payable.



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Expenses for the prior three years were $350,889 for consulting; $46,673 for marketing and investor relations; professional accounting and legal fees of $109,601; general and administrative expenses of $60,993; $26,369 for miscellaneous salaries; transfer agent and filing fees of $15,646; rent of $37,585; travel costs of $211,516; website development cots of $13,678; and $40,280 for telephone expenses. Operating capital was advanced to the Company through loans, private placements and shares issued for service debt.



Net Loss.  For the period from January 1, 2004 to December 31, 2004, the Company recorded a loss from operations totalling $106,512 for the year.  When combined with the write down of gas well development costs of $186,000, the total loss for the year was $292,512.  The total net loss since incorporation through to December 31, 2004, was $4,217,240.



Liquidity and Capital Resources.



Certain management and business associates have advanced a total of $42,161 as

loans to the Company to cover operating costs during 2004.  Shares were issued for services totaling $60,000 and advances made during 2004 totaling $240,000.  As of December 31, 2004, the working capital deficiency was $362,499.



A.  RESULTS OF OPERATIONS



At this time, the Company has not commenced revenue generating operations.  As noted previously, the Company does not anticipate commencing revenue generating operations until the second half of 2004.  The Company also cautions that while it does not foresee any such eventuality, delays in the anticipated start of operations might occur.



B.  CAPITAL RESOURCES



The Company had a working capital deficiency of $362,499 at December 31, 2004.  The Company is pursuing private placements and debt financing to fund business development and settled the outstanding advances payable of $242,161 and a majority of the accounts payable of $208,675 at December 31, 2004 by conversion to private placement shares.  In the meantime, the Company is meeting its obligations through funds loaned by certain management and non-related third parties.  The Company anticipates that it will be able to raise further funds through share issuances over the next year that will provide adequate working capital for the next twelve months.



The Company intends to make one specific commitment for Capital Expenditures.  During 2005, the Company intends to construct a pipeline from its Bourbon County leasehold lands, where it has drilled several wells, to a natural gas distribution delivery point, location yet to be finalized.  The anticipated budget for this Capital Expenditure is approximately $300,000.



C.  LIQUIDITY



The Company is illiquid at the present time and is dependent upon loans and small private placements to provide funds to maintain its activities, though the Company expects to be able to raise larger amounts of funds through the issuance of shares over the next six to twelve months.



D. FORWARD-LOOKING STATEMENTS



The Registrant cautions readers that certain important factors may affect the Registrant's actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this document or that are otherwise made by or on behalf of the Registrant.  For this purpose, any statements contained in the Document that are not statements of historical fact may be deemed to be forward-looking statements.



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This Registration contains statements that constitute "forward-looking statements."  These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms.



These statements appear in a number of places in this Registration and include statements regarding the intent, belief or current expectations of the Registrant, its directors or its officers with respect to, among other things: (i) trends affecting the Registrant's financial condition or results of operations for its limited history; (ii) the Registrant's business and growth strategies; (iii) the petroleum and energy industries; and, (iv) the Registrant's financing plans.  Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.  Factors that could adversely affect actual results and performance include, among others, the Registrant's limited operating history, dependence on continued levels of pricing and demand for oil and natural gas, the Registrant's inexperience with the petroleum industry, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.



ITEM 7.  FINANCIAL STATEMENTS



The consolidated financial statements of the Company are filed under this Item, and are included herein by reference.





ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE





1.   Previous independent accountants



(i)  Effective March 28, 2005, Litewave Corp. ("Litewave") confirmed with its auditors, Morgan & Company ("Morgan"), that Morgan would no longer be representing Litewave as its accountants.  As of that date, Litewave dismissed Morgan as its auditors.



(ii) Morgan last reported on Litewave's financial statements as of December 31, 2003 and 2002.  The audit reports of Morgan on Litewave's financial statements for the fiscal years ending December 31, 2003 and 2002 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except such

reports were modified to include an explanatory paragraph describing for a going concern uncertainty.



(iii)     The change of independent accountants was ratified by the Board of Directors of Litewave on March 24, 2005.



(iv) During Litewave's two previous fiscal years and the subsequent interim period through March 28, 2005, there were no disagreements with Morgan on any matter of accounting principles or practices, financial statement disclosure, or

auditing scope or procedure, which, if not resolved to Morgan's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report as discussed in Item 304(a)(1)(iv) of Regulation S-B.



2.   New independent accountants



Litewave has engaged Telford Sadovnick, P.L.L.C., Certified Public Accountants as its new independent accountant on March 28, 2005. Prior to March 28, 2005, Litewave had not consulted with Telford Sadovnick regarding (I) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on Litewave's consolidated financial statements, and no written report or oral advice was provided to Litewave by Telford Sadovnick concluding



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there was an important factor to be considered by Litewave in reaching a decision as to an accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(2) of Regulation S-B and the related instructions to Item 304 of Regulation S-B, or a reportable event, as that term is defined in Item 304(a)(2) of Regulation S-B.



3.   Litewave requested that Morgan furnish it with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of such letter, dated March 28, 2005, is filed as Exhibit 16.2 to the Form 8-K.



ITEM 8A. CONTROLS AND PROCEDURES



CONTROLS AND PROCEDURES



Based on their evaluation, as of a date within 90 days prior to the date of the filing of this report, of the effectiveness of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures are effective and sufficient to ensure that we record, process, summarize, and report information required to be disclosed by us in our periodic reports filed under the Securities Exchange Act within the time periods specified by the Securities and Exchange Commission's rules and forms.



Subsequent to the date of their evaluation, there have not been any significant changes in our internal controls or in other factors that could significantly affect these controls, including any corrective action with regard to significant deficiencies and material weaknesses.



INFORMATION RELATING TO THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS



The purpose of the Audit Committee is to assist the Board of Directors in the oversight of the integrity of the consolidated financial statements of the Company, the Company's compliance with legal and regulatory matters, the independent auditor's qualifications and independence, and the performance of the Company's independent auditors.



The primary responsibilities of the Audit Committee are set forth in its charter, and include various matters with respect to the oversight of the Company's accounting and financial reporting process and audits of the consolidated financial statements of the Company on behalf of the Board of Directors. The Audit Committee also selects the independent certified public accountants to conduct the annual audit of the consolidated financial statements of the Company; reviews the proposed scope of such audit; reviews accounting and financial controls of the Company with the independent public accountants and financial accounting staff; and reviews and approves transactions between the Company and its directors, officers, and their affiliates.



At least one audit committee financial expert serving on its audit committee, Mr. Harvey Lawson, though that person is not independent, as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the  Exchange Act.  Due to the limited number of Board Members, the entire board of directors is acting as a small business issuer's audit committee as specified in section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)).

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PART III



ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



Our listed officers and directors will serve until the next annual meeting of stockholders or until their death, resignation, retirement, removal, disqualification, or until their successors have been duly elected and qualified. Vacancies in our existing Board of Directors are filled by majority vote of the remaining directors. Our officers serve at the will of our Board of Directors. There is no family relationship between any executive officer and director.



The following are the names, positions, and municipalities of residence and relevant backgrounds of current key personnel of the Company:



Ian Davidson Lambert: CEO, President, Director

Date Position Commenced: February 26, 1999

Term of Office: Annual

Address:  1220 Eastview Road, North Vancouver, B.C. V7J 1L6

Age: 59



Experience:  Owner, Canasia Data Corporation, (management services company) 1983 to present; Director, Covik Development Corp.,(oil & gas exploration) April 1990 to present; Director, Trade Winds Ventures Inc., (mineral exploration) April 1990 to present; Director, Sunorca Development Corp., (gas energy production) December 1999 to present; All companies are arms length with the Registrant, except Canasia Data, which is a shareholder of the Registrant.



Harvey M. Lawson: CFO, Secretary/Treasurer

Date Position Commenced:  January 18, 2000

Term of Office: Annual

Address: 464 Somerset Street, North Vancouver, BC Canada V7N 1G3

Age: 57



Experience: Director and Officer, Alinghi Minerals Inc. (mineral exploration) 2001 to present; Director, Trade Winds Ventures Inc.(mineral exploration) January 2001 to present; Director, Sunorca Development Corp., (gas energy production) December 2002 to present; Financial Planner 1993 to 1998; Lecturer in Financial Management in Hong Kong, Singapore and Canada 1978 to 1993.



Edward D. Duncan: Director

Date Position Commenced:  June 10, 2003

Term of Office: Annual

Address: 6 Sullivans Quay, Cork, Cork, Eire

Age: 70



Experience: Director and Officer, Rampart Ventures Ltd. (mineral exploration) 2003 to present; Director, Trade Winds Ventures Inc.(mineral exploration) 2003 to present.  Retired lawyer.



Mr Gilbert McGown was appointed to the Board of Directors on June 10, 2003.  Unfortunately, Mr. McGown passed away in November, 2003.  His vacant position has not been filed to date.



COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT



Section 16(a) of the Exchange Act requires directors, officers, and persons who own more than 10% of a registered class of equity securities to file reports of ownership and changes in ownership with the SEC. Directors, officers, and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.  Based solely upon our review of the copies of such forms received during the fiscal year ended December 31, 2004, and written representations that no other reports were required, it is believed that each person who at any time during the fiscal year was a director, officer, or beneficial owner of more than 10% of our common stock complied with all Section 16(a) filing requirements during such fiscal year.



CODE OF ETHICS



Our Board of Directors has adopted Corporate Governance Guidelines, a Code of Conduct, a Code of Ethics for the CEO and Senior Financial Officers, an Audit Committee Charter, and any other corporate governance materials contemplated by SEC or applicable regulations.  These corporate governance documents are available in print to any stockholder who requests by contacting our Corporate Secretary at our offices.



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ITEM 10.  EXECUTIVE COMPENSATION





A.  SUMMARY COMPENSATION



A private company wholly-owned by Mr. Ian Lambert received or was due a total of $75,000 of compensation in the fiscal year ended December 31, 2004, in accordance with a management employment agreement approved by the directors in October, 1999 at a rate of $4,500 per month, increased by the Directors in October, 2000 to a rate of $9,000 per month, and amended by the Directors to a rate of $6,250 per month effective October 1, 2002.



Mr. Lawson was paid or due $6,000 in the fiscal year ended December 31, 2004, for management and consulting services.



The following table sets forth certain information concerning the compensation for the fiscal years ended December 31, 2002, 2003 and 2004 earned by our chief executive officer.  No executive officers earned cash salaries and bonuses exceeding $100,000 during fiscal 2004.



SUMMARY COMPENSATION TABLE



Long Term

Compensation Awards

Name and                             Other       Annual  Securities Underlying    All

Principal Position   Year  Salary($) Bonus($) Compensation($) options(#)

Compensation($)



Ian D. Lambert   (4) 2004   $ 75,000     --         --             nil              --

Harvey Lawson    (5) 2004   $  6,000     --         --             nil

--

Ian D. Lambert   (4) 2003   $ 75,000     --         --             nil              --

Harvey Lawson    (5) 2003   $  6,000     --         --             nil

--

Ian D. Lambert   (2) 2002   $ 99,750     --         --             nil              --

Michael Hardesty (1) 2002   $  3,476     --         --             nil              --

Harvey Lawson    (3) 2002   $  6,000     --         --             nil

--



(1) Mr. Hardesty became President on June 25, 2001, and resigned on April 5, 2002.



(2) Mr. Lambert was President from February, 1999 to June 25, 2001, and appointed to replace Mr. Hardesty on April 5, 2002.



(3) Mr. Lawson is the Company's Secretary/Treasurer and Chief Financial Officer



(4) Mr. Lambert was granted, on June 10, 2003, net exercise warrants to purchase 580,000 restricted common shares of the Company's stock at a purchase price of $0.10 per share, expiring June 10, 2006.



(5) Mr. Lawson was granted, on June 10, 2003, net exercise warrants to purchase 275,000 restricted common shares of the Company's stock at a purchase price of $0.10 per share, expiring June 10, 2006.



B.  OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)



The Company has approved and implemented a Directors, Officers, Employees and Consultants Stock Option Plan. There were no options granted as at December 31, 2000.  During 2001, a total of 2,295,000 options were granted to Directors, Employees and Consultants. During 2002, no options were granted to



Directors, Employees and Consultants. During 2003, a total of 550,000 options were granted to Directors, Employees and Consultants. During 2004, no options were granted to Directors, Employees and Consultants.



Options Grants



The following table provides information on stock options granted to our

chief executive officers during the fiscal year ended December 31, 2004.



Number of            % of Total Options

Securities Underlying    Granted to Employees  Exercise  Expiry

Name           Options Granted (#)       In Fiscal Year     Price     Date



There were no options granted in the last fiscal year.





C.  AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND

FISCAL YEAR-END OPTION/SAR VALUES



There were no options exercised in the last fiscal year.



Number of                                  Value (1) of Unexercised

Securities Underlying                             in-the-money Options

Name                      Unexercised Options (#)                     at Fiscal Year End ($)

Exercisable   Unexercisable             Exercisable   Unexercisable



Ian Lambert                  400,000          -                             $0.00            -

Harvey Lawson             250,000

-                                            $0.00            -



(1) Calculated based upon the closing price of our common stock as reported on the OTCBB on December 31, 2004 of $0.019 per share.



D.  LONG-TERM INCENTIVE PLANS - AWARDS IN THE LAST FISCAL YEAR



The following awards and long term incentive plans were made in

the last fiscal year:



None



E.  COMPENSATION OF DIRECTORS



1. Standard Arrangements



The members of the Company's Board of Directors are reimbursed for actual expenses incurred in attending Board meetings.



2. Other Arrangements



There are no other arrangements.



F.  EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, CHANGE IN

CONTROL ARRANGEMENTS



The Company does not have any compensatory plan or arrangement which will result from the resignation, retirement or other termination of employment of an executive officer or from a change of control of the Company or a change in an executive officer's responsibilities following a change of control.



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Pursuant to an agreement (the "Lambert Executive Employment Agreement") effective as at October 1, 1999 and amended October 1, 2000, 2002, and 2003, Ian Lambert, the Company's CEO, President and a Director, is employed by the Company and currently paid or accrued a monthly salary of $6,250.  The term of the Lambert Executive Employment Agreement will be for minimum increments of one year, subject to earlier termination as provided therein.  Currently, the Board has renewed the Lambert Executive Employment Agreement for the period from October 1, 2004 to December 31, 2005 at the rate of $75,000 per annum.



Pursuant to a proposed agreement (the "Lawson Employment Agreement") to be effective as at January 18, 2000, Harvey Lawson, the Company's CFO, Secretary/Treasurer and a Director, will be employed by the Company and paid a monthly salary of $500. The term of the Lawson Executive Employment Agreement will be for a minimum of one year, subject to earlier termination as provided therein.  Currently, the Board has renewed the Lawson Employment Agreement for the period from October 1, 2004 to December 31, 2005.



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT



A.   Security ownership of certain beneficial owners.  The table below  identifies any individual (including any "group") who is known to the Company to be the beneficial owner of more than five percent of any class of the small business Company's voting securities as at December 31, 2004:



Title of                Name and address                           Amount and nature                    Percentage

class                  of beneficial                                     of beneficial                               of class (1)

Owner                                             ownership



Common     Ian Lambert

5,207,000                                   8.98%

1220 Eastview Road

North Vancouver, B.C. V7J 1L6



Common     Harvey Lawson                                        1,900,000                                   3.28%

464 Somerset Street

North Vancouver, B.C. V7N 1G3



(1)  Percentage of total 57,935,224 shares issued as at December 31, 2004



B.   Security ownership of management.  The table below sets forth the ownership by all directors and nominees, each of the named executive officers of the  Company, and all directors and executive officers of the Company as a group.



Title of                           Name and address                             Amount and nature                        Percentage

class                            of beneficial                                        of beneficial                                  of class

Owner                                                ownership (1)                                (2)



Common       Ian Lambert (3)                                              6,707,000 common                             11.6%

1220 Eastview Road

North Vancouver, B.C. V7J 1L6



Common       Harvey Lawson (4)                                         2,425,000 common                               4.2%

464 Somerset Street

North Vancouver, B.C. V7N 1G3



Common       Edward Duncan (5)                                           750,000 common                              1.3%

6 Sullivans Quay, Cork, Cork, Eire



Common       All Officers and Directors

as a Group (three persons)                             9,882,000 common                             17.1%





(1)

Each person named in the table has sole voting and investment power with respect to all common stock beneficially owned by him or her, subject to applicable community property law, except as otherwise indicated.  Except as otherwise indicated, each person may be reached through the Company at it offices.



2)

The percentages shown are calculated based upon 57,935,224 shares of common stock outstanding on April 14, 2005. The numbers and percentages shown include the shares of common stock actually owned as of April 14, 2005 and the shares of common stock that the identified person or group had the right to acquire within 60 days of such date. In calculating the percentage of ownership, all shares of common stock that the identified person or group had the right to acquire within 60 days of April 14, 2005 upon the exercise of options are deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by such person or group, but are not deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by any other person.



(3) Represents 5,207,000 shares of common stock and vested options and warrants to acquire 1,500,000 shares of common stock.



(4)  Represents 1,900,000 shares of common stock and vested options and warrants  to acquire 525,000 shares of common stock.



(5)

Represents vested options and warrants to acquire 750,000 shares of common stock.





C.   CHANGES IN CONTROL





None.





ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Except as otherwise disclosed herein, no director, senior officer, principal shareholder or any associate or affiliate, had any material interest, direct or indirect, in any transaction since incorporation that had or is anticipated to have a material affect on the business, or any proposed transaction that would materially affect the business, except for an interest arising from the ownership of common shares of the Company where the member will receive no extra or special benefit or advantage not shared on a pro rata basis by all holders of shares in the Company's capital.



Ian Lambert (CEO, President) and Harvey Lawson (CFO, Secretary/Treasurer) are currently the principal management of the business, and they own collectively 7,107,000 shares or 12.3% of the issued and outstanding stock.  The salary for these executive officers outlined in Compensation of Officers was not established by arms length negotiations, however it is believed that the terms of these transactions are no less favorable to the Company than terms expected to be negotiated with unrelated parties at arms length.



ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON

FORM 8-K



(a) Exhibits

Exhibit Number                         Description



16.2

Letter regarding Change of Auditor



99.1          Chief Executive Officer's Certification



99.2          Chief Financial Officer's Certification





(b) Reports on Form 8-K



The Registrant filed a report on Form 8-K during the year dated March 29, 2005.



Exhibits as required by Item 601 of Regulation S-B



Index to Exhibits:





Exhibit        Description

Number



Exhibit 3.1    Articles of Incorporation filed June 30, 1989. (1)



Exhibit 3.2    Certificate of Amendment of Articles of

Incorporation filed July 16, 1998, increasing

authorized capital stock in the Corporation to 25

million shares at $0.001 par value. (1)



Exhibit 3.3    Certificate of Amendment of Articles of

Incorporation effecting a split of 200 for 1,

effective July 25, 1998(1)



Exhibit 3.4    Certificate of Amendment of Articles of

Incorporation filed May 10, 1999, changing the

name of the Corporation from Homefront Safety

Services of Nevada, Inc. to LITEWAVE CORP. (1)



Exhibit 3.5    Bylaws of the Corporation. (1)



Exhibit 4.1    Litewave Corp. 2000 Stock Option Plan (2)



Exhibit 4.2    Form of Litewave Corp. Employee Incentive Stock

Option Agreement Pursuant to the 2000 Stock Option

Plan (2)



Exhibit 4.3    Form of Litewave Corp. Employee Non-Qualified

Stock Option Agreement Pursuant to 2000 Stock

Option Plan (2)



Exhibit 10.1   Technology Purchase and Assignment Agreement,

dated April 19, 1999, to acquire the assets of and

the world-wide rights to the technology agreement

between the Corporation and International

Communications and Equipment Inc. (1)



Exhibit 10.2   Letter of Intent, dated May 27, 1999, from ZAO NPO

Crosna of the Russian Federation covering the

installation and operation of

Voice-over-the-Internet Protocol technology for

long distance telephone traffic to and from the

Russian Federation. (1)



Exhibit 10.3   Protocol of Intentions Agreement between the

Corporation and ZAO NPO Crosna, dated June 22,

1999, respecting the organization of international



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and inter-city VoIP communications channels in the

territory of the Russian Federation. (1)



Exhibit 10.4   Agreement, dated September 10, 1999, between

Crosna and the Corporation entitled "Principles

for Setting up the IP Telephone Network and

Providing IP Telephone Services in the Territory

of the Russian Federation"; establishing a 50/50

joint venture. (1)



Exhibit 10.5   Agreement, dated January 7, 2000 Letter of Intent

between the Corporation and International

Communications and Equipment Inc. ("ICE") to

rescind the Agreement dated April 19, 1999 between

the two parties, and provide the terms for

the assignment of the Crosna Russian project to

ICE. (1)



Exhibit 10.6   Letter of Intent, dated June 15, 1999, between the

Corporation and M. Demajo Group of Companies of

Valletta, Malta, to form a joint venture with in

order to provide VoIP network and services,

pre-paid calling cards, Internet Service Provider

access and other telephony services. (1)



Exhibit 10.7   Officer/Director Employment Agreement, dated

October 1, 1999, between the Corporation and its

President, Ian Lambert(1)



Exhibit 10.8   Funding Agreement, dated July 6, 2000, between the

Company and its President, Ian Lambert (1)



Exhibit 10.9   Letter of Intent between the Company and

AirArmor Inc. dated October 5, 2000 to enter

into the acquisition of AirArmor Inc. (3)



Exhibit 10.10  Asset Purchase Agreement between Panier, SA and

Litewave Corp. dated February 22, 2001. (4)



Exhibit 10.11  6% Convertible Debenture between Litewave Corp.

and Panier, SA dated February 16, 2001. (4)



Exhibit 16.1   Letter from Davidson & Company to the Securities

and Exchange Commission regarding change of

auditor. (5)



Exhibit 16.2   Letter from Morgan & Company to the Securities

and Exchange Commission regarding change of

auditor (6).







(1) Incorporated by reference to the Registrant's Registration

Statement on Form 10-SB



(2) Incorporated by reference to the Registrant's Registration



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Statement on Form S-8



(3) Incorporated by reference to the Registrant's Annual Report

on Form 10KSB for the year ended December 31, 2002



(4) Incorporated by reference to the Registrant's Quarterly

Report on Form 10QSB for the quarter ended September 30, 2003



(5) Incorporated by reference to the Registrant's 8-K report,

filed April 15, 2003, an amended 8-K/A on April 16, 2003



(6) Incorporated by reference to the Registrant's 8-K report,

filed March 29, 2005





ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Aggregate fees billed to the Company for the fiscal years ended December 31, 2004 and 2003 by our principal accountant Telford Sadovnick, and their predecessor Morgan & Company, Chartered Accountants (2003), were as follows:



2004                   2003



Audit Fees                            $ 12,614         $  4,660

Audit-Related Fees                $    600          $  1,200

Tax Fees                              $    -              $    -

All Other Fees                       $    -              $    -



AUDIT COMMITTEE PRE-APPROVAL POLICIES



The duties and responsibilities of the Audit Committee include the pre-approval of all audit, audit related, tax, and other services permitted by law or applicable SEC regulations (including fee and cost ranges) to be performed by our independent auditor.  Any pre-approved services that will involve fees or costs exceeding pre-approved levels will also require specific pre-approval by the Audit Committee.  Unless otherwise specified by the Audit Committee in pre-approving a service, the pre-approval will be effective for the 12-month period following pre-approval.  The Audit Committee will not approve any non-audit services prohibited by applicable SEC regulations or any services in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which will not be supported by the Internal Revenue Code and related regulations.



To the extent deemed appropriate, the Audit Committee may delegate pre-approval authority to the Chairman of the Board or any one or more other members of the Audit Committee provided that any member of the Audit Committee who has exercised any such delegation must report any such pre-approval decision to the Audit Committee at its next scheduled meeting.  The Audit Committee will not delegate the pre-approval of services to be performed by the independent auditor to Management.



Our Audit Committee requires that our independent auditor, in conjunction with our Chief Financial Officer, be responsible for seeking pre-approval for providing services to us and that any request for pre-approval must inform the Audit Committee about each service to be provided and must provide detail as to the particular service to be provided.



All of the services provided by Telford Sadovnick and their predecessor Morgan & Company, Chartered Accountants, described above under the captions "Audit Fees," and were approved by our Audit Committee.

---





THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT UNDER PART II, ITEM 7:





Audited Financial Statements and notes thereto: Pages F-1 to F-19







LITEWAVE CORP.

(An Exploration Stage Company)

FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004









REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of

Litewave Corp.

(An Exploration Stage Company)





We have audited the accompanying balance sheet of Litewave Corp. (the Company) (An Exploration Stage Company) as at December 31, 2004, the related statements of operations, stockholders deficiency and cash flows for the year ended 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 standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Litewave Corp. (An Exploration Stage Company) as at December 31, 2004 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The financial statements as of and for the year ended December 31, 2003, and the cumulative data from June 30, 1989 (inception) to December 31, 2003, were audited by Morgan & Company, Chartered Accountants, and they expressed an unqualified opinion in their report dated April 6, 2004, but they have not performed any auditing procedures since that date.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered recurring losses and net cash outflows from operations since inception.  These factors raise substantial doubt about the Companys ability to continue as a going concern.  Managements plans in regard to these matters are also described in Note 2.  These financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ TELFORD SADOVNICK, P.L.L.C.



CERTIFIED PUBLIC ACCOUNTANTS



Bellingham, Washington

May 18, 2005

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM









To the Stockholders and Board of Directors of

Litewave Corp.

(An Exploration Stage Company)



We have audited the balance sheets of Litewave Corp. (an exploration stage company) as at December 31, 2003 and the statements of operations, cash flows, and stockholders deficiency for the year ended December 31, 2003, and for the period from inception, June 30, 1989, to December 31, 2003.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



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



In our opinion, these financial statements present fairly, in all material respects, the financial position of Litewave Corp. (an exploration stage company) as at December 31, 2003 and the results of its operations and its cash flows for the year ended December 31, 2003, and for the period from inception, June 30, 1989, to December 31, 2003, in conformity with United States generally accepted accounting principles.



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has no established source of revenue.  This raises substantial doubt about its ability to continue as a going concern.  Managements plan in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.









Vancouver, Canada

Morgan & Company



April 6, 2004

Chartered Accountants





---





LITEWAVE CORP.

(An Exploration Stage Company)



BALANCE SHEETS

(Stated in U.S. Dollars)



|                                                           | December 31
|---------------------------------------------------------- | -----------
|                                                           |            
|                                                           |            
|ASSETS                                                     |            
|                                                           |            
|Current                                                    |            
|Cash                                                       | $          
|Deposit with drilling contractor                           |            
|Goods and Services Tax recoverable                         |            
|                                                           |            
|                                                           |            
|Natural Gas and Oil Properties                             |            
|Unproved properties                                        |            
|                                                           |            
|                                                           | $          
|                                                           |            
|LIABILITIES                                                |            
|                                                           |            
|Current                                                    |            
|Accounts payable and accrued liabilities                   | $          
|Advances payable                                           |            
|Loan and note payable                                      |            
|                                                           |            
|                                                           |            
|Commitments (Note 10)                                      |            
|                                                           |            
|STOCKHOLDERS DEFICIENCY                                   |            
|                                                           |            
|Share Capital                                              |            
|Authorized:                                                |            
|100,000,000 common voting stock with a par value of $0.001 |            
|                                                           |            
|Issued:                                                    |            
|57,935,224 common stock (2003  32,435,224)                |            
|                                                           |            
|Additional paid-in capital                                 |            
|                                                           |            
|Deficit Accumulated During The Exploration Stage           |            
|                                                           |            
|                                                           |            
|                                                           | $          







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



---

LITEWAVE CORP.

(An Exploration Stage Company)



STATEMENTS OF OPERATIONS

(Stated in U.S. Dollars)



|                                                     |             |                     | Period From
|---------------------------------------------------- | ----------- | ------------------- | -----------
|                                                     |             |                     | June 30    
|                                                     | Year Ended  | 1989 (Inception) To
|                                                     | December 31 | December 31        
|                                                     | 2004        | 2003                | 2004       
|                                                     |             |                     |            
|Expenses                                             |             |                     |            
|Consulting                                           | $           | 82,615              | $          
|Professional fees                                    |             | 9,205               |            
|Rent                                                 |             | 6,519               |            
|Salaries and benefits                                |             | 3,916               |            
|General and administrative                           |             | 2,410               |            
|Permits and licenses                                 |             | 1,150               |            
|Marketing and promotion                              |             | 1,000               |            
|Transfer agent and filing fees                       |             | 653                 |            
|Telephone and utilities                              |             | 469                 |            
|Foreign exchange (gain) loss                         |             | (1,425)             |            
|Website development                                  |             | -                   |            
|Travel                                               |             | -                   |            
|                                                     |             | 106,512             |            
|                                                     |             |                     |            
|Other Items                                          |             |                     |            
|(Recovery) Write off of advances receivable          |             | -                   |            
|Write down of property and equipment                 |             | -                   |            
|Provision for settlement of litigation               |             | -                   |            
|Write off of accounts payable                        |             | -                   |            
|Write off of intellectual and property rights        |             | -                   |            
|                                                     |             |                     |            
|                                                     |             |                     |            
|Net Loss For the Period                              | $           | (106,512)           | $          
|                                                     |             |                     |            
|                                                     |             |                     |            
|Basic And Diluted Loss Per Common
Share              | $           | (0.01)              | $          
|                                                     |             |                     |            
|                                                     |             |                     |            
|Weighted Average Number Of Common Shares Outstanding |             | 45,185,224          |            







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

---



LITEWAVE CORP.

(An Exploration Stage Company)



STATEMENTS OF CASH FLOWS

(Stated in U.S. Dollars)



|                                                                   |             |                     | Period From
|------------------------------------------------------------------ | ----------- | ------------------- | -----------
|                                                                   |             |                     | June 30    
|                                                                   | Year Ended  | 1989 (Inception) To
|                                                                   | December 31 | December 31        
|                                                                   | 2004        | 2003                | 2004       
|                                                                   |             |                     |            
|Cash provided by (used in):                                        |             |                     |            
|                                                                   |             |                     |            
|Operating Activities                                               |             |                     |            
|Net loss for the period                                            | $           | (106,512)           | $          
|Items not involving cash:                                          |             |                     |            
|Website development expenses paid by shares of common stock        |             | -                   |            
|Professional fees paid by shares of common stock                   |             | -                   |            
|Consulting expenses paid by stock options and warrants             |             | -                   |            
|Write down of property and equipment                               |             | -                   |            
|Write off of advances receivable                                   |             | -                   |            
|Professional fees paid by stock options                            |             | -                   |            
|Consulting expenses paid by shares of common stock                 |             | -                   |            
|General and administrative expenses paid by shares of common stock |             | -                   |            
|Write off of intellectual and property rights                      |             | -                   |            
|Write off of accounts payable                                      |             | -                   |            
|                                                                   |             | (106,512)           |            
|Changes in non-cash operating working capital items:               |             |                     |            
|(Increase) Decrease in receivables                                 |             | (5)                 |            
|(Increase) Decrease in prepaid development expense                 |             | -                   |            
|Increase in accounts payable and accrued liabilities               |             | 90,016              |            
|                                                                   |             | (16,501)            |            
|Investing Activities                                               |             |                     |            
|Advances receivable                                                |             | -                   |            
|Acquisition of property and equipment                              |             | -                   |            
|Acquisition of intellectual and property rights                    |             | -                   |            
|Deposit with drilling contractor                                   |             | (50,000)            |            
|Acquisition of natural gas and oil properties                      |             | -                   |            
|                                                                   |             | (50,000)            |            
|Financing Activities                                               |             |                     |            
|Advances payable                                                   |             | 14,546              |            
|Loan proceeds                                                      |             | 100,000             |            
|Bank indebtedness                                                  |             | -                   |            
|Note payable                                                       |             | -                   |            
|Issuance of common stock                                           |             | -                   |            
|                                                                   |             | 114,546             |            
|                                                                   |             |                     |            
|Change In Cash For The Period                                      |             | 48,045              |            
|                                                                   |             |                     |            
|Cash, Beginning Of Period                                          |             | 272                 |            
|                                                                   |             |                     |            



|Cash, End Of Period | $ | 48,317 | $ | 272 | $ | 48,317
|------------------- | - | ------ | - | --- | - | ------
|                    |   |        |   |     |   |       

(Cont

---

LITEWAVE CORP.

(An Exploration Stage Company)



STATEMENTS OF CASH FLOWS (Continued)

(Stated in U.S. Dollars)



|                                 |             |                     |   |      | Period From
|-------------------------------- | ----------- | ------------------- | - | ---- | -----------
|                                 |             |                     |   |      | June 30    
|                                 | Year Ended  | 1989 (Inception) To
|                                 | December 31 | December 31        
|                                 |             | 2004                |   | 2003 | 2003       
|                                 |             |                     |   |      |            
|Cash Paid During The Period For: |             |                     |   |      |            
|                                 |             |                     |   |      |            
|Interest expense                 | $           | -                   | $ | -    | $          
|Income taxes                     |             | -                   |   | -    |            





SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 12)



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



---

LITEWAVE CORP.

(An Exploration Stage Company)



STATEMENT OF STOCKHOLDERS DEFICIENCY

(Stated in U.S. Dollars)



|                                                            |              |             |            | Deficit     |          
|----------------------------------------------------------- | ------------ | ----------- | ---------- | ----------- | ---------
|                                                            | Common Stock | Accumulated |           
|                                                            |              |             | Additional | During The  |          
|                                                            |              |             | Paid-In    | Exploration |          
|                                                            | Shares       | Amount      | Capital    | Stage       | Total    
|                                                            |              |             |            |             |          
|Balance from June 30, 1989
(Inception) to December 31, 1997 | 2,000,000    | $           | 2,000      | $           | -        
|                                                            |              |             |            |             |          
|Stock issued for services                                   | 500,000      |             | 500        |             | 840      
|Net loss                                                    | -            |             | -          |             | -        
|                                                            |              |             |            |             |          
|Balance, December 31, 1998                                  | 2,500,000    |             | 2,500      |             | 840      
|                                                            |              |             |            |             |          
|Net loss                                                    | -            |             | -          |             | -        
|                                                            |              |             |            |             |          
|Balance, December 31, 1999                                  | 2,500,000    |             | 2,500      |             | 840      
|                                                            |              |             |            |             |          
|Stock issued on settlement of note payable                  | 3,500,000    |             | 3,500      |             | 1,046,500
|Net loss                                                    | -            |             | -          |             | -        
|                                                            |              |             |            |             |          
|Balance, December 31, 2000                                  | 6,000,000    |             | 6,000      |             | 1,047,340
|                                                            |              |             |            |             |          
|Stock issued on settlements of note payable                 | 1,000,000    |             | 1,000      |             | 184,000  
|Stock issued for settlement of accounts payable             | 2,090,974    |             | 2,091      |             | 332,904  
|Stock issued for services                                   | 260,000      |             | 260        |             | 40,140   
|Stock issued for prepaid services                           | 820,000      |             | 820        |             | 48,380   
|Stock issued for donation                                   | 10,000       |             | 10         |             | 2,990    
|Stock issued for cash on exercise of warrants               | 300,000      |             | 300        |             | 74,700   
|Stock issued on settlement of amount due to related party   | 100,000      |             | 100        |             | 24,900   
|Stock issued for cash on private placement                  | 240,000      |             | 240        |             | 119,760  
|Stock-based compensation expense                            | -            |             | -          |             | 1,493,520
|Net loss                                                    | -            |             | -          |             | -        
|                                                            |              |             |            |             |          
|Balance, December 31, 2001                                  | 10,820,974   |             | 10,821     |             | 3,368,634
|                                                            |              |             |            |             |          
|Stock issued for settlement of accounts payable             | 325,000      |             | 325        |             | 24,015   
|Net loss                                                    | -            |             | -          |             | -        
|                                                            |              |             |            |             |          
|Balance, December 31, 2002                                  | 11,145,974   |             | 11,146     |             | 3,392,649



(Continued)

---



LITEWAVE CORP.

(An Exploration Stage Company)



STATEMENT OF STOCKHOLDERS DEFICIENCY (Continued)

(Stated in U.S. Dollars)





|                                                                                  |              |             |            | Deficit     |          
|--------------------------------------------------------------------------------- | ------------ | ----------- | ---------- | ----------- | ---------
|                                                                                  | Common Stock | Accumulated |           
|                                                                                  |              |             | Additional | During The  |          
|                                                                                  |              |             | Paid-In    | Exploration |          
|                                                                                  | Shares       | Amount      | Capital    | Stage       | Total    
|                                                                                  |              |             |            |             |          
|Balance, December 31, 2002                                                        | 11,145,974   | $           | 11,146     | $           | 3,392,649
|                                                                                  |              |             |            |             |          
|Stock cancelled and returned to treasury                                          | (485,750)    |             | (486)      |             | (35,764) 
|Stock issued on settlement of notes payable                                       | 11,750,000   |             | 11,750     |             | 35,250   
|Stock issued for services                                                         | 1,911,350    |             | 1,911      |             | 103,316  
|Stock issued on settlement of accounts payable                                    | 1,213,650    |             | 1,214      |             | 21,059   
|Stock issued on settlement of amount due to related party                         | 6,900,000    |             | 6,900      |             | 62,100   
|Stock-based compensation expense                                                  | -            |             | -          |             | 3,696    
|Net loss                                                                          | -            |             | -          |             | -        
|                                                                                  |              |             |            |             |          
|Balance, December 31, 2003                                                        | 32,435,224   |             | 32,435     |             | 3,582,306
|                                                                                  |              |             |            |             |          
|Stock issued on settlement of notes payable                                       | 15,000,000   |             | 15,000     |             | 135,000  
|Stock issued on settlement of an assignment of an amount due from a related party | 9,000,000    |             | 9,000      |             | 81,000   
|Stock issued on settlement of well maintenance costs                              | 1,500,000    |             | 1,500      |             | 58,500   
|Net loss                                                                          | -            |             | -          |             | -        
|                                                                                  |              |             |            |             |          
|Balance, December 31, 2004                                                        | 57,935,224   | $           | 57,935     | $           | 3,856,806









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

---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



1.

HISTORY AND ORGANIZATION OF THE COMPANY



Litewave Corp. (the Company) was organized on June 30, 1989, under the laws of the State of Nevada, as Homefront Safety Services of Nevada, Inc.  On April 26, 1999, the Company changed its name from Homefront Safety Services of Nevada, Inc. to Litewave Corp.



The Company is considered an exploration stage company as it has not generated revenues from its operations.



2.

GOING CONCERN



These financial statements have been prepared in conformity with generally accepted accounting principles in the United State of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation.



As shown in the accompanying financial statements, the Company has incurred a net loss of $4,031,240 for the period from June 30, 1989 (inception) to December 31, 2004, and has no sales.  The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its properties.  Management has plans to seek additional capital through a private placement and public offering of its common stock.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.



3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.



The financial statements have, in managements opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:



i)

Use of Estimates



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



---

LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



ii)

Natural Gas and Oil Properties



The Company utilizes the full cost method to account for its investment in natural gas and oil properties.  Under this method, all costs of acquisition, exploration and development of natural gas and oil reserves, including such costs as leasehold acquisition costs, geological expenditures, tangible and intangible development costs, and direct internal costs are capitalized as incurred.  Should the Companys properties become productive, the cost of these natural gas and oil properties will be depleted and charged to operations using the unit of production method based on the ratio of current production to proved natural gas and oil reserves as estimated by independent engineering consultants.



Costs directly associated with the acquisition and evaluation of unproved properties are excluded from the depletion computation until it is determined whether or not proved reserves can be assigned to the properties or whether impairment has occurred.  If the results of a quarterly assessment indicate that the properties are impaired, the amount of the impairment along with the costs of drilling exploratory dry holes and geological and geophysical costs that cannot be directly associated with specific unevaluated properties are charged to operations for the period.



Internal costs not directly associated with acquisition, exploration and development activities are expensed as incurred.  No internal costs are capitalized as of December 31, 2004.

iii)

Asset Retirement Obligations

The Company has adopted Statement of Financial Accounting Standards No. 143 (SFAS 143), Accounting for Asset Retirement Obligations, which requires that an asset retirement obligation (ARO) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset.  The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset.  The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value.  The fair value of the ARO is measured using expected future cash flow, discounted at the Companys credit-adjusted risk-free interest rate.  To date, insufficient information has been available for management to determine the Companys asset retirement obligation, which primarily relates to the plugging and abandonment of its wells.  Accordingly, no liability has been recorded.

iv)

Environmental Protection and Reclamation Costs

The operations of the Company have been, and may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restorations costs.  Both the likelihood of new regulations and their overall effect upon the Company may vary from region to region and are not predictable.

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against statements of operations as incurred or capitalized and amortized depending upon their future economic benefits.  The Company does not currently anticipate any material capital expenditures for environmental control facilities because all property holdings are at early stages of exploration.

---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

v)

Foreign Currency Translation



Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at transaction dates.  Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date.  Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date.  Gains and losses from restatement of foreign currency monetary and non-monetary assets and liabilities are included in the statements of operations.  Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in the statements of operations.



vi)

Cash



Cash consists of cash on deposit with high quality major financial institutions, and to date has not experienced losses on any of its balances. The carrying amounts approximated fair market value due to the liquidity of these deposits.



vii)

Loss Per Share



Basic loss per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period.  Diluted loss per share takes into consideration shares of common stock outstanding (computed under basic loss per share) and potentially dilutive shares of common stock.  Diluted loss per share is not presented separately from loss per share as the exercise of any options and warrants would be anti-dilutive.



viii)

Income Taxes



A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards.  Deferred tax expenses (benefits) result from the net change during the period of deferred tax assets and liabilities.



Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.



ix)

Stock-based Compensation



The Company has elected to follow the intrinsic value approach of Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and related interpretations, in accounting for its employee stock options and warrants rather than the alternative fair value accounting allowed by Statement of Financial Accounting Standards No. 123  (SFAS 123), Accounting for Stock-based Compensation.  APB 25 provides that the compensation expense relative to the Companys employee stock options and warrants is measured based on the intrinsic value of the stock option or warrant.  SFAS 123 permits companies to continue to follow APB 25 and provide pro-forma disclosure of the impact of applying the fair value method of SFAS 123.



---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004







3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



x)

Financial Instruments



The Companys financial instruments consist of cash, deposits, taxes recoverable, accounts payable and accrued liabilities, advances payable and loan and note payable.  Unless otherwise noted, it is managements opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.  The fair value of these financial instruments, except for the note payable whose fair value is not readily determinable, approximates their carrying values.



xi)

Recent Accounting Pronouncements



a)

In November 2004, FASB issued Statement of Financial Accounting Standards No. 151 (SFAS 151), Inventory Costs.  The Company has determined that the adoption of SFAS 151 does not have an impact on its results of operations or financial position.



b)

In December 2004, FASB issued Statement of Financial Accounting Standards No. 153 (SFAS 153), Exchanges of Non-monetary Assets  an amendment of APB Opinion No. 29.  The Company has determined that the adoption of SFAS 153 does not have an impact on its results of operations or financial position.



c)

In December 2004, FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004) (SFAS 123), Share-Based Payment.  The Statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees.  The provisions of this Statement will be effective for the Company beginning January 1, 2007.



4.

NATURAL GAS AND OIL PROPERTIES



The non-producing unproved natural gas and oil properties consist of the following at December 31, 2004 and 2003:



|                         |  | 2004 | 2003   
|------------------------ |  | ---- | -------
|                         |  |      |        
|Acquisition costs        |  |      |        
|- Waterton Lakes         |  | $    | 20,000 
|                         |  |      |        
|Exploration costs        |  |      |        
|Drilling and testing     |  |      |        
|- Bourbon County, Kansas |  |      | 196,000
|- Grant County, Oklahoma |  |      | 30,000 
|                         |  |      |        
|Total costs              |  | $    | 246,000



---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004





4.

NATURAL GAS AND OIL PROPERTIES (Continued)



i)

Waterton Lakes



On April 30, 2003, the Company entered into a purchase and sale agreement between the Company and Waterton Lakes Hotels (1956) Co. Ltd. (Waterton Lakes), a privately held corporation, for an interest in an natural gas and oil lease in Oklahoma, USA.  Under the terms of the agreement and for the consideration of a payment to Waterton Lakes of $20,000 made May 7, 2003, Waterton Lakes has assigned a working interest portion equal to 50% in an natural gas and oil property, known as the Smith Lease, recorded in Woods County record covering 157 mineral acres (more or less) situated on Lots 3 and 4, and E 1⁄2 of SW 1⁄4 of Section 31, Township 26 North, Range 13 West, Woods County, Oklahoma, USA.



ii)

Other



During 2003, the Company acquired net working interests, ranging from 6.6% to 50%, in certain natural gas and oil leasehold properties in Bourbon County, Kansas, Vernon County, Missouri and Grant County, Oklahoma by incurring expenditures on natural gas well drilling and testing costs.  In 2004, the Company completed an initial drilling and testing program on the Kansas properties.  At December 31, 2004, the properties remained non-producing pending completion of pipeline facilities.  In December 2004, the Company placed $50,000 on deposit with a drilling contractor for well-integration services planned for early 2005.





5.

ADVANCES PAYABLE



Advances payable are unsecured, interest free and repayable on demand.  Included in advances payable as at December 31, 2004 is $134,337 (2003 - $140,292) due to directors and to companies related by virtue of common ownership or common directors.





6.

LOAN AND NOTE PAYABLE



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2004 | 2003   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | -------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |      |        
|i)
Loan From Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |      |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |      |        
|On December 20, 2004, the Company entered into an agreement with two related corporations whereby the related corporations agreed to lend $200,000 to the Company.  The amounts owing are secured by the Companys interest in nine Kansas gas wells (Note 4(ii)) and bear interest at 4% per annum.  Under the terms of the agreement, the Company also agreed to pay a bonus of $60,000 to each of the lenders from cash flow generated by the wells.  The Company received $100,000 of the loan proceeds in December, 2004. The loan matures April 20, 2005. | $    | 100,000





---







LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004







6.

LOAN AND NOTE PAYABLE (Continued)



| | 2004 | 2003
| | ---- | ----



|ii)
Convertible Promissory Note                                                                                                                                                                                                                                                                                                                                           |   |         |   |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------- | - | ------
|                                                                                                                                                                                                                                                                                                                                                                          |   |         |   |       
|On January 7, 2002, the Company converted accounts payable of $10,475 owing to a former director to a convertible promissory note which bears interest at 4% per annum and matured on December 31, 2002.  The note may be converted into common stock of the Company at a 25% discount to the market based on closing trading price on December 31, 2002 in lieu of cash. |   | 11,313  |   | 11,313
|                                                                                                                                                                                                                                                                                                                                                                          |   |         |   |       
|                                                                                                                                                                                                                                                                                                                                                                          | $ | 111,313 | $ | 11,313



7.

COMMON STOCK



i)

Common Stock



a)

On April 28, 2004, the Company approved the issuance of 1,500,000 shares of common stock to its drilling contractor at a price of $0.04 per share for the labor component of oil and gas maintenance and related services totaling $60,000.  Shares of common stock issued for other than cash have been assigned amounts equivalent to the fair value of the services or assets received in exchange.



b)

On December 30, 2004, the Company approved the issuance of 15,000,000 shares of common stock to seven parties converted at a price of $0.01, as conversion of notes payable owing in the total amount of $150,000.



c)

On December 30, 2004, the Company approved the issuance of 9,000,000 shares of common stock to six parties converted at a price of $0.01, as conversion of notes payable previously assigned from an amount owing to a director in the total amount of $90,000.



d)

On October 7, 2003, the Company approved the issuance of 825,000 shares of common stock to its drilling contractor at a price of $0.086 per share for drilling services totaling $71,000.  Shares of common stock issue for other than cash have been assigned amounts equivalent to the fair value of the services or assets received in exchange.



e)

On April 29, 2003, the Company approved the issuance of 700,000 restricted shares of common stock at a value of $0.035 per share for services rendered of $24,500.  The Company also approved the issuance of 100,000 restricted shares of common stock at a value of $0.02 per share for legal services rendered of $2,000.



f)

On April 16, 2003, the Company approved the issuance of 11,750,000 shares of common stock to six parties converted at a price of $0.005, as conversion of notes payable owing in the total amount of $47,000.





---





LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004





7.

COMMON STOCK (Continued)



i)

Common Stock (Continued)



g)

On April 15, 2003, 485,750 common stock, previously issued for services to be performed, were surrendered to the Company for cancellation.



h)

On April 15, 2003, the Company approved the issuance of 6,900,000 restricted shares of common stock at a value of $0.01 per share to directors of the Company for settlement of accounts payable and services rendered of $69,000.  The Company also approved the issuance of 1,500,000 restricted stock of common stock at a value of $0.02 per share for settlement of accounts payable and legal services to be rendered of $30,000.



ii)

Warrants



The following is a summary of the warrant activity during the years ended December 31, 2004 and 2003:



|                               | 2004      |          | 2003  
|------------------------------ | --------- | -------- | ------
|                               |           | Weighted |       
|                               | Number    | Average  |       
|                               | Of        | Exercise |       
|                               | Warrants  | Price    |       
|                               |           |          |       
|Outstanding, beginning of year | 4,310,000 | $        | 0.18  
|                               |           |          |       
|Granted                        | -         |          | -     
|Cancelled/Expired              | (200,000) |          | (0.07)
|                               |           |          |       
|Outstanding, end of year       | 4,110,000 | $        | 0.18  



The following is a summary of the warrants outstanding at December 31, 2004:



|Number
Of Shares |  | Exercise
Price |      | Expiry
Date
|---------------- |  | -------------- | ---- | -----------
|                 |  |                |      |            
|260,000          |  | $              | 0.30 |            
|520,000          |  |                | 0.06 |            
|3,330,000        |  |                | 0.10 |            
|                 |  |                |      |            
|4,110,000        |  |                |      |            



---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



7.

COMMON STOCK (Continued)



iii)

Stock Options



The Company approved the 2000 Stock Option Plan (the Plan) for officers, employees and consultants of the Company.  The Company has reserved 3,000,000 shares of common stock of its unissued share capital for the Plan.  The Plan provides for vesting of options granted pro-rata over five months from the date of grant.



The exercise price of options granted under the Plan will be as follows:



a)

not less than the fair market value per common share at the date of grant;

b)

not less than 75% of the fair market value per common share at the date of grant for options granted to shareholders owning greater than 10% of the Company.



Options granted under the Plan that have vested will expire the earlier of:



a)

five years from the date of grant;

b)

five years from the date of grant for options granted to shareholders owning greater than 10% of the Company;

c)

the termination of the officer, employee or consultant upon cause;

d)

90 days after the termination of the officer, employee or consultant other than by cause, death or disability;

e)

one year after the date of termination of the officer, employee or consultant due to death or disability.



Options granted under the Plan that have not vested will expire the earlier of five years from the date of the grant and the date of termination of the officer, employee or consultant for any reason.



The following is a summary of the stock option activity during the years ended December 31, 2004 and 2003:



|                               | 2004      |          | 2003
|------------------------------ | --------- | -------- | ----
|                               |           | Weighted |     
|                               | Number    | Average  |     
|                               | Of        | Exercise |     
|                               | Shares    | Price    |     
|                               |           |          |     
|Outstanding, beginning of year | 1,700,000 | $        | 0.17
|                               |           |          |     
|Granted                        | -         |          | -   
|                               |           |          |     
|Outstanding, end of year       | 1,700,000 | $        | 0.17





---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



7.

COMMON STOCK (Continued)



iii)

Stock Options (Continued)



The following is a summary of the status of stock options outstanding and exercisable at December 31, 2004:



|          |          | Weighted   
|--------- | -------- | -----------
|          |          | Average    
|Number    |          | Remaining  
|Of        | Exercise | Contractual
|Options   | Price    | Life       
|          |          |            
|550,000   | $        | 0.10       
|600,000   |          | 0.10       
|350,000   |          | 0.275      
|200,000   |          | 0.37       
|          |          |            
|1,700,000 |          |            



iv)

Stock-based Compensation



The Company recognizes compensation expense for stock options, common stock and other equity instruments issued to non-employees for services received based upon the fair value of the services or equity instruments issued, whichever is more reliably determined.  Stock compensation expense is recognized as earned, which is generally over the vesting period of the underlying option.



The Company also adopted FASB Interpretation No. 44 (FIN 44), Accounting for Certain Transactions Involving Stock Compensation, with respect to certain provisions applicable to new awards, options repricings, and changes in grantee status.  FIN 44 addresses practice issues related to the application of APB 25.



The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123 and Emerging Issues Task Force No. 96-18 (EITF 96-18), Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods and Services.

---





LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



7.

COMMON STOCK (Continued)



iv)

Stock-based Compensation (Continued)



The Company does not record any compensation expense related to options granted to its employees.  Had compensation cost for the Companys stock-based compensation plans been determined using the fair value based method at the grant date of stock options awarded to employees, the net loss and loss per share would have been increased to the pro-forma amounts indicated in the following table:



|                                                                                                                 | 2004 | 2003     
|---------------------------------------------------------------------------------------------------------------- | ---- | ---------
|                                                                                                                 |      |          
|Net loss, as reported                                                                                            | $    | (106,512)
|                                                                                                                 |      |          
|Deduct:  Total stock-based employee compensation expense determined under fair value based method for all awards |      | -        
|                                                                                                                 |      |          
|Pro-forma net loss                                                                                               | $    | (106,512)
|                                                                                                                 |      |          
|Loss per share                                                                                                   |      |          
|Basic and diluted  as reported                                                                                  | $    | (0.01)   
|Basic and diluted  pro-forma                                                                                    | $    | (0.01)   



The assumptions used in calculating the fair value of stock options and warrants granted using the Black-Scholes option pricing model are as follows:



|                             | 2003   
|---------------------------- | -------
|                             |        
|Risk-free interest rate      | 3.00%  
|Expected life of the options | 3 years
|Expected volatility          | 208.35%
|Expected dividend yield      | -      



Total stock-based compensation recognized in the statement of operations during the year ended December 31, 2004 for stock-based payments to non-employees was $Nil (2003 - $3,696).

---







LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



8.

INCOME TAXES



A reconciliation of income taxes at statutory rates with the reported taxes is as follows:



|                                                      | 2004 | 2003     
|----------------------------------------------------- | ---- | ---------
|                                                      |      |          
|Loss before income taxes                              | $    | (106,512)
|                                                      |      |          
|Income tax recovery at 34%                            | $    | 36,214   
|Unrecognized benefit of operating loss carry forwards |      | (36,214) 
|                                                      |      |          
|Income tax recovery                                   | $    | -        



Significant components of the Companys future tax assets, based on the statutory income tax rate of 34% (2003  34%), are as follows:



|                           | 2004 | 2003       
|-------------------------- | ---- | -----------
|                           |      |            
|Deferred income tax assets |      |            
|Loss carry forwards        | $    | 1,368,214  
|Valuation allowance        |      | (1,368,214)
|                           |      |            
|                           | $    | -          



The Company has approximately $4,031,000 (2003 - $3,917,000) of operating loss carry forwards which expire beginning in 2017.



The Company has provided a valuation allowance against its deferred income tax assets given that it is in the exploration stage and it is more likely than not that these benefits will not be realized.



9.

RELATED PARTY TRANSACTIONS



Unless disclosed elsewhere in the financial statements, the following represents all significant balances and transactions entered into by the Company with its directors, shareholders or with companies related by virtue of common ownership or common directors:



During the year ended December 31, 2004, the Company paid or accrued $81,000 (2003 - $81,000) in consulting fees to directors and to a company related by a common director.

---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004



9.

RELATED PARTY TRANSACTIONS (Continued)



These transactions were in the normal course of operations and were measured at the exchange amount, which represented the amount of consideration established and agreed to by the related parties.



10.

COMMITMENTS



i)

At December 31, 2004, the Company has future commitments consisting of renewed director employment agreements with two directors of the Company for annual salaries of $75,000 for one director and $6,000 for the other director until December 31, 2005.

ii)

The commitment for rent on the Company premises is on a month-to-month basis.



11.

PROVISION FOR SETTLEMENT OF LITIGATION



On October 11, 2002, a judgment, in the amount of $139,133, was entered in the District Court of the Seventh Judicial District of the State of Idaho, in and for the County of Bonneville, against the Company for damages sought for breach of contract under an advertising agreement.  A provision for loss in the amount of the judgment was booked in the financial statements in 2002.



12.

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS



During the year ended December 31, 2004, the following non-cash investing and financing activities occurred:



i)

The Company issued 15,000,000 shares of common stock on settlements of notes payable totalling $150,000.

ii)

The Company issued 9,000,000 shares of common stock on settlement of an assignment of an amount due to a related party totalling $90,000.

iii)

The Company issued 1,500,000 shares of common stock on settlement of well management and maintenance costs totaling $60,000.



During the year ended December 31, 2003, the following non-cash investing and financing activities occurred:



i)

The Company issued 11,750,000 shares of common stock on settlements of a portion of the note payable totalling $47,000.

ii)

The Company issued 1,213,650 shares of common stock on settlements of accounts payable totalling $22,273.

iii)

The Company issued 6,900,000 shares of common stock on settlement of an amount due to a related party totalling $69,000.

iv)

The Company issued 825,000 shares of common stock on settlement of drilling costs totaling $71,000; 700,000 shares of common stock for website consulting services totaling $24,500; and 386,350 shares of common stock for professional services totaling $9,727.

---



LITEWAVE CORP.

(An Exploration Stage Company)



NOTES TO FINANCIAL STATEMENTS

(Stated in U.S. Dollars)



DECEMBER 31, 2004





13.

SUBSEQUENT EVENTS



i)

In January 2005, the Company received $100,000 under a loan agreement entered into in December 2004 (Note 6(i)).



ii)

The loans described in Note 6(i) matured in April 2005.  The Company is seeking an extension of the terms with the related corporations.  Given the nature of the relationship with the related corporations, the Company believes that an extension will be granted on reasonable terms.









SIGNATURES



The following pages include the Signatures page for this Form 10-KSB, and two separate Certifications of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) of the company.



The first form of Certification is required by Rule 13a -14 under the Securities Exchange Act of 1934 (the Exchange Act) in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). The Section 302 Certification includes references to an evaluation of the effectiveness of the design and operation of the company's "disclosure controls and procedures" and its "internal controls and procedures for financial reporting". Item 3 of Part I of this Quarterly Report presents the conclusions of the COO/CFO about the effectiveness of such controls based on and as of the date of such evaluation.



The second form of Certification is required by Section 906 of the Sarbanes -Oxley Act of 2002 (section 1350 of chapter 63 of title 18 of the United States Code).



In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.





LITEWAVE CORP.



Dated:      May 19, 2005





By: /s/ Ian Lambert

Ian Lambert

President, Chief Executive Officer, Director



/s/ Harvey Lawson

Harvey Lawson,

Secretary/Treasurer, Chief Financial Officer, Director



---



Exhibit 31.1



CERTIFICATION

I, Ian D. Lambert, certify that:





1.   I have reviewed this annual report on Form 10-KSB of Litewave Corp.;



2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly

report;



3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;



4.   The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this annual report is being prepared;



b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and



c)   presented in this annual report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date;



5.   The registrant's other certifying officers and I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent

functions):



a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and



6.   The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any correction actions with

regard to significant deficiencies and material weaknesses.



Dated:      May 19, 2005





By: /s/ Ian Lambert

Ian Lambert

Chief Executive Officer



---



Exhibit 31.2



CERTIFICATION

I, Harvey Lawson, certify that:



1.   I have reviewed this annual report on Form 10-KSB of Litewave Corp.;





2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly

report;



3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;



4.   The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this annual report is being prepared;



b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and



c)   presented in this annual report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date;



5.   The registrant's other certifying officers and I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent

functions):



a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and



6.   The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any correction actions with

regard to significant deficiencies and material weaknesses.



Dated:      May 19, 2005





By: /s/ Harvey Lawson

Harvey Lawson

Chief Financial Officer



---



Exhibit 16.2



Morgan & Company

1488-700 West Georgia Street

P.O. Box 10007 Pacific Center

Vancouver, British Columbia

V7Y 1A1 Canada





March 28, 2005



Office of the Chief Accountant

Securities and Exchange Commission

450 West Fifth Street NW

Washington, DC

20549  USA



Ladies and Gentlemen:



RE:

LITEWAVE CORP.

COMMISSION FILE NO. 000-27713



We have read the statements about our firm included under Item 4 in the Form 8-K, dated March 28, 2005, of Litewave Corp. (the Company) filed with the Securities and Exchange Commission and are in agreement with the statements contained therein, except that (1) in reference to Item (a)(i), we are not in a position to agree or disagree with the Companys statement that we confirmed that we would no longer be representing the Company as its accountants as no formal communication was received by us regarding the dismissal, and (2) in reference to Item (a)(iii), we are not in a position to confirm that the change was ratified by the Board of Directors of the Company on March 28, 2005 as no formal written communication  was received by us regarding the change.



For the most recent fiscal period of 2003, there has been no disagreement between Litewave Corp. and Morgan & Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of Morgan & Company would have caused it to make a reference to the subject matter of the disagreement in connection with its reports.



Yours truly,



Morgan & Company



Chartered Accountants





MORGAN & COMPANY

Chartered Accountants



---





EXHIBIT 32.1



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report on Form 10-KSB of Litewave Corp. (the "Company") for the annual period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ian D. Lambert, Chief Executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C.  1350, as adopted pursuant to 906 of the

Sarbanes-Oxley Act of 2002, that:





(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



By:   /s/ Ian D. Lambert

Ian D. Lambert

Chief Executive Officer

May 19, 2005

---



EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report on Form 10-KSB of Litewave Corp. (the "Company") for the annual period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Harvey Lawson, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C.  1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:



(3) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (4) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



By:   /s/ Harvey Lawson

Harvey Lawson

Chief Financial Officer

May 19, 2005