SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-KSB





(Mark
One)




x
            Annual
      report pursuant to section 13 or 15(d) of the Securities Exchange Act of
      1934 [Fee
      Required] for the fiscal year ended October 31, 2008
    oro
            Transition
      report pursuant to section 13 or 15(d) of the Securities Exchange Act of
      1934 [No Fee
      Required] for the transition period from _________ to
      _________.





Commission
File No. 333-31238





SUPERCLICK,
INC.


(Exact
name of registrant as specified in its charter)





Washington
                  
                  52-2219677(State
      or other jurisdiction of
                  
                  (I.R.S.
      Employer Identification Number)incorporation
      or organization)




10222
St-Michel Blvd., Suite 300


Montreal,
Quebec, H1H 5H1


(Address, Including Zip
Code, Including Area Code, Of Registrant's mailing address in
Montreal)





Registrant’s
telephone number, including area code:


(514)
847-0333





SECURITIES
REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:


None





SECURITIES
REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:


Common
Stock, par value $.0006 per share




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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. o









The
Registrant’s revenues for the year ended October 31, 2008 were
$6,762,867.




The
aggregate market value of the Registrant's common stock held by non-affiliates
of the Registrant on December 1, 2008 (based on the closing sale price of US
$0.05 per share of the Registrant's common stock, as reported on
Over-The-Counter Bulletin Board on that date) was approximately U.S. $1,993,451.
Common stock held by each officer and director and by each person known to the
Registrant to own 5% or more of the outstanding common stock has been excluded
in that those persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes.




The
number of shares of the Registrant's common stock outstanding on December 1,
2008 was 44,937,251.





Transitional
Small Business Disclosure Format (Check one): YES o NO x





TABLE OF
CONTENTS





ITEM
      NUMBER AND CAPTION
                                    
                                    PAGEForward-Looking
      Statements
                                    
                                    1PART I1.
                                    Description
      of Business
                                    
                                    12.
                                    Description
      of Property
                                    
                                    113.
                                    Legal
      Proceedings
                                    
                                    114.
                                    Submission
      of Matters to a Vote of Security Holders
                                    
                                    11PART II5.
                                    Market
      for Common Equity and Related Stockholder Matters
                                    
                                    126.
                                    Management's
      Discussion and Analysis of Financial Condition and
      Results of Operations
                                    
                                    177.
                                    Financial
      Statements
                                    
                                    248.
                                    Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                                    
                                    258A.
                                    Controls
      and Procedures
                                    
                                    25PART III9.
                                    Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act
                                    
                                    2610.
                                    Executive
      Compensation
                                    
                                    2811.
                                    Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                    
                                    3212.
                                    Certain
      Relationships and Related Transactions
                                    
                                    3313.
                                    Exhibits
      and Reports on Form 8-K
                                    
                                    3314.
                                    Principal
      Accountant Fees and Services
                                    
                                    35










FORWARD-LOOKING
STATEMENTS





Except
for historical information, this report contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements involve risks and uncertainties, including, among
other things, statements regarding our business strategy, future revenues and
anticipated costs and expenses. Such forward-looking statements include, among
others, those statements including the words "expects," "anticipates,"
"intends," "believes" and similar language. Our actual results may differ
significantly from those projected in the forward-looking statements. Factors
that might cause or contribute to such differences include, but are not limited
to, those discussed in the section "Management's Discussion and Analysis of
Financial Condition and Results of Operations." You are cautioned not to place
undue reliance on the forward-looking statements, which speak only as of the
date of this report. We undertake no obligation to publicly release any
revisions to the forward-looking statements or reflect events or circumstances
taking place after the date of this document.





PART
I





ITEM
1.DESCRIPTION OF BUSINESS




SUMMARY
OF CORPORATE HISTORY





Superclick,
Inc. (“Superclick” or the “Company”) was founded on June 3, 1999 as a holding
company with the primary objective of acquisitions.





Pursuant
to a share purchase (the “Share Purchase Agreement”) agreement dated October 7,
2003, Superclick, Inc. completed an acquisition of Superclick Networks,
Inc.  The acquisition was accounted for as a recapitalization effected
by a reverse merger, wherein Superclick Networks, Inc. is considered the
acquirer for accounting and financial reporting purposes.  The
pre-merger assets and liabilities of the acquired entity have been brought
forward at their book value and no goodwill has been recognized.  The
accumulated deficit of Superclick Networks, Inc. has been brought forward, and
common stock and additional paid-in-capital of the combined company have been
retroactively restated to give effect to the exchange rates as set forth in the
merger agreement.





Superclick
Networks, Inc. (“SNI”) was organized on August 24, 2000, in Montreal, Quebec,
Canada.  SNI is a software development company in the business of
providing and installing broadband high speed Internet connection equipment in
hotels on a worldwide basis, and 24/7/365 customer support at it’s
Montreal-based call center.





On
October 6, 2003, Superclick, Inc. amended its articles of incorporation by
changing the name of the Company from Grand Prix Sports, Inc. to Superclick,
Inc.


1





Pursuant
to the Share Purchase Agreement, Superclick acquired 100% of the issued and
outstanding shares of SNI from its shareholders.  In consideration for
acquiring all of SNI’s shares Superclick issued to SNI’s shareholders 14,025,800
shares of Superclick, Inc.’s common stock.  As a result of the
acquisition, the former shareholders of SNI held immediately after the
acquisition 71.7% of the issued and outstanding shares of the Subsidiary’s
common stock.  The remaining 28.3% was held by Superclick, Inc.’s
shareholders.  In addition, and pursuant to the Share Purchase
Agreement, Superclick changed its year-end to October 31 to coincide with the
year-end of SNI. In October, the Company also retroactively affected a 1 for 6
common stock split and retroactively assigned $0.0006 par value to common stock
where no value had been previously stated.  All share and per share
amounts shown in these financial statements reflect the stock split for all
periods presented.





The
Company emerged from the development stage during the year ended October 31,
2005. The primary objective is to continue to globally expand the installed room
base and to provide 24/7/365 customer support. At present, the Company has
installed its IP management products in approximately 120,000
rooms.





In order
to manage existing operations we will rely on the working capital generated by
the Company’s operations as well as to seek additional debt or equity financing.
However, there can be no assurance that any such additional financing will be
available on terms, in amounts, or at timing acceptable to us, if available at
all.





BUSINESS





Superclick
provides IP-based data management solutions via its SIMS (“Superclick Internet
Management System”) supported by a 24/7/365 customer support center to the
hospitality market. SIMSTM is Linux-based software, typically referred to as
Visitor-Based Networking (VBN) software, which manages the provisioning, and
administration of Internet access over private and local area networks
(“LANS”).





We market
and install SIMSTM as part of a turnkey hardware and software deployment for our
customers and also provide guest service support through our 24/7/365 helpdesk.
SIMSTM is typically deployed with hardware which provides High Speed Internet
Access (HSIA) via Ethernet, DSL, WiFi or in combination. Our SIMSTM platform has
been successfully deployed in approximately 575 hotels throughout North America,
Europe and the Caribbean.





Our
customers include the Fairmont Raffles Hotels, Four Seasons Hotels Limited,
Commonwealth Hospitality Group, InterContinental Hotels Group, Mandarin Oriental
Hospitality Group, Candlewood Suites, Staybridge Suites, Comfort Inn, Crowne
Plaza, Doubletree, Fairfield Inn, Four Points by Sheraton, Hampton Inn &
Suites, Hilton, Holiday Inn, Hampton Inn, JW Marriott, Novotel, Quality Suites,
Radisson, Residence Inn, Sheraton, Westin and Wyndham.





Business
Model





Our
current business model is to provide our customers with a turnkey installation
of a SIMSTM-based HSIA system. Customers purchase the hardware, software and
installation services outright, retaining control of how the service is marketed
to guests and other users, as well as any associated revenue charged. This
component of our business model provides us with one-time
revenue.


2





We also
provide customers with 24/7/365 guest support services through toll-free access
to our Montreal-based helpdesk. This service carries a flat fee on a per-room,
per-year basis. As customers are added to our client-list, the customer support
revenue grows accordingly. This provides the Company with a second source of
revenue, which is recurring.





In
addition, we continue to develop a suite of “IP (Internet Protocol) services”
with revenue generating applications that allow customers in select markets with
the ability to leverage their Internet infrastructure to increase revenues and
increase their potential return on investment. We are able to create revenue
sharing arrangements with hotels based on these applications, creating yet
another potential revenue stream to its business model.




COMPETITION





Most of
our business is awarded by hoteliers and property management companies through
competitive procurements. The Internet management services industry is highly
competitive and many of our competitors are larger and have greater financial
resources than we do. We obtain much of our business on the basis of proposals
to new and existing customers. Competition usually centers on successful past
performance, technical capability, management, and price.





We have
many competitors that contend for the same customers. They are competent,
experienced and range in size from several hundred of thousands of dollars in
annual revenue to several million of dollars in annual revenue. Many of our
competitors also have significantly greater resrouces than we do. Approximately
50% of our revenue is based on one time installation type sales and we continue
to look at ways to improve our recurring revenue model through service and
customer support. We have achieved a level of trust with each of our clients
that is comfortable, but not secure. We recognize that our niche areas are
desirable to other professional service firms, and we continuously seek to
improve within these niches rather than expanding to new areas.




INTELLECTUAL
PROPERTY AND OTHER PROPRIETARY RIGHTS





We
believe that our intellectual property is important to our success, and we try
to protect it as described above and through the maintenance of trade secrets.
We feel that name brand recognition will make our products and services stand
out and become the recognized name in our industry.  However, the
steps we take to protect our intellectual property may be inadequate.
Unauthorized parties may try to disclose, obtain or use our proprietary
information, which could harm our business. Others may claim that we have
violated their proprietary rights or infringed on their intellectual property.
Any such claims could subject us to significant liability for damages and
invalidate our proprietary rights. Any efforts to protect or defend our rights
could be time-consuming and costly. Other parties may also independently develop
similar or competing technology.


3





On
November 19, 2007, we filed an application for patent pursuant to the
regulations of the United States Patent and Trademark Office (USPTO). The law
firm of Fish & Richardson P.C. was engaged to advise and assist us with the
filing.





RISK
FACTORS





Interested
persons should carefully consider the risks described below in evaluating our
company. Additional risks and uncertainties not presently known to us, or that
we currently consider immaterial, may also impair our business operations. If
any of the following risks actually occur, our business, financial condition or
results of operations could be materially adversely affected. In that case, the
trading price of our common stock would likely decline.




Our continued operations will depend
on whether we are able to raise additional funds through various potential
sources, such as equity and debt financing, other collaborative agreements,
strategic alliances, and our ability to realize the full potential of our
technology.





Such
additional funds may not become available on acceptable terms and there can be
no assurance that any additional funding that we obtain will be sufficient to
meet our needs in the long term.   Through October 31, 2008, a
significant portion of our financing has been through private placements of
common stock warrants and convertible debt.  Unless our operations
continue to generate significant revenues, we will continue to fund operations
from cash on hand and through similar sources of capital previously
described.   We can give no assurances that any additional
capital that we are able to obtain will be sufficient to meet our
needs.   Although the Company was profitable in fiscal 2008, the
need for additional equity, debt financing or the entering into a strategic
alliance may be required in order to sustain operations.





We
may have exposure to a legal action brought against several vendors in our
industry and five of our customers.





We have
been made aware that several companies providing public Internet access have
been named in a legal suit brought by a party claiming patent infringement. We
have not been named in the action, although some companies that have been named
are our customers. We have provided indemnification in our service contracts to
several of these customers. We believe that it is too early at this stage to
determine whether we have any exposure to the suit, but we have retained and
consulted legal counsel to maintain a vigilant and proactive posture. We are
actively discussing with our counsel ways that we can limit our liability. We
are not defendants to the suit, nor have we retained litigation counsel on the
matter.


4





We will
continue to monitor the situation. If we are named in the suit, it will require
us to incur legal expenses which will have a negative impact on our
profitability. This in turn, may have a negative impact on our stock
price.





If
our products or services employ technology that infringes the proprietary rights
of others, we may be subject to infringement claims, forced to pay certain fees
to license technology or be required to stop selling our products.





Our
business could be harmed if we infringe upon the intellectual property rights of
others. We have been notified in the past – and may be in the future – that we
may be infringing intellectual property rights possessed by third parties. If
any such claims are asserted, we may seek to enter into royalty or licensing
agreements. There is a risk in these situations that no license will be
available or that a license will not be available on reasonable terms,
precluding our use of the applicable technology. Alternatively, we may decide to
litigate such claims or to design around the patented technology. These actions
could be costly and would divert the efforts and attention of our management and
technical personnel. A successful claim of infringement against us or our
failure or inability to license infringed or similar technology could damage our
business to the extent we are required to pay substantial monetary damages or
if, as a result of a successful claim, we are unable to sell our products or
services without redeveloping them or are otherwise forced to incur significant
additional expense. As a result, any infringement claims by third parties or
claims of indemnification by customers resulting from infringement claims,
whether or not proven to be true, may harm our business and
prospects.





We have very limited assets upon
which to rely for adjusting to business variations and for growing new
businesses.





If we are
to grow and expand our operations, we will need to raise significant amounts of
additional capital.   There can be no assurance that we will be
successful in raising a sufficient amount of additional capital, or if we are
successful, that we will be able to raise capital on reasonable
terms.   If we do raise additional capital, our existing
shareholders may incur substantial and immediate dilution.





Risks
Related To Our Business:





Our
business could be adversely impacted by conditions affecting the lodging
industry’s performance.





Our
results are closely tied to the performance of the lodging industry, where
occupancy rates may fluctuate resulting from various factors such as the current
global economic crisis, acts of terrorism, war, or public health issues. If our
hotel customers are constrained by cash flow and access to credit, our business
may be adversely affected. The overall travel industry can be, and has been in
the past, adversely affected by weaker general economic conditions, geopolitical
instability and concerns about public health.


5





Our
revenue and operating results may fluctuate significantly from quarter to
quarter, and fluctuations in operating results could cause its stock price to
decline.





Our
revenue and operating results may vary significantly from quarter-to-quarter due
to a number of factors.   In future quarters, operating results
may be below the expectations of public market analysis or investors, and the
price of its common stock may decline.   Factors that could cause
quarterly fluctuations include:





§
            the
      beginning and ending of significant contracts during a
      quarter;


§
            the
      number, size and scope of the installation
  contracts;


§
            maintenance
      contracts can create variations in revenue levels and may cause
      fluctuations in quarterly results;


§
            fluctuations
      in demand for services resulting from budget cuts, project delays,
      cyclical downturns or similar events, including the recent economic
      downturn;


§
            the
      possibility and subsequent duration of conflicts involving the United
      States military could cause delays in program operations related to our
      hospitality clients by reducing
travel;


§
            clients'
      decisions to divert resources to other projects, which may limit clients'
      resources that would otherwise be allocated to solutions that we
      provide;


§
            recessionary
      pressures in the United States may reduce the level of travel for business
      and leisure, which may, in turn limit our clients’ resources that would
      otherwise be allocated to solutions that we
  provide;


§
            reductions
      in the prices of services offered by competitors;
  and


§
            because
      a significant portion of expenses are relatively fixed, a variation in the
      number of installations or the timing of the initiation or the completion
      of client contracts may cause significant variations in operating results
      from quarter-to-quarter and could result in
  losses.




Any
inability to adequately retain or protect our employees, customer relationships
and proprietary technology could harm our ability to compete.





Our
future success and ability to compete depends in part upon our employees,
customer relationships, proprietary technology and trademarks, which we attempt
to protect with a combination of patent, copyright, trademark and trade secret
claims, as well as with our confidentiality procedures and contractual
provisions. These legal protections afford only limited protection and are
time-consuming and expensive to obtain and/or maintain. Further, despite our
efforts, we may be unable to prevent third parties from soliciting our employees
or customers or infringing upon or misappropriating our intellectual
property.




6


Our
employees, customer relationships and intellectual property may not be adequate
to provide us with a competitive advantage or to prevent competitors from
entering the markets for our products and services. Additionally, our
competitors could independently develop non-infringing technologies that are
competitive with, and equivalent or superior to, our technology. Monitoring
infringement and/or misappropriation of intellectual property can be difficult,
and there is no guarantee that we would detect any infringement or
misappropriation of our proprietary rights.


Even if
we do detect infringement or misappropriation of our proprietary rights,
litigation to enforce these rights could cause us to divert financial and other
resources away from our business operations. The departure of certain key
personnel could harm the financial condition of the Company.





Sandro
Natale, one of our founders and our current CEO, is intimately involved in our
business and has day-to-day relationships with critical customers. Mr Natale is
also critical to our product development.





Competition
for highly skilled business, product development, technical and other personnel
is intense, and there can be no assurance that we will be successful in
recruiting new personnel or in retaining our existing personnel. A failure on
our part to retain the services of key personnel could have a material adverse
effect on our operating results and financial condition. We do not maintain key
man life insurance on any of our employees.





The
market in which we compete is intensely competitive and actions by competitors
could render our services less competitive, causing revenue and income to
decline.





The
ability to compete depends on a number of factors outside of our control,
including:





§
            the
      prices at which others offer competitive systems, including aggressive
      price competition and discounting on individual contracts, which may
      become increasingly prevalent due to worsening economic
      conditions;


§
            the
      ability of competitors to undertake more extensive marketing
      campaigns;


§
            the
      extent, if any, to which competitors develop proprietary offerings that
      improve their ability to compete;


§
            the
      ability of our  customers to supply the solutions themselves;
      and


§
            the
      extent of competitors' responsiveness to customer
  needs.





We may
not be able to compete effectively on these or other
factors.   If we are unable to compete effectively, market
position, and therefore revenue and profitability, would decline.





International
business exposes our company to various foreign requirements, which could
interfere with business or operations and could result in increased expenses and
declining profitability.





International
operations create special risks, including:





§
            statutory
      requirements, which may impair our ability to expatriate foreign profits
      to help fund domestic operations;





7







§
            greater
      difficulties in managing and supplying turnkey installation at foreign
      locations; §
              cultural
      differences that adversely affect
utilization;


§
            unexpected
      changes in trading policies, legal and regulatory requirements, tariffs
      and other foreign taxes;


§
            greater
      difficulties in enforcing agreements with clients and collecting accounts
      receivable;


§
            the
      tax system of foreign countries, which may tax our foreign income at
      higher rates than in the United States and may subject foreign earnings to
      withholding requirements or tariffs, exchange controls or other
      restrictions;


§
            legal
      requirements and regulations of various foreign countries, which may make
      compliance by us with such laws and regulations difficult and may make
      enforcement of our intellectual property rights more difficult;
      and


§
            fluctuations
      in currency exchange rates, which may affect demand for our products and
      services and may adversely affect the profitability in United States
      dollars of services provided by us in foreign markets where payment for
      its products and services is made in the local currency; and general
      economic conditions in the foreign countries into which we sell, which
      could have an adverse impact on its earnings from operations in those
      countries.





If
we and/or our product offerings fail to perform effectively, our reputation, and
therefore our competitive position and financial performance, could be
harmed.





Many of
our new installation opportunities come from existing clients or from referrals
by existing clients.   Therefore, growth is dependent on our
reputation and on client satisfaction.   The failure to provide
solutions or perform services that meet a client's expectations may damage our
reputation and harm its ability to attract new business.   Damage
to our reputation arising from client dissatisfaction could therefore harm
financial performance.





The
inability to protect intellectual property could harm our competitive position
and financial performance.





Despite
efforts to protect proprietary rights from unauthorized use or disclosure,
parties, including former employees or consultants, may attempt to disclose,
obtain or use our solutions or technologies.   The steps we have
taken may not prevent misappropriation of solutions or technologies,
particularly in foreign countries where laws or law enforcement practices may
not protect proprietary rights as fully as in the United
States.   Unauthorized disclosure of proprietary information
could make our solutions and technologies available to others and harm our
competitive position.





There
are risks associated with our planned growth.





We have
very limited assets upon which to rely for adjusting to business variations and
for growing new businesses. Should we look for new funding to assist in the
acquisition of other profitable businesses, it is uncertain whether such funds
will be available. If we are to grow and expand our operations, we will need to
raise significant amounts of additional capital. There can be no assurance that
we will be successful in raising a sufficient amount of additional capital, or
if we are successful, that we will be able to raise capital on reasonable terms.
If we do raise additional capital, our existing shareholders may incur
substantial and immediate dilution.


8





The
sales cycle for our products is lengthy and unpredictable.





The sales
cycle between an initial customer contact and execution of a contract or license
agreement with a customer, or purchase of our products, can vary widely.
Initially, we must educate our customers about the potential applications and
benefits association with our products. In addition, changes in our customers’
budgets, or the priority they assign to control network administration and
development could also affect the sales cycle.





We
may be unable to promote and expand acceptance to our Media Distribution System
(MDS) application.





We have
invested significant resources, time and manpower into the development and
commercialization of our MDS application. We do not believe that there are any
directly competitive offerings in the market and as such, we are faced with a
challenge to educate our clients’ to the benefits of MDS. Additionally, we are
faced with the challenge of developing an attractive advertising and marketing
model that for marketing firms and advertisers that will support our sales
efforts into the hospitality market. Our MDS application may not be successful
or we may not be able to establish a viable commercial sales model that can
scale, which would have a material adverse affect on our revenues, results of
operations and financial condition as we increase our investment in its
development and commitment to is commercialization.





Due
to our foreign client installations in Canada, the Caribbean and Europe, we are
exposed to transaction adjustments with respect to foreign
currency.





Our
functional currency is the United States dollar. However, our operating
functional currency is the Canadian Dollar. Under United States dollar
functional currency, the financial statements of foreign subsidiaries are
remeasured from the recording currency to the United States
dollar.   The resulting remeasurement adjustment has been
recorded as separate component of stockholder’s equity. We believe that
operating under United States dollar functional currency, combined with
transacting business in countries with traditionally stable currencies mitigates
the effect of any near-term foreign currency transaction adjustments on our
financial position, results of operations and cash flows.





We have
not engaged in foreign currency hedging transactions nor do we have any
derivative financial instruments.  However, going forward, we will
assess the need to enter into hedging transactions to limit its risk due to
fluctuations in exchange rates.


9





Risks
Relating To Our Common Stock:





There
is a limited market for our common stock.





Our
common stock is traded in the Over-the-Counter Bulletin Board
market.  This may cause delays in the timing of transactions,
reductions in the number and quality of securities analysts' reporting on us,
and the extent of our coverage in the media.  Trading in our common
stock has been sporadic, and at present, there is a limited market for
it.  There can be no assurance that a stronger market will
develop.  Even if such a market does develop, it may not be
sustained.





Shareholders
may suffer dilution upon the exercise of outstanding options and warrants and
the conversion of convertible notes.




As of
October 31, 2008, we had exercisable stock options outstanding to purchase
13,952,356 shares of common stock, warrants to purchase 965,997 shares of common
stock, and convertible debentures convertible in accordance with a formula based
on the 45 day trailing average price of our common stock. To the extent
such options or warrants are exercised and convertible notes are converted,
there will be further dilution. In addition, in the event that any future
financing should be in the form of securities convertible into, or exchangeable
for, equity securities, investors may experience additional dilution upon the
conversion or exchange of such securities.




Future
sales of our common stock by existing shareholders under Rule 144 could decrease
the trading price of our common stock.





As of
December 1, 2008, a total of 10,624,334 shares of our outstanding common stock
were "restricted securities" and could be sold in the public markets only in
compliance with Rule 144 adopted under the Securities Act of 1933 or other
applicable exemptions from registration. Rule 144 provides that a person holding
restricted securities for a period of one year may thereafter sell, in brokerage
transactions, an amount not exceeding in any three-month period the greater of
either (i) 1% of the issuer's outstanding common stock or (ii) the average
weekly trading volume in the securities during a period of four calendar weeks
immediately preceding the sale. Persons who are not affiliated with the issuer
and who have held their restricted securities for at least two years are not
subject to the volume limitation. Possible or actual sales of our common stock
by present shareholders under Rule 144 could have a depressive effect on the
price of our common stock.


10





Our
common stock is subject to "penny stock" rules.





Our
common stock is classified as a penny stock by the Securities and Exchange
Commission. This classification severely and adversely affects the market
liquidity for our common stock. The Commission has adopted Rule 15g-9, which
establishes the definition of a "penny stock," for the purposes relevant to us,
as any equity security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience objectives of the person; and
(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, sets forth (i) the basis on
which the broker or dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in public offerings and secondary trading and about the commissions
payable to the broker-dealer and registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.




ITEM
2:                      DESCRIPTION
OF PROPERTY




Our
research and development activities and administrative offices are located in
Montreal, Quebec, Canada.  Superclick, Inc. does not own any real
property. The following information presents certain information about our
leased properties:





Approximate
                                        
                                        Date CurrentLocation
                                        
                                        Square Feet
                                        
                                        Expires
                                        
                                        
                                        Monthly Rent10222
      Boul. St-Michel
                                          Suite
      300
                                          Montreal,
      Quebec H1H 5H1
                                          Canada
                                        
                                        5,900 sq. ft.
                                        
                                        Sept. 30, 2009
                                        
                                        US$
                                        4,867




ITEM
3. LEGAL PROCEEDINGS





We are
not aware of any pending or threatened legal proceedings that, if adversely
determined, would have a material adverse effect on us.




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





No
matters were submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this report.


11





PART
II





ITEM
5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





Our
common stock trades on the OTC Bulletin Board under the symbol "SPCK.OB". The
following table lists the high and low closing price for our common stock as
quoted on the OTC Bulletin Board during each quarter within the last two fiscal
years.





These
prices represent inter-dealer quotations without retail markup, markdown, or
commission and may not necessarily represent actual transactions.





Low
                        
                        
                        High2007First
      Quarter
                        
                        $
                        .04
                        
                        
                        $
                        .07Second
      Quarter
                        
                        $
                        .06
                        
                        
                        $
                        .13Third
      Quarter
                        
                        $
                        .07
                        
                        
                        $
                        .26Fourth
      Quarter
                        
                        $
                        .18
                        
                        
                        $
                        .252008First
      Quarter
                        
                        $
                        .12
                        
                        
                        $
                        .19Second
      Quarter
                        
                        $
                        .09
                        
                        
                        $
                        .17Third
      Quarter
                        
                        $
                        .10
                        
                        
                        $
                        .20Fourth
      Quarter
                        
                        $
                        .08
                        
                        
                        $
                        .14





On
December 1, 2008, the closing price was $0.05 for our stock.





Holders





Including
equity held through CEDE, there are approximately fifty-four (54) holders of
record of common equity as of December 1, 2008.





Dividends





We have
not declared any dividends on our common stock during the last three fiscal
years and we do not expect to declare dividends in the foreseeable future since
we intend to utilize our earnings, if any, to finance our future growth,
including possible acquisitions.





Transfer
Agent


The
Transfer Agent and Registrar for our common stock is First American Stock
Transfer. Its address is 706 East Bell Road, Suite 202, Phoenix, AZ, 85022 and
its telephone number at that location is 602-485-1346.


12





Equity
Compensation Plans





The 2004 Incentive Stock
Option Plan





On April
8, 2004, the Board of Directors of the Company adopted the 2004 Incentive Stock
Option Plan. This Plan is a plan for key Employees (including officers and
employee directors) and Consultants of the Company and its Affiliates and is
intended to advance the best interests of the Company, its Affiliates, and its
stockholders by providing those persons who have substantial responsibility for
the management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.





The total
number of shares of Stock set aside for Awards may be granted under the Plan is
2,000,000 shares. The Company may issue each of the following under this Plan:
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award The Plan was effective April 9, 2004 (the
"Effective Date"), provided that within one year of the Effective Date, the Plan
shall have been approved by at least a majority vote of stockholders. No
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten
years after the Effective Date.





During
the year ended October31, 2005, the Board of Directors authorized an increase in
the shares allotted under the plan to 3,500,000 shares.





During
the year ended October 31, 2006, the Board of Directors authorized an increase
in the shares allotted under the Plan to 30,000,000 shares.  Also,
during fiscal year 2006, 111,667 options were canceled due to employee
terminations, 376,250 options that were out-of-the-money at $0.50 and $0.60 were
exchanged for new options at $0.05 to purchase 15,523,750 shares and no options
were exercised.  The balance of options outstanding at the end of the
year was 16,732,148.  The Company granted 15,900,000 fully vested
options to employees on October 30, 2006 and valued the options utilizing the
Black Scholes Option Pricing Model with the following inputs: Risk-free interest
rate 4.67%, Volatility 37% (here we used the standard deviation of closing share
prices from November 1, 2002 through October 30, 2006, or 4 years), duration of
4 years, strike price of $.05, which yielded a per share fair market value of
$.0179.   The Company recognized $285,078 of compensation expense
related to the 15,900,000 grants and $83,551 for previously granted options
bringing the total recognized option related compensation expense for the fiscal
year ended October 31, 2006 to $368,629.  The Company has recorded
compensation expense of $767,017 through October 31, 2006.





During
the year ended October 31, 2007, 490,000 options were exercised resulting in
$24,500 to the company and the issuance of 490,000 shares of common
stock.  An additional 230,000 options were exercised on October 31,
2007 resulting in $11,500 received with shares issued in four tranches of 57,500
per month subsequent to the fiscal year ended October 31, 2007. Also, during the
year, the Company canceled 1,549,792 options (874,792 options due to employee
terminations and 675,000 voluntary cancellations from upper
management).




13


During
the year ended October 31, 2008, no options were canceled or
granted.  740,000 shares of common stock were issued pursuant to
option exercises, including 1) 230,000 shares issued pursuant to prior year
option exercises, and; 2) 510,000 shares issued pursuant to options exercised
during 2008 which resulted in $25,500 to the company.  No other option
activity occurred.





The
following table summarizes the Company's stock option activity for the year
ended October 31, 2008:





2008Shares
                              
                              
                              Weighted
      Average
                                Exercise
      PriceOutstanding
      at beginning of year
                              
                              
                              14,462,356
                              
                              
                              $
                              0.077Granted
                              
                              
                              -
                              
                              
                              
                              -Forfeited
                              
                              
                              -
                              
                              
                              
                              -Exercised
                              
                              
                              (510,000
                              )
                              
                              
                              0.050Outstanding
      at end of year
                              
                              
                              13,952,356
                              
                              
                              
                              0.075Options
      exerciseable at year end
                              
                              
                              13,952,356





2004 Superclick, Inc.
Non-Employee Director's Stock Incentive Plan





On
December 31, 2003, the Board of Directors of the Company adopted the 2004
Superclick, Inc.  Non-Employee Director's Stock Incentive Plan (the
"Stock Incentive Plan").  The Stock Incentive Plan provides for the
issuance of Options, Restricted Stock, and/or Deferred Stock to an
Awardee.  The total number of shares of Common Stock which may be
awarded under the Plan is 1,500,000.  If any awarded shares are
forfeited, they become available for future issuance.  An annual
aggregate limit of 300,000 shares (including Options, Restricted Stock, and
Deferred Stock) is set for any individual Director.





The Stock
Incentive Plan has a duration of ten years commencing on January 1,
2004.  Awardees are defined as director to whom an award is
made.  An eligible director is any person who on the date of grant is
a member of the Board of Directors of the Company and is not an employee of the
Company or of any Subsidiary.  Stock Options are non-qualified
right-to-buy Options for the purchase of Common Stock of the
Company.  The term of each Option shall be ten years from the Date of
Grant.  The Option Price shall be the Fair Market Value of Superclick,
Inc. Common Stock on the date the Option is granted.  Under no
circumstances shall any Option vest in less than one year from the date of
grant.  Shares purchased upon exercise of an Option must be paid for
in full at the time of exercise either in cash or with currently owned
shares.  Neither the Committee on Directors and Governance nor the
Board of Directors may re-price any Option that is less than the option exercise
price.  Restricted Stock is Common Stock of the Company restricted as
to sale in such fashion as the Committee on Directors and Governance shall
determine.  Prior to the lifting of the restrictions, the Awardee will
be entitled to receive dividends from and to vote the shares of Restricted
Stock.


14





Common
Stock





Private Placement and
Warrant Activity





During
the year ended October 31, 2005, 100,000 “A” Warrants were exercised resulting
in gross proceeds of $60,000.  None of these warrants were exercised
during fiscal year 2006 and 2007.  During fiscal year 2007, 1,899,999
of these warrants expired leaving 200,000 outstanding as of October 31,
2007.





In August
of 2005, we issued $2,250,000 of convertible debentures with 965,997 warrants
attached.  These warrants were outstanding as of October 31,
2008.





Stock Issued for Debt
Repayment





During
the year ended October 31, 2006, the Company issued 4,618,993 shares of common
stock in exchange for $176,420 of interest payable and 1,158,838 shares of
common stock in exchange for $50,000 of principle related to the convertible
debentures.





During
the year ended October 31, 2007, the Company issued 2,094,503 shares of common
stock in exchange for $87,512 of interest payable and 2,751,856 shares of common
stock in exchange for $115,000 of principle related to the convertible
debentures.





During
the year ended October 31, 2008, the Company issued 1,996,585 shares of common
stock, including 1,846,182 shares in exchange for $200,135 of debenture
principle and 150,403 shares of in exchange for $16,342 of accrued interest
related to our debentures.





Stock issued for
Services





During
the year ended October 31, 2006, the Company issued 1,355,355 shares to the
members of the Board of Directors for services rendered.  Total value
of the issuances was $77,500.  Value for shares issued for services is
based on fair market value of our stock on the date of issuance.





During
the year ended October 31, 2007, the Company issued 867,429 shares for services
with 380,122 to directors for services rendered valued at $39,472, 75,000 shares
to outside advisors valued at $17,250, 412,307 shares to our Chairman, Todd
Pitcher for services rendered valued at $32,984 (See Note N) and 141,656 shares
issued in November 2008 for which the Company accrued $19,832 for director
compensation as of October 31, 2007 as reflected in out statement of
shareholder’s equity bringing the total value of stock issued and to be issued
to $109,538 during 2007.  Value for shares issued for services is
based on fair market value of our stock on the date of
issuance.


15





During
the year ended October 31, 2008, the Company issued 384,122 shares of common
stock in exchange for director services.  Of the 384,122 shares, 1)
141,656 shares were issued for services performed in fiscal year 2007 which
expense of $19,832 was recognized in our fiscal year ending October 31, 2007,
and; 2) 242,466 shares were issued for services valued at
$34,645.  The Company has accrued $18,000 to common stock payable for
director services performed.  We anticipate the issuance of common
stock for these services during our first fiscal quarter of 2009.





Stock
Options





On
October 30, 2006 the Board of Directors increased the employee stock option pool
established by the employee stock option plan to 30,000,000 from
3,500,000.





During
the year ended October 31, 2006, 111,667 options were canceled due to employee
terminations, 376,250 options were exchanged for new options, 15,523,750 shares
were granted and no options were exercised.  The balance of options
outstanding at the end of the year was 16,732,148.  The Company
granted 15,900,000 fully vested options to employees on October 30, 2006 and
valued the options utilizing the Black Scholes Option Pricing Model with the
following inputs: Risk-free interest rate 4.67%, Volatility 37% (here we used
the standard deviation of closing share prices from November 1, 2002 through
October 30, 2006, or 4 years), duration of 4 years, strike price of $.05 and
spot price of $.05, which yielded a per share fair market value of
$.0179.  Of the 15,900,000 grants, 376,250 represent new shares issued
in place of previously granted shares which were deeply out-of-the-money and
cancelled in conjunction with the new grants.  The Company recognized
$285,078 of compensation expense related to the 15,900,000 grants and $83,551
for previously granted options bringing the total recognized option related
compensation expense for the fiscal year ended October 31, 2006 to
$368,629.  The Company has recorded compensation expense of $767,017
through October 31, 2006.





During
the year ended October 31, 2007, 490,000 options were exercised resulting in
$24,500 to the company and the issuance of 490,000 shares of common
stock.  An additional 230,000 options were exercised on October 31,
2007 with the exercise price of $11,500 received and shares issued in November
2007.  Also, during the year, the Company canceled 1,549,792 options
(874,792 options due to employee terminations and 675,000 voluntary
cancellations from upper management).





During
the year ended October 31, 2008, no options were canceled or
granted.  740,000 shares of common stock were issued pursuant to
option exercises, including 1) 230,000 shares issued pursuant to prior year
option exercises, and; 2) 510,000 shares issued pursuant to options exercised
during 2008 which resulted in $25,500 to the company.  No other option
activity occurred.




16





Warrants





At
October 31, 2008 the Company had 965,997 warrants related to convertible
debentures outstanding entitling the holder thereof the right to purchase one
common share for each warrant held as follows:





Warrant
                                  Class
                                
                                Number of
                                  Warrants
                                
                                Exercise
                                  Price Per
                                  Warrant
                                
                                Expiration
                                  DateDebenture
                                
                                
                                735,370
                                
                                >or=to
      $0.30
                                
                                07/31/10Debenture
                                
                                
                                230,627
                                
                                >or=to
      $0.30
                                
                                08/17/10Total
                                
                                
                                965,997





ITEM 6
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
report contains certain financial information and statements regarding our
operations and financial prospects of a forward-looking nature. Although these
statements accurately reflect management's current understanding and beliefs, we
caution you that certain important factors may affect our actual results and
could cause such results to differ materially from any forward-looking
statements which may be deemed to be made in this prospectus. For this purpose,
any statements contained in this prospectus which are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the generality of the foregoing, words such as, "may", "intend", "expect",
"believe", "anticipate", "could", "estimate", "plan" or "continue" or the
negative variations of those words or comparable terminology are intended to
identify forward-looking statements. There can be no assurance of any kind that
such forward-looking information and statements will be reflective in any way of
our actual future operations and/or financial results, and any of such
information and statements should not be relied upon either in whole or in part
in connection with any decision to invest in the shares.





The
following discussion should be read in conjunction with our Consolidated
Financial Statements and the notes thereto and the other information included in
this Annual Report on Form 10-KSB.





Overview





We derive
the majority of our revenue from the installation of our Superclick Internet
Access Management System (SIMS) and from revenue generated from our call center.
Support fees are tied to the number of rooms serviced in a client’s property.
Due to our reliance on installations, variations in revenue levels may cause
fluctuations in quarterly results.    Factors such as a
client's commitment to providing internet access to their guests, general
economic and industry conditions and other issues could affect our revenue and
earnings.


17





In
addition to our North American operations, we have installations and contracts
in Europe and the Caribbean.  With the exception of Canadian
operations, the majority of transactions in other regions are denominated using
the United States dollar.   However, some of our transactions are
in Canadian dollars; therefore, we are exposed to currency fluctuation
risks.





We
continue to develop our product offering and IP management solutions, listening
carefully to our customers to determine development paths that most directly
meet their needs. Superclick emerged from the development stage during the
fiscal year ended October 31, 2005.





Here are
some of the significant milestones achieved during FY 2008:





·
            We
      entered into an agreement to service both high-speed internet access and
      video on demand to approximately 11,000 rooms North
    America;





·
            We
      received a purchase order from the InterContinental Hotels Group for the
      integration of the newly developed multi-homing application to 111
      properties throughout North America. The total value of the purchase order
      was approximately $400,000;





·
            We
      announced five additional installations for the prestigious Mandarin
      Oriental Hotel Group. These included installations in Tokyo, Singapore and
      three in Hong Kong;





·
            We
      added 32,000 rooms, bringing the total number of hotel rooms experiencing
      Superclick’s world-class IP infrastructure management and customer support
      to 115,000. We added 75 properties, bringing our total number of
      properties under management to 567.





Critical
Accounting Policies





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts of assets, liabilities, revenues and
expenses reported in the accompanying financial statements and related
footnotes.  We base our estimates and assumptions on historical
experience, observance of industry trends and various other sources of
information and factors.  Actual results may differ from these
estimates.  Critical accounting policies are defined as those that are
reflective of significant judgments and uncertainties, and potentially could
result in materially different results under different assumptions and
conditions.  In consultation with our Board of Directors, we have
identified six accounting principles that we believe are key to an understanding
of our financial statements.  These important accounting policies
require management's most difficult, subjective judgments.


18





Revenue
Recognition





Revenue
from the sale of Internet high speed connection equipment and installation is
recognized when the earning process is complete and the risk and rewards of
ownership have transferred to the customer, which is considered to have occurred
after the delivery and installation of the equipment to the
customer.





Maintenance
and support revenue is recognized ratably over the maintenance
term.  First-year maintenance typically is sold with the related
software license and renewed on an annual basis thereafter. Estimated fair
values of ongoing maintenance and support obligations are based on separate
sales of renewals to other customers or upon renewal rates quoted in the
contracts.  For such arrangements with multiple obligations, we
allocate revenue to each component of the arrangement based on the estimated
fair value of the undelivered elements.  Fair value of services, such
as consulting or training, is based upon separate sales of these
services.  At times, we may enter into multiple-customer contracts in
which we allocate revenue based on the number of specified users at each
customer, and recognizes revenue upon customer acceptance and satisfying the
other applicable conditions of the above described accounting
policy.





Accounts
receivable





Accounts
receivable are reported at the customers' outstanding balances less any
allowance for doubtful accounts.  Interest is not accrued on overdue
accounts receivable.  We evaluate receivables outstanding greater than
ninety days on a regular basis for potential reserve.





Inventories





Inventories
are valued at the lower of cost or market.  Cost is determined on a
first-in, first-out method or market.  Management performs periodic
assessments to determine the existence of obsolete, slow moving and non-salable
inventories, such as discontinued products, and records necessary provisions to
reduce such inventories to net realizable value.




19


Income
taxes





Provisions
for income taxes are based on taxes payable or refundable for the current period
and deferred taxes on temporary differences between the amount of taxable income
and pretax financial income and between the tax bases of assets and liabilities
and their reported amounts in the financial statements.  Deferred tax
assets and liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled as prescribed in
FASB Statement No. 109, Accounting for Income Taxes.  In
June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109”
(“FIN 48”).  FIN 48 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise’s financial statements in accordance with SFAS
No. 109, “Accounting for Income Taxes” (SFAS 109”).  FIN 48
prescribes a two-step process to determine the amount of tax benefit to be
recognized.  First, the tax position must be evaluated to determine
the likelihood that it will be sustained upon external
examination.  If the tax position is deemed “more-likely-than-not” to
be sustained, the tax position is then assessed to determine the amount of
benefit to recognize in the financial statements.  The amount of the
benefit that may be recognized is the largest amount that has a greater than
50 percent likelihood of being realized upon ultimate
settlement.  As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income
taxes.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.  The
Company underwent a change of control for income tax purposes on October 8, 2003
according to Section 381 of the Internal Revenue Code.  The Company's
utilization of U.S. Federal net operating losses will be limited in accordance
to Section 381 rules.  As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes.  Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.





Foreign
Currency Translation





The
financial statements of our Canadian subsidiary are measured using the Canadian
dollar as the functional currency.   Assets, liabilities and
equity accounts of the company are translated at exchange rates as of the
balance sheet date or historical acquisition date, depending on the nature of
the account.   Revenues and expenses are translated at average
rates of exchange in effect during the period.   The resulting
cumulative translation adjustments have been recorded as a separate component of
stockholders' equity.   The financial statements are presented in
United States of America dollars.





Results
of Operations





Twelve
Months Ended October 31, 2008 and 2007





Revenue





During
the year ended October 31, 2008, revenue increased $1,980,164 or 41.4% to
$6,762,867 compared to $4,782,703 for the year ended October 31,
2007.  The favorable sales variance was due to increases in both
installation and support activity.  During the year, revenue derived
from guest support services increased 29.9% compared to the previous year and
installation revenue, described as net sales on the Consolidated Statement of
Operations, improved 52.2% when compared to the previous year. Our solution
continues to receive strong validation from new clients as evidenced by the
increase in installation revenue as well as from our existing clients as we were
able to secure support contracts not only with our new customers but with
existing clients.




20


Gross
Profit





Gross profit for the year ended October
31, 2008 increased by $994,009 or 42.3% to $3,344,728 compared to $2,350,719 for
the year ended October 31, 2007.  Gross margin for the current year
was 49.5% compared to 49.2% the previous year.  The improvement in
gross profit outperformed the sales growth as revenue increased 41.4% but the
gross profit increased 42.3%. We successfully continue to deploy and service our
new and existing installations in a manner that is both effective and efficient
resulting in continued strength in margins. Deployments are mainly carried out
by our own team of engineers, minimizing the need for outsourced services which
has proven to be efficient.  Along with operating our own call centre,
we retain full control over the margins and have been successful in managing
them accordingly.





Selling,
General and Administrative





For the
years ended October 31, 2008 and 2007, selling, general and administrative
expenses (SG&A) were $1,258,848 and $1,388,927,
respectively.  This is the third consecutive year that SG&A has
been reduced without impeding growth.  SG&A has been reduced by
50.9% since the fiscal year ended October 31, 2005 while revenue has grown
181%.  Similar to the gross margins, we have a solid understanding of
the industry and manage the business requirements closely resulting in favorable
variances year over year.  SG&A for this fiscal year represented
18.6% of revenue compared to 29.0% last year.





Research
and Development





For the
years ended October 31, 2008 and 2007, research and development expense was
$183,408 and $164,614, respectively.  The $18,794 or 11.4%
year-over-year increase was mainly due to increased requirements to further
solidify our solutions..





Income
from operations





As Income
from operations for the year ended October 31, 2008 was $1,840,843 or 27.2% of
net revenue compared to $732,403 or 15.3% of net revenue for the year ended
October 31, 2007, a $1,108,440 or 151.3% improvement.  Due to
favorable variances in all areas of the business, the Company reported
significant operational income compared to the previous year.





Other
Income and Expense





Interest
income for the years ended October 31, 2008 and 2007 was $12,232 and $27,005,
respectively.





Interest
expense for the years ended October 31, 2008 and 2007 was $162,623 and $281,308,
respectively.  Interest expense represents interest incurred on the
debenture and on a note payable to one of the former shareholders of Hotel Net
LLC.  The decrease in interest expense is due to the lower debenture
principle as the Company has made considerable progress in paying down the
debt.


21





During
the years ended October 31, 2008 and 2007, the Company recognized a gain on the
forgiveness of debt of $8,846 and $357,078, respectively.  The current
year’s gain relates to the renegotiation of certain notes payable. The 2007 gain
includes $145,671 related to the renegotiation of certain notes payable and
$211,407 of accounts payable which were assessed as not due.





During
the years ended October 31, 2008 and 2007, we recognized a derivative gain of
$17,963 and loss of $17,771, respectively, related to the warrants which were
issued in connection with the convertible debentures.  As of October
31, 2008, the warrants had no value.





For the
above reasons, the total other income and expense for the year ended October 31,
2008 was an expense of $123,491 compared to income of $85,004 the previous
year.





Net
Income





The net
income before income taxes for the year ended October 31, 2008 was $1,717,352 or
25.4% of net revenue representing an improvement of $899,945 or 110.1% compared
to $817,407 or 17.1% of net revenue during the year ended October 31,
2007.  The Company recorded $157,175 in income taxes during the year
ended October 31, 2008 compared to nil in 2007.  Despite the increase
in income taxes, the Company achieved net income of $1,560,177 or 23.1% of net
revenue in 2008 representing an improvement of $742,770 or 90.9% compared to
$817,407 or 17.1% of net revenue during 2007.





Net
Income (Loss) Per Common Share





For the
years ended October 31, 2008, the net income per common share basic was $0.04
and $0.02 fully diluted, compared to $0.02 basic and $0.01 diluted for the year
ended October 31, 2007.  The basic and fully diluted weighted average
shares for the current fiscal year end was 43,795,492 and 74,879,672,
respectively.  The basic and fully diluted weighted average shares for
the year ended October 31, 2007 was 40,389,388 and 72,293,556,
respectively.





FINANCIAL
CONDITION





From
inception to October 31, 2008, we have incurred an accumulated deficit of
$5,863,820.  This loss has been incurred through a combination of
professional fees and expenses supporting our plans to acquire synergistic
businesses as well as continued operating losses.  However, in the
current year we have experienced notable organic growth resulting in a larger
customer base.  Net revenue has grown 41.4% producing a net profit
margin of 23.1%.





Since
inception, we have financed our operations primarily through debt and equity
financing.   During the year ended October 31, 2008 we had a net
decrease in cash of $8,071.  Total cash resources as of October 31,
2008 was $781,520 compared with $789,591 at October 31, 2007.


22




Our
available working capital and capital requirements will depend upon numerous
factors, including the deployment and sale of Internet access management
solutions, the timing and cost of expanding into new markets, the cost of
developing competitive technologies, changes in our existing collaborative and
licensing relationships, the resources that we devote to developing new products
and commercializing capabilities, the status of our competitors, our ability to
establish collaborative arrangements with other organizations, and our ability
to attract and retain key employees.





The
Company's Liquidity Plan





Recent
operating results have alleviated concerns about our ability to generate cash
flow from operations.  Net income for the year ended October 31, 2008
was $1,560,177 compared to $817,407 for the year ended October 31, 2007 and the
operations provided $771,728 of cash compared to $661,875 for the year ended
October 31, 2007.





During
the year ended October 31, 2008, the Company has financed operations solely with
cash generated through sales and the collection of its accounts
receivable.





The Hotel
Net LLC notes matured on January 1, 2007.  Four of the five notes were
canceled and replaced with new notes that do not accrue interest and mature
December 31, 2009.  The remaining note is anticipated to be
renegotiated in the near future.  The new balance for notes payable at
October 31, 2008 is $194,300 or $89,600 less than the 2007 balance of
$283,000.





During
the year ended October 31, 2008, we issued 1,996,585 shares of Common Stock in
exchange for $216,477 of debt principle and accrued interest of our convertible
debentures.





During
the year ended October 31, 2008, we issued 384,122 shares of Common Stock to our
directors in exchange for services performed, including 1) 141,656 which was
expensed in 2007 and payable at October 31, 2007 valued at $19,832, and; 2)
242,466 for 2008 services valued at $34,645.





Our
independent registered public accountants, Bedinger and Company, have indicated
that our financial statements have been prepared assuming our company will
continue as a going concern. As such, Bedinger and Company has noted that our
company has suffered past recurring losses from operations resulting in an
accumulated deficit and significant debt that raise doubt about our ability to
continue as a going concern.





Our need
to raise additional equity or debt financing and our ability to generate cash
flow from operations will depend on its future performance and our ability to
successfully implement business and growth strategies.  Our
performance will also be affected by prevailing economic
conditions.  Many of these factors are beyond our
control.  If future cash flows and capital resources are insufficient
to meet our commitments, we may be forced to reduce or delay activities and
capital expenditures or obtain additional equity capital.  In the
event that we are unable to do so, we may be left without sufficient
liquidity.


23


Off-Balance
Sheet Arrangements





At
October 31, 2008 we had no obligations that would qualify to be disclosed as
off-balance sheet arrangements.





Contractual
Obligations





Equipment loan
obligation:  Loan obligation relates to computer equipment used
in our Montreal office.  The loan term extends through September 28,
2009 at a rate of $1,230 per month.





At
October 31, 2008, our equipment loan obligation is as follows:





2009
                  
                  $
                  12,6262010
      and thereafter
                  
                  $
                  -$
                  12,626





Operating lease
obligations:  Operating lease obligations consist of office
rental commitment for our offices in Montréal, Québec,
Canada.   On October 1, 2004 we began a lease for office space in
Montréal.  The lease extends through September 30, 2009 at a rate of
$4,867 per month.





At
October 31, 2008, our contractual obligations under this lease were as
follows:





2009
                  
                  $
                  58,4042010
      and thereafter
                  
                  $
                  -$
                  58,404





Inflation





Although
our operations are influenced by general economic conditions, we do not believe
inflation had a material effect on the results of operations during the year
ended October 31, 2008.   However, there can be no assurance our
business will not be affected by inflation in the future.




ITEM
7.FINANCIAL STATEMENTS





The
information required by this Item is submitted as a separate section of this
Form 10-KSB. See CONSOLIDATED FINANCIAL STATEMENTS AND NOTES.


24





ITEM
8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
 ACCOUNTING
AND FINANCIAL DISCLOSURE.




There
were no reportable events of the type described in Item 304(a)(1)(iv) of
Regulation S-B.





ITEM
8A.CONTROLS AND PROCEDURES





(a)
            Evaluation
      of disclosure controls and
procedures





As
required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation,
under the supervision and participation of our management, including the
Company’s Chief Executive Officer and Chief Financial Officer (who is the
principal accounting officer).  Both evaluated the effectiveness of
the Company’s disclosure controls and procedures as of the end of the period
covered by this report and noted a control deficiency with respect to item (c)
below.





(b)
            Changes
      in internal controls




In
accordance with Item 308 (c) of Regulation S-B, there were no changes in the
Company’s internal control reporting in connection with the Company’s evaluation
of its internal controls that occurred during the most recent fiscal year
covered by this Form 10-KSB.





(c)
              Restatement





In
October 2007, we discovered the following items that resulted in our restatement
of our 10-KSB for the year ended October 31, 2006 and our quarterly filings for
the quarters ended January 31, 2007, April 30, 2007 and July 31,
2007:





1.
            We
      have reclassified the extraordinary loss-write-off of goodwill from
      acquisition in the Statement of Operations for the year ended October 31,
      2005 to Costs and Expenses pursuant to SFAS 142, paragraph
      43.  This affected the 10-KSB for the year ended October 31,
      2006 only.





2.
            In
      the Consolidated Statement of Comprehensive Income we have eliminated the
      derivative gain/(loss) since it is already reflected in the Statement of
      Operations and is not a comprehensive income item.  This
      affected all of our aforementioned
filings.





3.
            In
      the Consolidated Statement of Cash Flows we have reclassified $225,000 of
      penalty interest on convertible debenture from cash flows from financing
      activities to cash flows from operating activities since this is a noncash
      expense.  This affected the 10-KSB for the year ended October
      31, 2006 only.


25





4.
            We
      have revised our footnote related to our stock incentive plan to include
      all the information required by SFAS 123r, paragraphs 64 and
      84.  This affected all of our filings as stated
      above.





5.
            We
      adjusted the 2005 consolidated statement of shareholder’s equity
      additional paid-in-capital by $127,600 from $4,646,360 at October 31, 2005
      to $4,773,960 and increased the goodwill impairment loss by $127,600 in
      the consolidated statement of operations to reflect the repayment of Hotel
      Net LLC (fiscal year 2005 acquisition) shareholders.  This
      effected out 10-KSB for the year ended October 31, 2006
    only.





6.
            In
      the Consolidated Balance Sheet for October 31, 2007, we included a $73,700
      cumulative effect adjustment related to fiscal years 2005 ($41,068) and
      2004 ($32,632) for Canadian Provincial Research and Development Tax
      Credits by increasing the accumulated deficit and accounts
      payable.  Pursuant to SFAS 154 and SAB 108, we are not required
      to adjust our previously filed 10-KSB for this cumulative effect
      adjustment.  However, we have elected to do so given that we are
      amending the October 31, 2006 10-KSB for the other items noted
      above.  This affected all of our filings as stated
      above.





PART
III





ITEM
9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS


AND
ALL CONTROL PERSONS





In
Compliance With Section 16(a) Of The Exchange Act As of October 31, 2007, our
executive officers, directors and key employees, their positions and their ages
are as follows:





DIRECTORS
AND EXECUTIVE OFFICERS





Name
                          
                          Age
                          
                          PositionTodd
      M. Pitcher
                          
                          40
                          
                          Chairman
      of the BoardSandro
      Natale
                          
                          40
                          
                          CEO,
      President and DirectorJean
      Perrotti
                          
                          46
                          
                          CFO
      and Principal AccountingOfficerPaul
      Gulyas
                          
                          51
                          
                          DirectorGeorge
      Vesnaver
                          
                          51
                          
                          DirectorWendy
      Borow-Johnson
                          
                          51
                          
                          Director


26


EXECUTIVE
OFFICERS AND DIRECTORS





TODD M.
PITCHER has been Chairman of the Board of our company since completion of the
merger transaction with Superclick Networks, Inc. in October 2003.  In
addition, Mr. Pitcher served as Chief Financial Officer and Principal Accounting
Officer for the period of April 2005 through the year ended October 31,
2005.  Mr. Pitcher is currently Managing Partner of Aspire Clean Tech
Communications, an alternative energy advisory and corporate communications
firm. Mr. Pitcher has several years experience in the investment banking,
business consulting and equity research, serving as Director of Equity Research
at Equity Securities in Golden Valley, Minnesota, and several other regional
investment banking firms. Mr. Pitcher has B.A. in Philosophy from the University
of California at Berkeley and has attended graduate school at the University of
California at Santa Barbara and Claremont Graduate School.





SANDRO
NATALE was officially appointed President and CEO November 16,
2006.  Previously, he has been VP of Business Development of our
company since completion of the merger transaction with Superclick Networks,
Inc. in October 2003. Prior to the merger, Mr. Natale served as VP of Business
Development of Superclick Networks, Inc. Prior to Superclick, Mr. Natale founded
ITS Service Inter-Tek, a computer networking company that was later acquired by
GSI Technologies. Mr. Natale has 18 years experience in the technology and
system integration business. Prior to joining the Superclick Networks Team in
2001, Mr. Natale was President and of founder of I.T.S services a successful IT
services integrator which was later sold to GSI Technologies. Mr. Natale served
as V.P. of sales and marketing where he assumed increasing responsibilities in
various organizational units, including, revenue planning, regulation,
marketing, sales operations and information systems. Mr. Natale holds a computer
science degree from Dawson College.





JEAN
PERROTTI – CHIEF FINANCIAL OFFICER. Mr. Perrotti has been CFO and Principal
Accounting Officer for our Company since November 2005. Mr Perrotti was most
recently a senior consultant providing CFO assistance to a variety of industries
including SOX consulting services. Before managing a successful consulting
career, he held various senior financial roles including CFO of Normex Telecom
Inc / Cygnal Technologies Inc a leading Canadian provider of network
communication solutions. Prior to joining Cygnal, Mr. Perrotti held
Controllership positions with a food ingredient manufacturer and a fashion belt
manufacturer. Mr. Perrotti began his career as a financial auditor with a public
accounting firm situated in Montreal. Mr. Perrotti holds a Bachelor Degree of
Commerce from Concordia University, is a member of the Order of Certified
General Accountants of Canada, a member of the Association of Certified Design
Accountants, an accredited member of the Guild of Industrial, Commercial and
Institutional Accountants, a member of the European Accounting Association and
an affiliate member of the Association of International
Accountants.


27


GEORGE
VESNAVER – Mr. Vesnaver has been a Director of our company since August, 2004.
Mr. Vesnaver is currently Director of Hewlett Packard’s (HWP-NYSE) Software
Business Unit, and has been with HP for more than 20 years. His experience spans
a number of areas including consulting, sales and distribution of enterprise
software solutions to companies of all sizes. Mr. Vesnaver holds a bachelor’s
degree in electrical engineering from Concordia University and an MBA in
international business and finance from McGill University.





PAUL
GULYAS – Mr. Gulyas has more than 27 years of diverse industrial experience in
IT systems and products, military/government systems, air traffic and vessel
traffic management systems as well as border control and security solutions in
companies from the very small to the very large. He is currently responsible for
the OEM program within IBM Canada's mid-market business unit. Previously he was
President of IOTA Information Management and is a founding partner of the
consulting firm TACTexe Incorporated. Mr. Gulyas has a BSc in Physics from
McMaster University in Hamilton, Ontario.





WENDY
BOROW-JOHNSON – Ms. Borow-Johnson currently serves as President of Media for
Boomj.com Inc., a lifestyle and social network portal for Baby-Boomers and
Generation Jonesers.  Previously, she was President of Healthy Living
Channel and served as the Senior Vice President of The Networks Group of Turner
Media Group, Inc. She has won NY Film Festival Gold and Silver Medals, The
International Medical Film Festival’s Freddie Award, the PRSA’s Golden Anvil and
was awarded the Women in Communications Sky Award as well as being honored with
the American Medical Writers Alvarez Award.





16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


To our
knowledge, no officers, directors, beneficial owners of more than ten percent of
any class of our equity securities registered pursuant to section 12 of the
Exchange Act or any other person subject to Section 16 of the Exchange Act with
respect to us, failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during the most recent fiscal year, which ended
October 31, 2008.





ITEM
10.EXECUTIVE COMPENSATION





The
following table sets forth, for the last three fiscal years, the compensation
earned for services rendered in all capacities by our chief executive officer,
chief financial officer and the other highest-paid executive officers serving as
such at the end of 2008 whose compensation for that fiscal year was in excess of
$100,000. The individuals named in the table will be hereinafter referred to as
the "Named Officers." No other executive officer of Superclick, Inc. received
compensation in excess of $100,000 during fiscal year 2008.


28




SUMMARY COMPENSATION
      TABLELong
      Term CompensationAnnual Compensation
                                            
                                            
                                            Awards
                                            
                                            
                                            Payouts(a)
                                            
                                            (b)
                                            
                                            (c)
                                            
                                            
                                            (d)
                                            
                                            
                                            (e)
                                            
                                            
                                            (f)
                                            
                                            
                                            (g)
                                            
                                            
                                            (h)
                                            
                                            
                                            (i)Name and
                                              Principle
                                              Position
                                            
                                            Year
                                            
                                            Salary ($)
                                            
                                            
                                            Bonus ($)
                                            
                                            
                                            Other
                                              Annual
                                              Compensation
                                              ($)
                                            
                                            
                                            Restricted
                                              Stock
                                              Award(s) ($)
                                            
                                            
                                            Securities
                                              Underlying
                                              Options/SARs
                                              (#)
                                            
                                            
                                            LTIP
                                              Payouts
                                              ($)
                                            
                                            
                                            All Other
                                              Compensation
                                              ($)Sandro
                                            
                                            2008
                                            
                                            $
                                            178,786
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —Natale,
      CEO
                                            
                                            2007
                                            
                                            $
                                            150,259
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (900,000
                                            )
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —2006
                                            
                                            $
                                            143,787
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            4,500,000
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —Jean
                                            
                                            2008
                                            
                                            $
                                            117,692
                                            
                                            
                                            $
                                            29,198
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —Perrotti,
      CFO
                                            
                                            2007
                                            
                                            $
                                            109,008
                                            
                                            
                                            $
                                            27,252
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (600,000
                                            )
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —2006
                                            
                                            $
                                            103,365
                                            
                                            
                                            $
                                            32,065
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            3,000,000
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —





OPTIONS
AND STOCK APPRECIATION RIGHTS





During
the year ended October 31, 2008 no options or stock appreciation rights were
granted.





The
Company has recorded option compensation expense of $767,017 from inception
through October 31, 2008.





LONG
TERM INCENTIVE PLAN AWARDS





No
long-term incentive plan awards were made to any of our executive officers
during the last fiscal year.





COMPENSATION
OF DIRECTORS





2004 Superclick, Inc.
Non-Employee Director's Stock Incentive Plan





On
December 31, 2003, the Board of Directors of the Company adopted the 2004
Superclick, Inc. Non-Employee Director's Stock Incentive Plan (the "Stock
Incentive Plan").  The Stock Incentive Plan provides for the issuance
of Options, Restricted Stock, and/or Deferred Stock to an
Awardee.  The total number of shares of Common Stock which may be
awarded under the Plan is 1,500,000.  If any awarded shares are
forfeited, they become available for future issuance. An annual aggregate limit
of 300,000 shares (including Options, Restricted Stock, and Deferred Stock) is
set for any individual Director.


29


The Stock
Incentive Plan has a duration of ten years commencing on January 1,
2004.  Awardees are defined as director to whom an award is
made.  An eligible director is any person who on the date of grant is
a member of the Board of Directors of the Company and is not an employee of the
Company or of any Subsidiary.  Stock Options are non-qualified
right-to-buy Options for the purchase of Common Stock of the
Company.  The term of each Option shall be ten years from the Date of
Grant.  The Option Price shall be the Fair Market Value of Superclick,
Inc. Common Stock on the date the Option is granted.  Under no
circumstances shall any Option vest in less than one year from the date of
grant.  Shares purchased upon exercise of an Option must be paid for
in full at the time of exercise either in cash or with currently owned
shares.  Neither the Committee on Directors and Governance nor the
Board of Directors may re-price any Option that is less than the option exercise
price.  Restricted Stock is Common Stock of the Company restricted as
to sale in such fashion as the Committee on Directors and Governance shall
determine.  Prior to the lifting of the restrictions, the Awardee will
be entitled to receive dividends from and to vote the shares of Restricted
Stock.





During
the year ended October 31, 2007, the Company issued 380,122 shares to directors
for services rendered valued at $39,472 and accrued an additional $19,832 which
141,656 shares of common stock were issued in November
2008.   Value for shares issued for services is based on fair
market value of our stock on the date of issuance.





During
the year ended October 31, 2008, the Company issued 384,122 shares to directors
for services rendered valued at $54,477 and accrued an additional
$18,000.  Value for shares issued for services is based on fair market
value of our stock on the date of issuance.  The following table shows
director compensation earned during the year ended October 31,
2008:





Name
                    
                    Fees
                      earned or
                      paid in
                      cash
                    
                    
                    Stock
                      awards
                    
                    
                    Option
                      awards
                    
                    
                    Non-equity
                      incentive plan
                      compensation
                    
                    
                    Nonqualified
                      deferred
                      compensation
                      earnings
                    
                    
                    All other
                      compensation
                    
                    
                    TotalPaul
      Gulyas
                    
                    
                    -
                    
                    
                    $
                    14,502
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    14,502George
      Vesnaver
                    
                    
                    -
                    
                    
                    $
                    14,502
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    14,502Todd
      Pitcher
                    
                    
                    -
                    
                    
                    $
                    15,036
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    69,990
                    
                    
                    $
                    85,026Wendy
      Borow-Johnson
                    
                    
                    -
                    
                    
                    $
                    10,437
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    10,437Total
                    
                    
                    -
                    
                    
                    $
                    54,477
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    124,467





From
inception through October 31, 2008, the Company has issued 2,494,772 shares to
our directors under this stock incentive plan.





The 2004 Incentive Stock
Option Plan





On April
8, 2004, the Board of Directors of the Company adopted the 2004 Incentive Stock
Option Plan.  This Plan is a plan for key Employees (including
officers and employee directors) and Consultants of the Company and its
Affiliates and is intended to advance the best interests of the Company, its
Affiliates, and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the Company and its Affiliates
with additional incentives and an opportunity to obtain or increase their
proprietary interest in the Company, thereby encouraging them to continue in the
employ of the Company or any of its Affiliates.


30


The
Company may issue each of the following under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award The Plan was effective April 9, 2004 (the "Effective
Date"), provided that within one year of the Effective Date, the Plan shall have
been approved by at least a majority vote of stockholders.  No
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten
years after the Effective Date.





Options
Exercised In Last Fiscal Year And Fiscal Year-End Option Values





During
the year ended October 31, 2007, (1) 490,000 options were exercised resulting in
$24,500 to the company and the issuance of 490,000 shares of common stock; (2)
230,000 options were exercised on October 31, 2007 resulting in $11,500
receivable and shares issued post fiscal year end.; (3) the Company canceled
1,549,792 options (874,792 options due to employee terminations and 675,000
voluntary cancellations from upper management), and (4) Upper management
transferred 1,575,000 options already issued in their names to the holder of our
convertible debentures resulting in the reduction of $100,000 of principle of
our convertible debentures.





During
the year ended October 31, 2008 510,000 options were exercised resulting in
$25,500 to the company and the issuance of 510,000 shares of common
stock.





As of
October 31, 2008, the Company had 13,952,356 outstanding options all of which
were exercisable.  The value to the company of the exercisable options
based on their actual strike prices is $1,045,553.





Executives'
Compensation Policies





Compensation
of our executives is intended to attract, retain and award persons who are
essential to the corporate enterprise.  The fundamental policy of our
executive compensation program is to offer competitive compensation to
executives that appropriately reward the individual executive's contribution to
corporate performance.  The board of directors utilizes subjective
criteria for evaluation of individual performance and relies substantially on
our executives in doing so.  The Board focuses on two primary
components of our executive compensation program, each of which is intended to
reflect individual and corporate performance: base salary and long-term
incentive compensation.





Executives'
base salaries are determined primarily by reference to compensation packages for
similarly situated executives of companies of similar size or in comparable
lines of business with whom we expect to compete for executive talent and with
reference to revenues, gross profits and other financial
criteria.  The Board also assesses subjective qualitative factors to
discern a particular executive's relative value to the corporate enterprise in
establishing base salaries.


31


It is the
Board's philosophy that significant stock ownership by management creates a
powerful incentive for executives to build long-term shareholder
value.  Accordingly, the board believes that an integral component of
executive compensation is the award of equity-based compensation, which is
intended to align executives' long-term interests with those of our
shareholders.  The board believes that option grants should be
considered on an annual basis.





Employment
Agreements with Executive Officers





Superclick,
Inc. has executed employment agreements with its top two executive
officers.  Below is a summary of the major terms of these employment
agreements.





EMPLOYMENT
AGREEMENTS





SANDRO
NATALE - Mr. Natale's employment with us is governed by an employment agreement
entered into between he and Superclick, Inc. The agreement provides for term of
employment that may be extended for additional one (1) year
periods.  Mr. Natale was entitled to receive a base salary equal to
CDN $120,000 plus 2%
commission over-ride on new sales.





JEAN
PERROTTI Mr. Perrotti's employment with us is governed by an employment
agreement entered into between he and Superclick, Inc. The agreement provides
for term of employment that may be extended for additional one (1) year
periods.  Mr. Perrotti was entitled to receive a base salary equal to
CDN $120,000 and bonus based on certain thresholds being met.





ITEM
11. Security Ownership Of Certain Beneficial Owners And Management





The
following table sets forth certain information regarding beneficial ownership of
our common stock as of October 31, 2008, by (i) each person known by us to be
the beneficial ownership of more than 5 percent of the outstanding common stock,
(ii) each director, (iii) each executive officer, and (iv) all executive
officers and directors as a group.  The number of shares beneficially
owned is determined under the rules promulgated by the SEC, and the information
is not necessarily indicative of beneficial ownership for any other
purpose.  Under those rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or investment power
and also any shares which the individual has the right to acquire within 60 days
of the date hereof, through the exercise or conversion of any stock option,
convertible security, warrant or other right.  Including those shares
in the tables does not, however, constitute an admission that the named
stockholder is a direct or indirect beneficial owner of those
shares.  Unless otherwise indicated, each person or entity named in
the table has sole voting power and investment power (or shares that power with
that person's spouse) with respect to all shares of capital stock listed as
owned by that person or entity.  Unless otherwise indicated, the
address of each of the following persons is 10222 St-Michel Blvd., Suite 300 Montreal,
Quebec, H1H 5H1.


32





Name
                          
                          Shares Beneficially Owned
                          
                          
                          Percent of ClassSandro
      Natale (Canada)
                          
                          
                          6,589,430
                          
                          
                          
                          9.31
                          %Jean
      Perrotti (Canada)
                          
                          
                          2,400,000
                          
                          
                          
                          3.39
                          %Todd
      M. Pitcher
                          
                          
                          928,359
                          
                          
                          
                          1.31
                          %George
      Vesnaver (Canada)
                          
                          
                          549,882
                          
                          
                          
                          *Paul
      Gulyas (Canada)
                          
                          
                          526,782
                          
                          
                          
                          *Wendy
      Borow-Johnson
                          
                          
                          73,875
                          
                          
                          
                          *All
      Officers andDirectors
      as a Group
                          
                          
                          11,068,328
                          
                          
                          
                          15.63
                          %(*)
      means less than 1.0%





ITEM
12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





Mr.
Pitcher, Chairman of our company, provides consulting services to us in exchange
for monthly compensation of $5,000 plus related expenses.  Mr. Pitcher
is also President of Comprehensive Communications LLC who provides us with
business services support.





ITEM
13.EXHIBITS LISTS AND REPORTS ON FORM 8-K.





The
following exhibits filed as part of this Form 10-KSB include both exhibits
submitted with this Report and those incorporated by reference to other
filings:





3.1
Articles of Incorporation of DDR Systems, Inc. (Incorporated by reference filed
with the Company's Form S-1 on February 28, 2000).





3.2
By-laws of DDR Systems, Inc. (Incorporated by reference filed with the Company's
Form S-1 on February 28, 2000).





3.3
Certificate of Amendment to the Articles of Incorporation of DDR Systems, Inc.,
as filed with the Secretary of State of the State of Washington on March 16,
2001. (Incorporated by reference filed with the Company's Form 8-K on April 5,
2001).





3.4
Certificate of Amendment to the Articles of Incorporation of Grand Prix Sports,
Inc., as filed with the Secretary of the State of Washington on September 12,
2003. (Incorporated by reference filed with the Company's Form 8-K on October
10, 2003.


33


3.5
Certificate of Amendment to the Articles of Incorporation of Superclick, Inc.,
as filed with the Secretary of the State of Washington on October 30,
2006.





10.1 2004
Incentive Stock Option Plan dated April 8, 2004 (Incorporated by reference filed
with the Company's Form 8-K on May 7, 2002 as Exhibit 4.1)





10.2
Completion of acquisition of Hotel Net (Incorporated by reference filed with the
Company’s Form 8-K/A on October 21, 2005).





10.3
Amendment to 2004 Stock Incentive Plan dated October 30, 2006 (Incorporated by
reference filed with the Company’s Form 8-K on November 13, 2006).





10.4
Retirement of employee stock options (Incorporated by reference filed with the
Company's Form 8-K on November 7, 2007).





13.1
Annual report to shareholders for the fiscal year ended October 31, 2007
(Incorporated by reference filed as form 10KSB on January 28,
2008).





13.2
Quarterly report to shareholders for quarter ended January 31, 2008
(Incorporated by reference filed as form 10QSB on March 5, 2007).





13.3
Quarterly report to shareholders for quarter ended April 30, 2008 (Incorporated
by reference filed as Form 10QSB on June 16, 2008).





13.3
Quarterly report to shareholders for quarter ended July 31, 2008 (Incorporated
by reference filed as Form 10QSB on September 15, 2008).





20.2
Annual letter to shareholders (Incorporated by reference filed with the
Company’s Form 8-K on April 9, 2008).





20.3
Annual Shareholder Meeting presentation (Incorporated by reference filed with
the Company’s Form 8-K on April 28, 2008).





20.4
Quarterly financial update via conference call (Incorporated by reference filed
with the Company’s Form 8-K on March 18, 2008).





20.5
Quarterly financial update via conference call (Incorporated by reference filed
with the Company’s Form 8-K on June 30, 2008).





23.1
Consent of Independent Public Accountant, dated January 7, 2009.





31.1
Certification of Chief Executive Officer of Period Rerport pursuant to Rule 13a
-14a and Rule 15d-14(a).


34


31.2
Certification of Principal Financial Offier of Periodic Report pursuant to Rule
13a-14a and Rule 15d-14(a).





32.1
Certification pursuant to 18 U.S.C. Section 1350.





32.2
Certification pursuant to 18 U.S.C. Section 1350.





ITEM
14 PRINCIPAL ACCOUNTANT FEES AND SERVICES.





(1) Audit
Fees





The
aggregate fees billed for professional services rendered by Bedinger &
Company for the audit of the Registrant's annual financial statements and review
of the financial statements included in the Registrant's Forms 10-QSB or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for fiscal year 2008 were
$61,924.  Additionally, Bedinger & Company has charged $5,000 for
tax preparation services for fiscal year 2008.





(2) Audit
Committee Policies and Procedures





The
Registrant does not have an audit committee. The Board of Directors of the
Registrant approved all of the services rendered to the Registrant by Bedinger
& Company for fiscal years 2008.





(3) Audit
Work Attributed to Persons Other than Bedinger & Company’s Full-time,
Permanent Employees.





Not
applicable.





SIGNATURES





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





Date:  January
      15, 2009
                    Superclick,
      Inc.By:
                    /s/ Sandro NataleSandro
      NataleChief
      Executive Officer




35


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





SIGNATURE
TITLE DATE





/s/
      Sandro Natale
                    
                    Chief
      Executive OfficerJanuary
      15, 2009Sandro
      Natale/s/
      Jean Perrotti
                    
                    Chief
      Financial Officer and Principle Accounting OfficerJanuary
      15, 2009Jean
      Perrotti





BOARD
      OF DIRECTORS/s/ Todd M. Pitcher
                            
                            Chairman
      and Secretary
                            January
      15, 2009Todd
      M. Pitcher/s/ Sandro Natale
                            
                            Director
                            January
      15, 2009Sandro
      Natale/s/ Paul Gulyas
                            
                            Director
                            January
      15, 2009Paul
      Gulyas/s/ Wendy Borow-Johnson
                            
                            Director
                            January
      15, 2009Wendy
      Borow-Johnson/s/ George Vesnaver
                            
                            Director
                            January
      15, 2009George
      Vesnaver




36


SUPERCLICK,
INC.





REPORT ON AUDIT OF
CONSOLIDATED FINANCIAL STATEMENTS





YEARS ENDED OCTOBER 31, 2008
AND 2007





CONTENTS





PAGEReport
      of Independent Registered Public Accounting Firm
                
                
                F-1FINANCIAL
      STATEMENTSConsolidated
      Balance Sheets
                
                
                F-2Consolidated
      Statements of Operations
                
                
                F-3Consolidated
      Statement of Stockholders’ Equity
                
                
                F-4Consolidated
      Statements of Comprehensive Income (Loss)
                
                
                F-5Consolidated
      Statements of Cash Flows
                
                
                F-6Notes
      to the Financial Statements
                
                
                F-7-29


37





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





Board of
Directors


Superclick,
Inc.





We have
audited the accompanying consolidated balance sheet of Superclick, Inc. (the
“Company”), as of October 31, 2008 and 2007 and the related consolidated
statements of operations, stockholders’ equity (deficit), comprehensive income
(loss), and cash flows for the years ended October 31, 2008 and October 31,
2007.  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 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 the 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, based on our audits, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Superclick, Inc. as of October 31, 2008 and 2007 and the related consolidated
statements of operations, stockholders’ equity (deficit), comprehensive income
(loss), and cash flows for the years ended October 31, 2008 and October 31,
2007, in conformity with accounting principles generally accepted in the United
States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  However, the Company has an
accumulated capital deficit and significant debt that raise substantial doubt
about its ability to continue as a going concern. Management plans in regards to
these matters are also described in Note O.  The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.





/s/
      Bedinger & CompanyCertified
      Public AccountantsConcord,
      CaliforniaJanuary
      7, 2009


F-1


SUPERCLICK,
INC.
 Consolidated
Balance Sheets
 As of
October 31, 2008 and 2007
 
 2008
                                      
                                      
                                      2007ASSETSCURRENT
      ASSETSCash
                                      
                                      $
                                      781,520
                                      
                                      
                                      $
                                      789,591Accounts
      receivable, net (Notes A&B)
                                      
                                      
                                      2,142,205
                                      
                                      
                                      
                                      834,813Tax
      refund receivable (Note N)
                                      
                                      
                                      48,269
                                      
                                      
                                      
                                      44,060Deferred
      tax asset (Note N)
                                      
                                      
                                      78,556
                                      
                                      
                                      
                                      -Inventory
      (Note C)
                                      
                                      
                                      330,298
                                      
                                      
                                      
                                      177,642Prepaid
      expenses
                                      
                                      
                                      20,139
                                      
                                      
                                      
                                      24,545TOTAL
      CURRENT ASSETS
                                      
                                      
                                      3,400,987
                                      
                                      
                                      
                                      1,870,651Fixed
      assets, net (Note D)
                                      
                                      
                                      153,397
                                      
                                      
                                      
                                      248,285Deferred
      tax asset (Note N)
                                      
                                      
                                      -
                                      
                                      
                                      
                                      73,692TOTAL
      ASSETS
                                      
                                      $
                                      3,554,384
                                      
                                      
                                      $
                                      2,192,628LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses (Note E)
                                      
                                      $
                                      764,646
                                      
                                      
                                      $
                                      553,808Income
      taxes payable (Note F)
                                      
                                      
                                      84,220
                                      
                                      
                                      
                                      -Deferred
      revenue (Note G)
                                      
                                      
                                      1,643,665
                                      
                                      
                                      
                                      1,450,934Loans
      current portion
                                      
                                      
                                      12,626
                                      
                                      
                                      
                                      15,440Notes
      payable (Note H)
                                      
                                      
                                      193,400
                                      
                                      
                                      
                                      283,000Convertible
      debentures, net (Note I)
                                      
                                      
                                      841,558
                                      
                                      
                                      
                                      1,521,647Debenture
      warrants (Note I)
                                      
                                      
                                      -
                                      
                                      
                                      
                                      17,963TOTAL
      CURRENT LIABILITIES
                                      
                                      
                                      3,540,115
                                      
                                      
                                      
                                      3,842,792Loans
      noncurrent portion
                                      
                                      
                                      -
                                      
                                      
                                      
                                      20,780TOTAL
      LIABILITIES
                                      
                                      
                                      3,540,115
                                      
                                      
                                      
                                      3,863,572Commitments
      (Note J)
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -STOCKHOLDERS'
      EQUITY (DEFICIT) (Note K)Common
      stock, par value $.0006, 175,000,000 shares authorized; issued and
      outstanding 44,937,251 and 41,816,544 at October 31, 2008 and 2007,
      respectively.
                                      
                                      
                                      27,504
                                      
                                      
                                      
                                      25,631Common
      stock payable
                                      
                                      
                                      18,000
                                      
                                      
                                      
                                      31,332Subscriptions
      receivable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (11,500
                                      )Additional
      paid-in capital
                                      
                                      
                                      6,060,714
                                      
                                      
                                      
                                      5,754,632Accumulated
      deficit
                                      
                                      
                                      (5,863,820
                                      )
                                      
                                      
                                      (7,423,997
                                      )Accumulated
      other comprehensive gain (loss)(Cumulative
      translation adjustment)
                                      
                                      
                                      (212,989
                                      )
                                      
                                      
                                      (31,902
                                      )Treasury
      Stock
                                      
                                      
                                      (15,140
                                      )
                                      
                                      
                                      (15,140
                                      )TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)
                                      
                                      
                                      14,269
                                      
                                      
                                      
                                      (1,670,944
                                      )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                      
                                      $
                                      3,554,384
                                      
                                      
                                      $
                                      2,192,628
 
 SEE
NOTES TO FINANCIAL STATEMENTS
  F-2
  SUPERCLICK,
INC.
 Consolidated
Statements of Operations
 For the
Years Ended October 31, 2008 and 2007
 
 Year EndedOctober 31,2008
                            
                            
                            2007RevenueNet
      Sales
                            
                            $
                            3,756,874
                            
                            
                            $
                            2,468,218Services
                            
                            
                            3,005,993
                            
                            
                            
                            2,314,485Net
      revenue
                            
                            
                            6,762,867
                            
                            
                            
                            4,782,703Cost
      of goods sold
                            
                            
                            3,418,139
                            
                            
                            
                            2,431,984Gross
      profit
                            
                            
                            3,344,728
                            
                            
                            
                            2,350,719Costs and ExpensesSelling,
      general & administrative
                            
                            
                            1,258,848
                            
                            
                            
                            1,388,927Research
      & development
                            
                            
                            183,408
                            
                            
                            
                            164,614Depreciation
                            
                            
                            61,629
                            
                            
                            
                            64,775Total
      costs and expenses
                            
                            
                            1,503,885
                            
                            
                            
                            1,618,316Income
      from operations
                            
                            
                            1,840,843
                            
                            
                            
                            732,403Other Income and (Expense)Interest
      income
                            
                            
                            12,323
                            
                            
                            
                            27,005Interest
      expense
                            
                            
                            (162,623
                            )
                            
                            
                            (281,308
                            )Gain
      on forgiveness of debt
                            
                            
                            8,846
                            
                            
                            
                            357,078Derivative
      gain (loss)
                            
                            
                            17,963
                            
                            
                            
                            (17,771
                            )Total
      other income and (expense)
                            
                            
                            (123,491
                            )
                            
                            
                            85,004Net
      income before income taxes
                            
                            
                            1,717,352
                            
                            
                            
                            817,407Income
      taxes
                            
                            
                            (157,175
                            )
                            
                            
                            -Net
      income
                            
                            $
                            1,560,177
                            
                            
                            $
                            817,407Net
      income per common share:Basic
                            
                            $
                            0.04
                            
                            
                            $
                            0.02Diluted
                            
                            $
                            0.02
                            
                            
                            $
                            0.01Weighted
      average common shares outstanding:Basic
                            
                            
                            43,795,492
                            
                            
                            
                            40,389,388Diluted
                            
                            
                            74,879,672
                            
                            
                            
                            72,293,556
 
 SEE
NOTES TO FINANCIAL STATEMENTS
  F-3
  SUPERCLICK,
INC.
 Consolidated
Statement of Stockholder's Equity
 For the
Years Ended October 31, 2007 and 2008
 
 Common Stock
                      
                      
                      Additional
                      
                      
                      Deficit
                        Accumulated
                        During the
                      
                      
                      Accumulated
                        Other
                      
                      
                      
                      
                      
                      TotalNumber of
                        Shares
                      
                      
                      Amount
                      
                      
                      Payable
                      
                      
                      Paid-inCapital
                      
                      
                      Developmental
                        Stage
                      
                      
                      Comprehensive
                        Income (loss)
                      
                      
                      Treasury
                        Stock
                      
                      
                      Stockholders'
                        EquityBALANCES
      October 31, 2006
                      
                      
                      35,612,756
                      
                      
                      $
                      21,315
                      
                      
                      $
                      -
                      
                      
                      $
                      5,442,229
                      
                      
                      $
                      (8,241,404
                      )
                      
                      $
                      88,183
                      
                      
                      $
                      (15,140
                      )
                      
                      $
                      (2,704,817
                      )Shares
      issued during the period:Shares
      issued for services
                      
                      
                      867,429
                      
                      
                      
                      520
                      
                      
                      
                      19,832
                      
                      
                      
                      89,186
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      109,538Shares
      issued for interest payable
                      
                      
                      2,094,503
                      
                      
                      
                      1,257
                      
                      
                      
                      
                      
                      
                      
                      86,255
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      87,512Shares
      issued for retirement of convertible debentures
                      
                      
                      2,751,856
                      
                      
                      
                      1,651
                      
                      
                      
                      
                      
                      
                      
                      113,349
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      115,000Stock
      options exercised
                      
                      
                      490,000
                      
                      
                      
                      888
                      
                      
                      
                      11,500
                      
                      
                      
                      23,612
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      36,000Stock
      subscriptions receivable
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      -Foreign
      Currency Translation Adjustment
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (120,085
                      )
                      
                      
                      
                      
                      
                      
                      (120,085
                      )Net
      <loss> profit
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      817,407
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      817,407BALANCES
      October 31, 2007
                      
                      
                      41,816,544
                      
                      
                      $
                      25,631
                      
                      
                      $
                      31,332
                      
                      
                      $
                      5,754,632
                      
                      
                      $
                      (7,423,997
                      )
                      
                      $
                      (31,902
                      )
                      
                      $
                      (15,140
                      )
                      
                      $
                      (1,659,444
                      )Shares
      issued during the period:Shares
      issued for services
                      
                      
                      384,122
                      
                      
                      
                      230.00
                      
                      
                      
                      (1,832
                      )
                      
                      
                      54,247
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      52,645Shares
      issued for interest payable
                      
                      
                      150,403
                      
                      
                      
                      90.00
                      
                      
                      
                      
                      
                      
                      
                      16,252
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      16,342Shares
      issued for retirement of convertible debentures
                      
                      
                      1,846,182
                      
                      
                      
                      1,108.00
                      
                      
                      
                      
                      
                      
                      
                      199,027
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      200,135Stock
      options exercised
                      
                      
                      740,000
                      
                      
                      
                      445.00
                      
                      
                      
                      (11,500
                      )
                      
                      
                      36,556
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      25,501Stock
      subscriptions receivable
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      -Foreign
      Currency Translation Adjustment
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (181,087
                      )
                      
                      
                      
                      
                      
                      
                      (181,087
                      )Net
      <loss> profit
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,560,177
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,560,177BALANCES
      October 31, 2008
                      
                      
                      44,937,251
                      
                      
                      $
                      27,504
                      
                      
                      $
                      18,000
                      
                      
                      $
                      6,060,714
                      
                      
                      $
                      (5,863,820
                      )
                      
                      $
                      (212,989
                      )
                      
                      $
                      (15,140
                      )
                      
                      $
                      14,269
  SEE
NOTES TO FINANCIAL STATEMENTS
  F-4
  SUPERCLICK,
INC.
 Consolidated
Statements of Comprehensive Income
 For the
Years Ended October 31, 2008 and 2007
 
 Year EndedOctober 31,2008
                            
                            
                            2007Net
      earnings
                            
                            $
                            1,560,177
                            
                            
                            $
                            817,407Other
      comprehensive incomeForeign
      currency translation adjustment
                            
                            
                            (181,087
                            )
                            
                            
                            (120,085
                            )Net
      comprehensive income
                            
                            $
                            1,379,090
                            
                            
                            $
                            697,322
 
 SEE
NOTES TO FINANCIAL STATEMENTS
  F-5
 
 SUPERCLICK,
INC.
 Consolidated
Statements of Cash Flows (Unaudited)
 For the
Years Ended October 31, 2008 and 2007
 
 Year Ended October 31,2008
                  
                  
                  2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                  
                  $
                  1,560,177
                  
                  
                  $
                  817,407Adjustments
      to reconcile net income to net cash provided (used) by operating
      activities:Depreciation
                  
                  
                  61,629
                  
                  
                  
                  64,775Stock
      issued for services
                  
                  
                  52,645
                  
                  
                  
                  109,538Derivative
      gain on warrants issued with debentures
                  
                  
                  (17,963
                  )
                  
                  
                  17,771Stock
      issued for accrued interest
                  
                  
                  16,342
                  
                  
                  
                  87,512Gain
      on forgiveness of debt
                  
                  
                  -
                  
                  
                  
                  (357,078
                  )Deferred
      taxes
                  
                  
                  (21,368
                  )
                  
                  
                  (68,673
                  )CHANGES
      IN ASSETS AND LIABILITIES:Accounts
      receivable
                  
                  
                  (1,689,390
                  )
                  
                  
                  (203,312
                  )Other
      receivables
                  
                  
                  31,164
                  
                  
                  
                  21,401Prepaid
      expenses
                  
                  
                  (1,954
                  )
                  
                  
                  (2,182
                  )Inventory
                  
                  
                  (211,529
                  )
                  
                  
                  (54,630
                  )Accounts
      payable and accrued expenses
                  
                  
                  281,654
                  
                  
                  
                  (247,659
                  )Accrued
      payroll
                  
                  
                  84,103
                  
                  
                  
                  31,556Income
      taxes payable and receivable
                  
                  
                  76,045
                  
                  
                  
                  -Deferred
      revenue
                  
                  
                  550,173
                  
                  
                  
                  445,449CASH
      PROVIDED BY OPERATING ACTIVITIES
                  
                  
                  771,728
                  
                  
                  
                  661,875CASH
      FLOWS FROM INVESTING ACTIVITIES:Acquisition
      of furniture and equipment
                  
                  
                  (14,042
                  )
                  
                  
                  (23,906
                  )CASH
      (USED) FOR INVESTING ACTIVITIES
                  
                  
                  (14,042
                  )
                  
                  
                  (23,906
                  )CASH
      FLOWS FROM FINANCING ACTIVITIES:Repayment
      of loans
                  
                  
                  (107,583
                  )
                  
                  
                  (50,559
                  )Repayment
      of convertible debenture
                  
                  
                  (479,953
                  )
                  
                  
                  (688,352
                  )Stock
      options exercised
                  
                  
                  37,000
                  
                  
                  
                  24,500CASH
      (USED) FOR FINANCING ACTIVITIES
                  
                  
                  (550,536
                  )
                  
                  
                  (714,411
                  )EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
                  
                  
                  (215,221
                  )
                  
                  
                  (53,887
                  )NET
      INCREASE (DECREASE) IN CASH
                  
                  
                  (8,071
                  )
                  
                  
                  (130,329
                  )CASH,
      beginning of period
                  
                  
                  789,591
                  
                  
                  
                  919,920CASH,
      end of period
                  
                  $
                  781,520
                  
                  
                  $
                  789,591Interest
      paid
                  
                  $
                  123,498
                  
                  
                  $
                  131,513Taxes
      paid
                  
                  $
                  2,888
                  
                  
                  $
                  -Other
      non-cash investing and financing activities:Shares
      issued for services
                  
                  $
                  52,645
                  
                  
                  $
                  109,538Shares
      issued for accrued interest
                  
                  $
                  16,342
                  
                  
                  $
                  87,512Shares
      issued for debt principle
                  
                  $
                  200,135
                  
                  
                  $
                  115,000
 
 SEE
NOTES TO FINANCIAL STATEMENTS
  F-6
  SUPERCLICK,
INC.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
ENDED OCTOBER 31, 2008 AND 2007
 
 NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Organization
 
 In
October, 2003, Superclick, Inc. (formerly Grand Prix Sports, Inc.) completed an
acquisition of Superclick Networks, Inc.  The acquisition was
accounted for as a recapitalization effected by a reverse merger, wherein
Superclick Networks, Inc. is considered the acquirer for accounting and
financial reporting purposes (collectively, Superclick Inc. and Superclick
Networks Inc. are referred to hereinafter as the “Company”).  The
pre-merger assets and liabilities of the acquired entity have been brought
forward at their book value and no goodwill has been recognized.  The
accumulated deficit of Superclick Networks, Inc. has been brought forward, and
common stock and additional paid-in-capital of the combined company have been
retroactively restated to give effect to the exchange rates as set forth in the
merger agreement.
 
 Superclick
Networks, Inc. was organized on August 24, 2000, in Montreal, Quebec,
Canada.  For purposes of the financial reporting of our reverse merger
acquisition, the date of inception is considered to be August 24,
2000.
 
 The
Company is in the business of providing and installing broadband high speed
Internet connection equipment and IP (“Internet Protocol”) infrastructure
management systems with 24x7x365 help desk support to hotels, multi dwelling
units (“MDU’s”) and universities on a worldwide basis. Superclick, Inc.
commercialized its initial Internet access management products in
2002.
 
 On
October 6, 2003 Superclick, Inc. amended its articles of incorporation by
changing the name of the Company from Grand Prix Sports, Inc. to Superclick,
Inc. to more accurately reflect the nature of its business after the
recapitalization effected by the reverse merger.
 
 Pursuant
to a share purchase agreement dated October 7, 2003, Superclick, Inc. acquired
100% of the issued and outstanding shares of Superclick Networks, Inc. from its
shareholders.  In consideration for acquiring all of Superclick
Network’s shares Superclick, Inc. issued to its previous shareholders 14,025,800
shares of Superclick, Inc.’s common stock.  As a result of the
acquisition, the former shareholders of Superclick Networks, Inc. held
immediately after the acquisition 71.7% of the issued and outstanding shares of
Superclick, Inc.’s common stock.  The remaining 28.3% were held by
Superclick, Inc.’s (formerly Grand Prix Sports, Inc.)
shareholders.
  F-7
  SUPERCLICK,
INC.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
ENDED OCTOBER 31, 2008 AND 2007
 
 NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Organization
(Continued)
 
 Concurrent
with the reverse merger of Superclick, Inc. with Superclick Networks, Inc, the
Company retroactively affected a 6 for 1 common stock split and retroactively
assigned $0.0006 par value to common stock where no value had been previously
stated.  All share and per share amounts shown in these financial
statements reflect the stock split for all periods presented.
 
 Pursuant
to its reverse merger with Superclick Networks Inc., Superclick, Inc. changed
its year-end to October 31 to coincide with the year-end of Superclick Networks,
Inc.  The Company emerged from the development stage during 2005 as
its principal operations had commenced and its national rollout had been
completed. Accordingly, the Company revised the presentation of its Consolidated
Statements of Operations to reflect that of a commercial
enterprise.
 
 Superclick
Inc’s plan of business is committed to the commercialization activities of
Superclick Network, Inc.’s products, with an emphasis on broadening its market
penetration and building product and brand awareness amongst its target customer
base in the hospitality market. Superclick, Inc. intends to grow its revenue
through expanding its sales of Superclick Network Inc.’s products and call
center support services such that it can reasonably support its operating
expenses through cashflow.
 
 Summary of Significant
Accounting Principles
 
 Principles of
consolidation
 
 The
consolidated financial statements include the accounts of Superclick Networks,
Inc. and its majority-owned subsidiaries, Superclick, Inc. and Hotel Net LLC,
which are 100% consolidated in the financial statements.  All material
inter-company accounts and transactions have been eliminated.
 
 Accounting
estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.
  F-8
  SUPERCLICK,
INC.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
ENDED OCTOBER 31, 2008 AND 2007
 
 NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Cash and cash
equivalents
 
 For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with an original maturity of three months or less to
be cash equivalents.
 
 Accounts
receivable
 
 Accounts
receivable are reported at the customers' outstanding balances less any
allowance for doubtful accounts. Interest is not accrued on overdue accounts
receivable.  The Company evaluates receivables on a regular basis for
potential reserve.
 
 Inventories
 
 Inventories
are valued at the lower of cost or market. Cost is determined on a first-in,
first-out method.  Management performs periodic assessments to
determine the existence of obsolete, slow moving and non-salable inventories,
and records necessary provisions to reduce such inventories to net realizable
value.
 
 Property and
equipment
 
 Property
and equipment are stated at cost.  Major renewals and improvements are
charged to the asset accounts while replacements, maintenance and repairs, which
do not improve or extend the lives of the respective assets, are
expensed.  At the time property and equipment are retired or otherwise
disposed of, the asset and related accumulated depreciation accounts are
relieved of the applicable amounts.  Gains or losses from retirements
or sales are credited or charged to income.
 
 The
Company depreciates its property and equipment on a declining balance method at
the following rates as applied to net depreciable value:
 
 Furniture and fixtures:
                    
                    
                    20
                    %Computer
      equipment and software:
                    
                    
                    30
                    %Leasehold improvements
                    
                    
                    20
                    %Fabrication
      equipment
                    
                    
                    20
                    %
  F-9
  SUPERCLICK,
INC.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
ENDED OCTOBER 31, 2008 AND 2007
 
 NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Long-lived
assets
 
 Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the
historical cost-carrying value of an asset may not be recovered.  The
Company assesses recoverability of the carrying value of an asset by estimating
the fair value of the asset.  If the fair value is less than the
carrying value of the asset, an impairment loss is recorded equal to the
difference between the asset's carrying value and fair value.
 
 Revenue recognition
policy
 
 Revenue
from the sale of Internet high speed connection equipment and installation is
recognized when the earning process is complete and the risk and rewards of
ownership have transferred to the customer, which is considered to have occurred
after the delivery and installation of the equipment to the
customer.
 
 Maintenance
and support revenue is recognized ratably over the maintenance
term.  First-year maintenance typically is sold with the related
software license and renewed on an annual basis thereafter. Estimated fair
values of ongoing maintenance and support obligations are based on separate
sales of renewals to other customers or upon renewal rates quoted in the
contracts.  For such arrangements with multiple obligations, we
allocate revenue to each component of the arrangement based on the estimated
fair value of the undelivered elements.  Fair value of services, such
as consulting or training, is based upon separate sales of these
services.  At times, we may enter into multiple-customer contracts in
which we allocate revenue based on the number of specified users at each
customer, and recognize revenue upon customer acceptance and satisfying the
other applicable conditions of the above described accounting
policy.
 
 Shipping and handling
costs
 
 The
Company's policy is to classify shipping and handling costs as part of cost of
goods sold in the statement of operations.
  F-10





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Advertising





The
Company expenses all advertising as incurred.  For the year ended
October 31, 2008 and 2007, the Company incurred approximately $72,441 and
$118,666, respectively in marketing and advertising expense.





Earnings per common
share





The
Company follows Statement of Financial Accounting Standards No. 128 which
requires the reporting of both basic and diluted earnings (loss) per
share.  Basic loss per share is calculated using the weighted average
number of common shares outstanding in the period.  Diluted loss per
share includes potentially dilutive securities such as outstanding options and
warrants, using the “treasury stock” method and convertible securities using the
"if-converted" method.





Issuance of common
stock





The
issuance of common stock for other than cash is recorded by the Company at
management’s estimate of the fair value of the assets acquired or services
rendered.





Income
taxes





Provisions
for income taxes are based on taxes payable or refundable for the current year.
Deferred taxes are based on temporary differences between the amount of taxable
income and pretax financial income and between the tax bases of assets and
liabilities and their reported amounts in the financial
statements.  Deferred tax assets and liabilities are included in the
financial statements at currently enacted income tax rates applicable to the
period in which the deferred tax assets and liabilities are expected to be
realized or settled as prescribed in FASB Statement No. 109, Accounting for
Income Taxes.    In June 2006, the FASB issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109” (“FIN 48”).  FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprise’s financial statements in accordance with SFAS No. 109,
“Accounting for Income Taxes” (SFAS 109”).  FIN 48 prescribes a
two-step process to determine the amount of tax benefit to be
recognized.  First, the tax position must be evaluated to determine
the likelihood that it will be sustained upon external
examination.  If the tax position is deemed “more-likely-than-not” to
be sustained, the tax position is then assessed to determine the amount of
benefit to recognize in the financial statements.  The amount of the
benefit that may be recognized is the largest amount that has a greater than
50 percent likelihood of being realized upon ultimate
settlement.  As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income
taxes.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.  The
Company underwent a change of control for income tax purposes on October 8, 2003
according to Section 381 of the Internal Revenue Code.  The Company's
utilization of U.S. Federal net operating losses will be limited in accordance
to Section 381 rules.


F-11





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Impact of accounting
standards





In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities-Including an amendment of FASB
Statement No. 115" ("SFAS 159"). SFAS 159 expands the use of fair value
accounting but does not affect existing standards which require assets or
liabilities to be carried at fair value. Under SFAS 159, a company may elect to
use fair value to measure accounts and loans receivable, available-for-sale and
held-to-maturity securities, equity method investments, accounts payable,
guarantees and issued debt. Other eligible items include firm commitments for
financial instruments that otherwise would not be recognized at inception and
non-cash warranty obligations where a warrantor is permitted to pay a third
party to provide the warranty goods or services. If the use of fair value is
elected, any upfront costs and fees related to the item must be recognized in
earnings and cannot be deferred, e.g., debt issue costs. The fair value election
is irrevocable and generally made on an instrument-by-instrument basis, even if
a company has similar instruments that it elects not to measure based on fair
value. At the adoption date, unrealized gains and losses on existing items for
which fair value has been elected are reported as a cumulative adjustment to
beginning retained earnings. Subsequent to the adoption of SFAS 159, changes in
fair value are recognized in earnings. SFAS 159 is effective for fiscal years
beginning after November 15, 2007 and is required to be adopted by the Company
in the first quarter of fiscal 2009. The Company is currently is determining
whether fair value accounting is appropriate for any of its eligible items and
cannot estimate the impact, if any, which SFAS 159 will have on its consolidated
results of operations and financial condition.





In
December 2007, the FASB issued SFAS 141(revised 2007), Business
Combinations (“SFAS 141R”). SFAS 141R will significantly change the
accounting for business combinations in a number of areas including the
treatment of contingent consideration, contingencies, acquisition costs,
IPR&D and restructuring costs. In addition, under SFAS 141R, changes in
deferred tax asset valuation allowances and acquired income tax uncertainties in
a business combination after the measurement period will impact income tax
expense. SFAS 141R is effective for fiscal years beginning after
December 15, 2008 and, as such, the Company will adopt this standard in
fiscal 2010. The Company has not yet determined the impact, if any, of
SFAS 141R on its consolidated financial statements.


F-12





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Impact of accounting
standards (Continued)





In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51
(“SFAS 160”). SFAS 160 will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests
(NCI) and classified as a component of equity. This new consolidation method
will significantly change the account with minority interest holders.
SFAS 160 is effective for fiscal years beginning after December 15,
2008 and, as such, the Company will adopt this standard in fiscal 2010. The
Company has not yet determined the impact, if any, of SFAS 160 on its
consolidated financial statements.





In
February 2008, the FASB issued FASB Staff Position 157-2, Effective Date of FASB
Statement No. 157, which delays the effective date of SFAS No. 157. We
believe the delayed adoption of SFAS No. 157 will not have a material
impact on our financial statements.





In March
2008, the FASB issued SFAS 161, Disclosures about Derivative Instruments and
Hedging Activities—an amendment of FASB Statement No. 133. SFAS 161 amends SFAS
133 and changes the disclosure requirements for derivative instruments and
hedging activities. Entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement 133 and
its related interpretations, and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance, and
cash flows. The Statement is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged. We are currently assessing the financial impact of SFAS
161 on our consolidated statements.





In
May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)” (FSP APB 14-1).  FSP APB 14-1 requires recognition of
both the liability and equity components of convertible debt instruments with
cash settlement features.  The debt component is required to be
recognized at the fair value of a similar instrument that does not have an
associated equity component.  The equity component is recognized as
the difference between the proceeds from the issuance of the note and the fair
value of the liability.  FSP APB 14-1 also requires an accretion of
the resulting debt discount over the expected life of the debt.  This
FSP shall be effective for financial statements issued for fiscal years
beginning after December 15, 2008, and  interim periods within those
fiscal years. Early adoption is not permitted.  We are currently
evaluating the impact of FSP APB 14-1.


F-13





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Impact of accounting
standards (Continued)




In May
2008, the FASB issued Statement of Financial Accounting Standards ("SFAS") No.
162, The Hierarchy of Generally Accepted Accounting Principles. This standard is
intended to improve financial reporting by identifying a consistent framework,
or hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with generally accepted
accounting principles in the United States for non-governmental entities. SFAS
No. 162 is effective 60 days following approval by the U.S. Securities and
Exchange Commission ("SEC") of the Public Company Accounting Oversight Board's
amendments to AU Section 411, The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles. We do not expect SFAS No. 162 to have
a material impact on the preparation of our financial statements.




On June
16, 2008, the FASB issued final Staff Position (FSP) No. EITF 03-6-1,
"Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities," to address the question of whether instruments
granted in share-based payment transactions are participating securities prior
to vesting. The FSP determines that unvested share-based payment awards that
contain rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. We are currently evaluating the requirements of (FSP) No.
EITF 03-6-1 as well as the impact of the adoption on our financial
statements.




Concentrations of credit
risk





For the
year ended October 31, 2008, two customers individually accounted for 41% (22%
and 19%) of accounts receivable.  The Company performs ongoing credit
evaluations of its customers.  For the year ended October 31, 2007,
three customers individually accounted for 32% (11%, 11% and 10%) of accounts
receivable.





During
the year ended October 31, 2008, the Company’s largest customer accounted for
10% of sales.  During the year ended October 31, 2007, the Company’s
two largest customers accounted for 28% (16% and 12%) of sales.





For the
year ended October 31, 2008 and 2007, approximately 31% and 28%, respectively of
the Company's net sales were made to customers outside the United
States.


F-14





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Concentrations of credit
risk (Continued)





The
Company has been dependent on third-party equipment manufacturers, distributors,
dealers, and contractors for all of its supply of communications
equipment.  For the years ended October 31, 2008 and 2007, the
Company’s two and single largest supplier(s) accounted for 63% (38% and 25%) and
10% of product and service purchases, respectively.  The Company is
dependent on the ability of its suppliers to provide products and services on a
timely basis and on favorable pricing terms.





The loss
of certain principal suppliers or a significant reduction in product
availability from principal suppliers could have a material adverse effect on
the Company.





The
Company has maintained balances in excess of federally insured limits from time
to time during the fiscal year.  Management periodically reviews the
adequacy and strength of the financial institutions and deems this to be an
acceptable risk.





Disclosure about Fair Value
of Financial Instruments





The
Company estimates that the fair value of all financial instruments at October
31, 2008, as defined in FASB 107, does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
balance sheet.  The estimated fair value amounts have been determined
by the Company using available market information and appropriate valuation
methodologies.  Considerable judgment is required in interpreting
market data to develop the estimates of fair value, and accordingly, the
estimates are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.





Accounting
for Share-Based Compensation





The
Company adopted the provisions of SFAS 123 (revised 2004), Share-Based
Payment (SFAS 123(R), which requires the Company to recognize expense
related to the fair value of share-based compensation awards as of the beginning
of the second quarter in fiscal 2006.  Management elected to use the
modified prospective transition method as permitted by SFAS 123(R) and
therefore has not restated the Company’s financial results for prior
periods.   See Note L for further information.


F-15





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE A – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Foreign Currency
Translation





The
financial statements of the Canadian Subsidiary are measured using the Canadian
dollar as the functional currency.  Assets, liabilities and equity
accounts of the company are translated at exchange rates as of the balance sheet
date or historical acquisition date, depending on the nature of the
account.  Revenues and expenses are translated at average rates of
exchange in effect during the year.  The resulting cumulative
translation adjustments have been recorded as a separate component of
stockholders' equity.  The financial statements are presented in
United States of America dollars.





Research and
development





Expenses
related to present and future products are expensed as incurred.





NOTE B – ACCOUNTS
RECEIVABLE





The
accounts receivable balance of $2,142,205 as of October 31, 2008 is reported net
of an allowance for doubtful accounts of $55,974. The accounts receivable
balance of $834,813 as of October 31, 2007 is reported net of an allowance for
doubtful accounts of $56,848.





NOTE C -
INVENTORY





Inventory
is comprised of computer equipment and stated at the lower of cost or market, as
determined using the first in, first out method.   The following
table represents the major components of inventory at October 31, 2008 and
2007:





2008
                      
                      
                      2007Computer
      equipment
                      
                      $
                      350,912
                      
                      
                      $
                      198,009Allowance
      for obsolete inventory
                      
                      
                      (20,614
                      )
                      
                      
                      (20,367
                      )Inventory,
      net
                      
                      $
                      330,298
                      
                      
                      $
                      177,642




F-16





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE D - PROPERTY AND
EQUIPMENT





Property
and equipment consisted of the following at October 31, 2008 and
2007:





2008
                  
                  
                  2007Computer
      hardware
                  
                  $
                  182,298
                  
                  
                  $
                  218,860Furniture
      & fixtures
                  
                  
                  128,466
                  
                  
                  
                  164,521Computer
      software
                  
                  
                  86,548
                  
                  
                  
                  110,839Leasehold
      improvements
                  
                  
                  28,871
                  
                  
                  
                  36,974Fabrication
      mold and dye
                  
                  
                  18,701
                  
                  
                  
                  23,950444,884
                  
                  
                  
                  555,144Accumulated
      depreciation
                  
                  
                  (291,487
                  )
                  
                  
                  (306,859
                  )Fixed
      assets, net
                  
                  $
                  153,397
                  
                  
                  $
                  248,285





Depreciation
expense for the years ended October 31, 2008 and 2007 was $61,629 and $64,775,
respectively.





NOTE E – ACCOUNTS
PAYABLE





Accounts
payable and accrued expenses at October 31, 2008 consisted of $507,559 in trade
payables, $48,840 related to professional fees, $15,039 of accrued interest and
$193,208 of accrued payroll of which $42,614 and $45,517 are due to the CEO and
CFO, respectively.





Accounts
payable and accrued expenses at October 31, 2007 consisted of $329,045 in trade
payables, $26,885 related to professional fees, $13,985 of accrued interest and
$183,894 of accrued payroll of which $42,614 and $45,517 are due to the CEO and
CFO, respectively.





NOTE F – INCOME TAXES
PAYABLE





As of
October 31, 2008, $84,220 was accrued for income taxes payable to the Canadian
and Provincial income tax authorities.  The Company recorded a
provision for income taxes of $157,175 for the year ended October 31, 2008 based
on a combined Federal and Provincial tax rate of 32%.   The
Company updates the estimate of its annual effective tax rate at the end of each
quarterly period.  The Company’s estimate takes into account
estimations of annual pre-tax income, the geographic mix of pre-tax income and
its interpretations of tax laws and the possible outcomes of current and future
audits.


F-17





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE G – DEFERRED
REVENUE





Deferred
revenue consists of funds received in advance of services being
performed.  As of October 31, 2008, the deferred revenue balance of
$1,643,665 consisted of 1) $904,365 related to support and maintenance for
multiple customers; 2) $408,325 related to the sale of a master license
agreement which commenced August 2007 and is being amortized over its term of
thirty six (36) months; and 3) $330,975 related to customer deposits for future
hardware installations.





As of
October 31, 2007, the deferred revenue balance of $1,450,934 consisted of 1)
$574,230 related to support and maintenance for multiple customers 2) $601,732
related to the sale of a master license agreement which commenced August 2007,
and 3) $274,972 related to customer deposits for future hardware installations
and to the sale of a master license agreement which will be amortized over its
term of thirty six (36) months commencing August 2007.





Deferred
revenue related to support and maintenance is recorded in a manner consistent
with the Company’s revenue recognition policy.  The Company generally
enters into one-year upgrade and maintenance contracts with its
customers.  The upgrade and maintenance contracts are generally paid
in advance.  The Company defers such payment and recognizes revenue
ratably over the contract period.





NOTE H – NOTES
PAYABLE





Notes
payable, was $283,000 as of October 31, 2008 compared to $193,400 as of October
31, 2007.  The Company currently has five notes outstanding to the
former shareholders of Hotel Net LLC.  Four of the notes have a face
amount of $70,000 payable quarterly through December 31, 2009 and do not accrue
interest.  The interest, if imputed, would be immaterial to these
financial statements taken as a whole.





The
remaining note originally dated August 31, 2005 has a face amount of $70,000,
accrues interest at the rate of nine percent (9%) per annum, is convertible into
shares of common stock at a conversion price of $.50, matured on January 1, 2006
and is currently in default.





During
the year ended October 31, 2008 and 2007, the Company recognized $6,696 and
$6,678, respectively of interest expense on the single interest bearing
note.  Accrued interest payable on the remaining interest bearing note
was $15,039 which was also convertible into 178,478 shares of common stock as of
October 31, 2008.  The principle balance on all of the notes as of
October 31, 2008 was $193,400.


F-18





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE I – CONVERTIBLE
DEBENTURE





In August
2005, the Company completed a private placement of convertible debentures
generating gross proceeds of $2.25 million and the issuance of warrants to
purchase 965,997 shares of the Company’s common stock.  The
convertible debentures matured in August 2006 and now bear interest of 12%
payable quarterly at the option of the Company in cash or stock.  The
debentures and warrants are convertible into the Company's common stock at a
conversion price equal to 80% of the average closing bid price of the Company's
common stock for the 45 trading days preceding a conversion date.





Pursuant
to Paragraph 14 of EITF 00-19, Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock, the warrants
issued in connection with the convertible debentures meet the requirements of
and are accounted for as a liability.  Using the Black-Scholes
option-pricing method, the value of the warrants is reassessed at each balance
sheet date and marked to market as a derivative gain or loss until exercised or
expiration.  Upon exercise of each of the warrants, the related
liability is removed by recording an adjustment to additional
paid-in-capital.  The warrants had no value as of October 31,
2008.  As of October 31, 2008, the value of the warrants was
reassessed using the Black-Scholes option-pricing model using the following
assumptions:  expected term 1.75 years, exercise price $.30, spot
price $0.075, volatility 31%, risk free rate 3.97%, and zero dividend
yield.  For the year ended October 31, 2008, the Company recognized a
derivative gain of $17,963 and loss of $17,771, respectively.





Debenture
Repayments





During
the year ended October 31, 2008 and 2007, the Company made payments totaling
$816,644 and $1,168,163, respectively towards accrued interest and principle on
our debenture as described in the following table:


F-19





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE I – CONVERTIBLE
DEBENTURE (Continued)





Debenture Repayments
(Continued)





Year Ended
                          October 31,
                          2008
                        
                        
                        Year Ended
                          October 31,
                          2007Total
      principle payments
                        
                        $
                        680,088
                        
                        
                        $
                        903,381Total
      interest payments
                        
                        
                        136,556
                        
                        
                        
                        264,782Total
      payments
                        
                        $
                        816,644
                        
                        
                        $
                        1,168,163Breakdown
      of debenture payments by the issuance of stock or cash:Total
      cash paid for debenture:Principle
                        
                        $
                        479,953
                        
                        
                        $
                        688,381Interest
                        
                        
                        120,214
                        
                        
                        
                        177,270Total
      cash payments
                        
                        
                        600,167
                        
                        
                        
                        865,651Total
      stock issued for debenture:Principle
                        
                        
                        200,135
                        
                        
                        
                        215,000Interest
                        
                        
                        16,342
                        
                        
                        
                        87,512Total
      stock payments
                        
                        $
                        216,477
                        
                        
                        $
                        302,512Total
      payments
                        
                        $
                        816,644
                        
                        
                        $
                        1,168,163Total shares issued
                        
                        
                        1,996,585
                        
                        
                        
                        4,846,359





Debenture
Interest





During
the year ended October 31, 2008 and 2007, the Company incurred $164,748 and
$255,259, respectively, in interest expense.


F-20





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE J -
COMMITMENTS





On
October 1, 2004 the Company began a lease for office space.  The lease
extends through September 30, 2009 at a rate of $4,867 per month.  The
Company financed computer equipment with a loan term which extends through
September 28, 2009 at a rate of $1,230 per month.  At October 31,
2008, our contractual obligations under these commitments were as
follows:





Rent
                    
                    
                    Equipment
                    
                    
                    Total2009
                    
                    $
                    58,404
                    
                    
                    $
                    12,626
                    
                    
                    $
                    71,0302010
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -$
                    58,404
                    
                    
                    $
                    12,626
                    
                    
                    $
                    71,030





During
the year ended October 31, 2008 and 2007, the Company incurred $69,158 and
$64,548, respectively, in rent expense.





We do not
maintain any long-term or exclusive commitments or arrangements to purchase
merchandise from any single supplier.





NOTE K - PREFERRED AND
COMMON STOCK





Preferred and Common
Stock





The
Company has authorized 20,000,000 shares of $.0001 par value preferred stock
available for issuance.No preferred
shares have been issued as of October 31, 2008.





Common Stock Issued for Debt
Repayment





During
the year ended October 31, 2007, the Company issued 2,094,503 shares of common
stock in exchange for $87,512 of interest payable and 2,751,856 shares of common
stock in exchange for $115,000 of principle related to the convertible
debentures.





During
the year ended October 31, 2008, the Company issued 1,996,585 shares of common
stock, including 1,846,182 shares in exchange for $200,135 of debenture
principle and 150,403 shares of in exchange for $16,342 of accrued interest
related to our debentures.


F-21





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE K - PREFERRED AND
COMMON STOCK (Continued)





Common Stock Issued for
Services





During
the year ended October 31, 2007, the Company issued 867,429 shares for services
with 380,122 to directors for services rendered valued at $39,472, 75,000 shares
to outside advisors valued at $17,250, 412,307 shares to our Chairman, Todd
Pitcher for services rendered valued at $32,984 and 141,656 shares issued in
November 2007 for which the Company accrued $19,832 for director compensation as
of October 31, 2007 as reflected in out statement of shareholder’s equity
bringing the total value of stock issued and to be issued to $109,538 during
2007.  Value for shares issued for services is based on fair market
value of our stock on the date of issuance.





During
the year ended October 31, 2008, the Company issued 384,122 shares of common
stock in exchange for director services.  Of the 384,122 shares, 1)
141,656 shares were issued for services performed in fiscal year 2007 which
expense of $19,832 was recognized in our fiscal year ending October 31, 2007,
and; 2) 242,466 shares were issued for services valued at
$34,645.  The Company has accrued $18,000 to common stock payable for
director services performed.  We anticipate the issuance of common
stock for these services during our first fiscal quarter of 2009.





Common Stock
Options





During
the year ended October 31, 2007, 490,000 options were exercised resulting in
$24,500 to the company and the issuance of 490,000 shares of common
stock.  An additional 230,000 options were exercised on October 31,
2007 with the exercise price of $11,500 received and shares issued in November
2007.  Also, during the year, the Company canceled 1,549,792 options
(874,792 options due to employee terminations and 675,000 voluntary
cancellations from upper management).





During
the year ended October 31, 2008, no options were canceled or
granted.  740,000 shares of common stock were issued pursuant to
option exercises, including 1) 230,000 shares issued pursuant to prior year
option exercises, and; 2) 510,000 shares issued pursuant to options exercised
during 2008 which resulted in $25,500 to the company.  No other option
activity occurred.


F-22





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE L -
WARRANTS





At
October 31, 2008 the Company had 965,997 warrants related to convertible
debentures outstanding entitling the holder thereof the right to purchase one
common share for each warrant held as follows:





ExerciseWarrant
                          
                          Number
      of
                          
                          Price
      Per
                          
                          ExpirationClass
                          
                          Warrants
                          
                          Warrant
                          
                          DateDebenture
                          
                          
                          735,370
                          
                          >or=to
      $0.30
                          
                          7/31/2010Debenture
                          
                          
                          230,627
                          
                          >or=to
      $0.30
                          
                          8/17/2010Total
                          
                          
                          965,997




During
the year ended October 31, 2008 and 2007, no warrants were issued or exercised
and 200,000 and 1,899,999 warrants expired, respectively.





NOTE M – STOCK INCENTIVE
PLANS





The 2004 Incentive Stock
Option Plan





On April
8, 2004, the Board of Directors of the Company adopted the 2004 Incentive Stock
Option Plan. This Plan is a plan for key Employees (including officers and
employee directors) and Consultants of the Company and its Affiliates and is
intended to advance the best interests of the Company, its Affiliates, and its
stockholders by providing those persons who have substantial responsibility for
the management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.





The
Company may issue each of the following under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award The Plan was effective April 9, 2004 (the "Effective
Date"), provided that within one year of the Effective Date, the Plan shall have
been approved by at least a majority vote of stockholders. No Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award shall be granted pursuant to the Plan ten years after
the Effective Date.





During
the year ended October 31, 2007, 490,000 shares were issued pursuant to option
exercises and 1,549,792 options (874,792 options due to employee terminations
and 675,000 voluntary cancellations from upper management) were canceled (See
Note K).  No other option activity occurred.


F-23





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE M – STOCK INCENTIVE
PLANS (Continued)





The 2004 Incentive Stock
Option Plan (Continued)





During
the year ended October 31, 2008, 740,000 shares of common stock were issued
pursuant to option exercises, including 1) 230,000 shares issued pursuant to
prior year option exercises, and; 2) 510,000 shares issued pursuant to options
exercised during 2008 (See Note K).  No other option activity
occurred.





The
following table summarizes the Company's stock option activity for the year
ended October 31, 2008:





2008Weighted AverageShares
                  
                  
                  Exercise PriceOutstanding
      at beginning of year
                  
                  
                  14,462,356
                  
                  
                  $
                  0.077Granted
                  
                  
                  -
                  
                  
                  
                  -Forfeited
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  (510,000
                  )
                  
                  
                  0.050Outstanding
      at end of year
                  
                  
                  13,952,356
                  
                  
                  
                  0.075Options
      exerciseable at year end
                  
                  
                  13,952,356




The
following table summarizes information about the Company's stock options
outstanding at October 31, 2008:





Options Outstanding
                                      
                                      
                                      Options ExercisableNumber
                                      
                                      
                                      Weighted
                                      
                                      
                                      Weighted
                                      
                                      
                                      
                                      
                                      
                                      WeightedRange of
                                      
                                      
                                      Outstanding
                                      
                                      
                                      Average
                                      
                                      
                                      Average
                                      
                                      
                                      
                                      
                                      
                                      AverageExercise
                                      
                                      
                                      At October 31,
                                      
                                      
                                      Contractural
                                      
                                      
                                      Exercise
                                      
                                      
                                      Number
                                      
                                      
                                      ExercisePrices
                                      
                                      
                                      2008
                                      
                                      
                                      Life (years)
                                      
                                      
                                      Price
                                      
                                      
                                      Outstanding
                                      
                                      
                                      Price$
                                      0.50
                                      
                                      
                                      
                                      589,856
                                      
                                      
                                      
                                      -
                                      
                                      
                                      $
                                      0.50
                                      
                                      
                                      
                                      589,856
                                      
                                      
                                      $
                                      0.500.65
                                      
                                      
                                      
                                      137,500
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      0.65
                                      
                                      
                                      
                                      137,500
                                      
                                      
                                      
                                      0.650.05
                                      
                                      
                                      
                                      13,225,000
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      0.05
                                      
                                      
                                      
                                      13,225,000
                                      
                                      
                                      
                                      0.05Total
                                      
                                      
                                      
                                      13,952,356
                                      
                                      
                                      
                                      -
                                      
                                      
                                      $
                                      0.07
                                      
                                      
                                      
                                      13,952,356
                                      
                                      
                                      $
                                      0.07




F-24





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE M – STOCK INCENTIVE
PLANS (Continued)





The 2004 Incentive Stock
Option Plan (Continued)




market
value of stock options granted using the Black-Scholes Option Pricing Model on
the date of grant and recognizes related compensation expense ratably over the
options vesting period for all future grants.  The Company also
estimates the amount of forfeitures or the amount of options that will be
canceled in the future.  During the year ended October 31, 2008 and
2007, the Company recognized no compensation expense.  The Company has
recorded compensation expense of $767,017 through October 31, 2008.





2004 Superclick, Inc.
Non-Employee Director's Stock Incentive Plan





On
December 31, 2003, the Board of Directors of the Company adopted the 2004
Superclick, Inc. Non-Employee Director's Stock Incentive Plan (the "Stock
Incentive Plan").  The Stock Incentive Plan provides for the issuance
of Options, Restricted Stock, and/or Deferred Stock to an
Awardee.  The total number of shares of Common Stock which may be
awarded under the Plan is 1,500,000.  If any awarded shares are
forfeited, they become available for future issuance.  An annual
aggregate limit of 300,000 shares (including Options, Restricted Stock, and
Deferred Stock) is set for any individual Director.





The Stock
Incentive Plan has a term of ten years commencing on January 1,
2004.  Awardees are defined as director to whom an award is
made.  An eligible director is any person who on the date of grant is
a member of the Board of Directors of the Company and is not an employee of the
Company or of any Subsidiary.  Stock Options are non-qualified
right-to-buy Options for the purchase of Common Stock of the
Company.  The term of each Option shall be ten years from the Date of
Grant.  The Option Price shall be the Fair Market Value of Superclick,
Inc. Common Stock on the date the Option is granted.  Under no
circumstances shall any Option vest in less than one year from the date of
grant.  Shares purchased upon exercise of an Option must be paid for
in full at the time of exercise either in cash or with currently owned
shares.  Neither the Committee on Directors and Governance nor the
Board of Directors may re-price any Option that is less than the option exercise
price.  Restricted Stock is Common Stock of the Company restricted as
to sale in such fashion as the Committee on Directors and Governance shall
determine.  Prior to the lifting of the restrictions, the Awardee will
be entitled to receive dividends from and to vote the shares of Restricted
Stock.





During
the year ended October 31, 2007, the Company issued 380,122 shares to directors
for services rendered valued at $39,472 and accrued an additional $19,832 which
141,656 shares of common stock were issued in November 2007.  Value
for shares issued for services is based on fair market value of our stock on the
date of issuance.


F-25





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE M – STOCK INCENTIVE
PLANS (Continued)





The 2004 Incentive Stock
Option Plan (Continued)





During
the year ended October 31, 2008, the Company issued 384,122 shares of common
stock in exchange for director services.  Of the 384,122 shares, 1)
141,656 shares were issued for services performed in fiscal year 2007 which
expense of $19,832 was recognized in our fiscal year ending October 31, 2007,
and; 2) 242,466 shares were issued for services valued at
$34,645.  The Company has accrued $18,000 to common stock payable for
director services performed.  We anticipate the issuance of common
stock for these services during our first fiscal quarter of 2009.





From
inception through October 31, 2007, the Company has issued 2,494,772 shares to
our directors under this stock incentive plan.





NOTE N – NET OPERATING LOSS
CARRY FORWARD





In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.  The ultimate realization of deferred tax assets
is dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment.





During
the year ended October 31, 2007, our U.S. based operation had net income of
approximately $233,500.  Upon application of the subsidiary’s NOL the
remaining NOL is $5,748,198.  If the Company did not have an NOL carry
forward taxes payable of approximately $93,400, based on a 40% tax rate, would
have been payable as of October 31, 2007 to the United States and state taxing
authorities.





During
the year ended October 31, 2008, our U.S. based operation had a net loss of
approximately $43,000.  A valuation allowance for the full amount of
the net deferred tax asset was recorded because of uncertainties as to the
amount of taxable income that would be generated in future years.  The
valuation allowance increased by approximately $17,200 for the year ended
October 31, 2008, assuming a tax rate of 40%.


F-26





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE N – NET OPERATING LOSS
CARRY FORWARD (Continued)





United States Corporation Income
      TaxesYear of Loss (Income)
                                
                                Amount
                                
                                Expiration DateOctober
      31, 2008
                                
                                $
                                44,582
                                
                                October
      31, 2028October
      31, 2006
                                
                                
                                781,183
                                
                                October
      31, 2026October
      31, 2005
                                
                                
                                3,969,331
                                
                                October
      31, 2025October
      31, 2004
                                
                                
                                898,697
                                
                                October
      31, 2024October
      31, 2003
                                
                                
                                53,638
                                
                                October
      31, 2023December
      31, 2002
                                
                                
                                45,349
                                
                                December
      31, 2022$
                                5,792,780




The
expiration dates for U.S. net operating losses (NOL) may be extendable under
Section 381 of the U.S. Internal Revenue Code.





During
the year ended October 31, 2007, our wholly owned Canadian subsidiary generated
net income for tax purposes of $948,000 CDN.  However, application of
the subsidiary’s NOL resulted in zero tax liability as of October 31,
2007.  If the Canadian subsidiary did not have an NOL carry forward
approximately $320,000 would have been payable to the Federal and Provincial
authorities based on a combined tax rate of approximately 32%.





During
the year ended October 31, 2008, our wholly owned Canadian subsidiary generated
net income for tax purposes of $1,153,148 CDN.   However, the
subsidiary lowered its tax liability to both the Federal and Provincial
authorities with the application of its carry forward R&D tax credits and
NOL. If the subsidiary did not have the carry forward balances available, based
on a combined tax rate of approximately 32%, the provision would have been
approximately $363,240 CDN.





The
subsidiary’s Federal and Provincial NOL carry forward balances as of October 31,
2008 are as follows:





Canadian Income Taxes (Stated in
      CAD)Year of Loss
                                                        
                                                        Federal
                                                        
                                                        
                                                        Provincial
                                                        
                                                        Expiration DateOctober
      31, 2006
                                                        
                                                        $
                                                        254,093
                                                        
                                                        
                                                        $
                                                        312,532
                                                        
                                                        October
      31,
2024




F-27





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007





NOTE
N – NET OPERATING LOSS CARRY FORWARD (Continued)





The
subsidiary recently underwent an audit by the Canadian Federal Government, the
outcome of which resulted in a potential reduction to the NOL carry
forward.  The Company plans to contest the potential adjustment and
has not reduced the potential NOL available by that amount for purposes of
calculating our provision for income tax.





The
subsidiary receives tax credits for research and development activities from
Revenue Canada. The Company reflected approximately $78,556 USD in tax credits
available for future use in its October 31, 2008 balance sheet and approximately
$73,692 in its October 31, 2007 balance sheet.





The
subsidiary receives reimbursement of research and development activities from
the Province of Quebec beyond the tax credits described above.  As of
October 31, 2008 and 2007, the Company recognized $34,927 and $43,070,
respectively, as a receivable for those research and development
activities.





The
subsidiary receives reimbursement of sales tax charged on the resale of goods
and services transacted in Canada from both Federal and from the Provincial
governments beyond the tax credits described above.  As of October 31,
2008 and 2007, the Company recognized $13,342 and $990, respectively, as a
receivable for those sales taxes.





NOTE O – RELATED PARTY
TRANSACTION





Mr.
Pitcher, Chairman of the Company’s Board of Directors, provides consulting
services to the Company in exchange for monthly compensation of $5,000 and
related expenses.  During the year ended October 31, 2008, Mr. Pitcher
received $69,990.  In addition, Mr. Pitcher was issued 104,819 shares
of common stock for his services as Chairman valued at an average of $0.14 per
share.  During the year ended October 31, 2007, Mr. Pitcher received
$71,690.  In addition, Mr. Pitcher was awarded 465,789 shares of
common stock for his services as Chairman valued at $0.08 per share or the fair
market value of the stock on the date of issuance.





Mrs.
Papapicco, formerly the Director of Operations, is the spouse of Mr. Natale,
Chief Executive Officer of the Company.  Mrs. Papapicco earned an
annual salary of $80,000 Canadian dollars.  During the year ended
October 31, 2008, she received approximately $32,200 in United States
dollars.  During the year ended October 31, 2007, Mrs. Natale received
$54,135 in Canadian dollars or approximately $49,176 United Stated
dollars.  Mrs. Papapicco became separated from the Company on May 31,
2008.


F-28





SUPERCLICK,
INC.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED OCTOBER 31, 2008 AND 2007


NOTE P – GOING CONCERN AND
MANAGEMENT’S PLANS





The
Company has an accumulated capital deficit and significant debt that raise
substantial doubt about its ability to continue as a going
concern.  The Company’s continued existence is dependent upon its
ability to increase operating revenues and/or raise additional equity capital
sufficient to generate enough cash flow to finance operations in future
periods.  There can be no assurance that such additional financing
will be obtained.   The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




NOTE Q – SUBSEQUENT
EVENTS





None.


F-29