**Back
            to Table of Contents**





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-KSB/A**





(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, 2005 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)





11995
      EL
      CAMINO REAL


SUITE
      301


SAN
      DIEGO, CA 92130


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





**Registrant’s
      telephone number, including area code:**


**(858)
      518-1387**








**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





**Back
        to Table of Contents**




The
      Registrant’s revenues for the year ended October 31, 2005 were $3,205,696.




The
      aggregate market value of the Registrant's common stock held by non-affiliates
      of the Registrant on February 10, 2006 (based on the closing sale price of
      US
      $0.12 per share of the Registrant's common stock, as reported on
      Over-The-Counter Bulletin Board on that date) was approximately U.S. $3,440,061.
      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 February 10,
      2006 was 28,667,176.




**Documents
      incorporated by reference: None**





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


**EXPLANATORY
      NOTE**





This
      Amendment on Form 10-KSB/A to Superclick, Inc. (the "Company" or the
      "Registrant") Annual Report on Form 10-KSB for the year ended October 31, 2005
      (the "Original Filing") which was filed with the Securities and Exchange
      Commission on February 15, 2006, is being filed to amend the Original Filing
      as
      follows:





x





x





x





Except
      for the amendments described above, this Form 10-KSB/A does not modify or update
      other disclosures in, or exhibits to, the Original Filing. This Form 10-KSB/A
      is
      filed as a result of the Company becoming aware of a reporting oversight.
      Consent of our independent auditors is attached to this Form 10-KSB/A as Exhibit
      (23) (i) and certifications from our Chief Executive Officer and Chief Financial
      Officer required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002
      are
      attached to this Form 10-KSB/A as Exhibits 31.1, 31.2, 32.1 and
      32.2.


**Back
          to Table of Contents**




TABLE
      OF CONTENTS





ITEM
                NUMBER AND CAPTION
            PAGEForward-Looking
                Statements
            1PART
                I1.
                Description of Business
            12.
                Description of Property
            103.
                Legal Proceedings
            114.
                Submission of Matters to a Vote of Security
                Holders
            11PART
                II5.
                Market for Common Equity and Related Stockholder
                Matters
            116.
                Management's Discussion and Analysis of Financial
                Condition and Results of Operations
            167.
                Financial Statements
            268.
                Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure
            278A.
                Controls and Procedures
            27PART
                III9.
                Directors, Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange
                Act
            2910.
                Executive Compensation
            3111.
                Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters
            3412.
                Certain Relationships and Related
                Transactions
            3513.
                Exhibits and Reports on Form 8-K
            3614.
                Principal Accountant Fees and
                Services
            39




**Back
          to Table of Contents**




**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 (“Superclick”, the “Company” or the “Registrant”)
      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 in the business of providing and installing broadband high speed
      Internet connection equipment in hotels on a worldwide basis, and 24x7 customer
      support at its owned and operated 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.





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


-1-
 **Back
          to Table of Contents**


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.





Superclick
      emerged from the development stage during the year ended October 31, 2005.


Superclick’s
      primary objective is to continue to expand its installed room base throughout
      North America, Europe, Latin America and the Caribbean, and to provide 24x7
      dedicated customer support to its hotel customers. At present, the Company
      has
      installed its IP management product in approximately 80,000 rooms.





However,
      to manage existing corporate overhead, and to finance capital expenditures
      on
      installations, Superclick will continue to rely on cash advances from
      shareholders, as well as to seek additional debt or equity financing. Superclick
      will also attempt to reduce its operating expenses. There can be no assurance
      that any such additional financing will be available on terms, in amounts,
      or at
      timing acceptable to Superclick, if available at all.




**BUSINESS**





The
      Company provides IP-based data management solutions via its SIMS (“Superclick
      Internet Management System”) supported by a 24x7 customer support center to the
      hospitality, MTU, university and healthcare markets. SIMSTM is Linux-based
      software, typically referred to as Visitor-Based Networking (VBN) software,
      which manages the provisioning and administration of Internet access in the
      hospitality, Multi-Tenant Unit (MTU), university and healthcare markets.





Superclick
      markets and installs SIMSTM as part of a turnkey hardware and software deployment
      for its customers and also provides follow-on maintenance and guest service
      support through its 24x7 helpdesk. SIMSTM can be deployed with hardware which
      provides High Speed Internet Access (HSIA) via Ethernet, DSL, WiFi or in
      combination. The Company’s SIMSTM platform has been successfully deployed in
      approximately 500 hotels throughout the United States, Canada, Europe, Latin
      America and the Caribbean.





The
      Company’s customers include the Commonwealth Hospitality Group, InterContinental
      Hotels Group, Candlewood Suites, Comfort Inn, Crowne Plaza, Doubletree,
      Fairfield Inn, Fairmont Hotels & Resorts, Four Points by Sheraton, Hampton
      Inn & Suites, Hilton, Holiday Inn, Hampton Inn, JW Marriott, Novotel,
      Quality Suites, Radisson, Residence Inn, Sheraton, Staybridge Suites,
      Travelodge, Westin and Wyndham.


-2-
 **Back
          to Table of Contents**




*Business
      Model*





Superclick’s
      current business model is to provide its 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, tenants and other users as well as any associated revenue charged.
      This provides Superclick with one-time revenue and represents the majority
      of
      current revenue to date.





Superclick
      also provides customers with 24/7 guest support services through toll-free
      access to its Montreal-based helpdesk. The Company generally charges customers
      a
      flat fee on a per-room, per-year basis for access to the helpdesk by guests
      and
      users. A per-call and bundled guest service offering is also offered in select
      markets. Customer support revenue is a growing revenue stream as customers
      are
      added to Superclick’s footprint and are a second, recurring source of revenue.





In
      addition, Superclick continues to develop a suite of “IP (Internet Protocol)
      services” with revenue generating features that allow customers in select
      markets with the ability to leverage their Internet infrastructure to increase
      revenues and achieve a substantial ROI. Superclick creates revenue sharing
      arrangements with hotels based on these features, creating yet another revenue
      stream to its business model.





**COMPETITION**





Nearly
      all 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 Superclick’s 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, personnel
      experience and price.





Superclick
      has many competitors who contend for the same customers. They are competent,
      experienced and continuously working to take work and projects away from
      Superclick. These competitors range in size from one million dollars in annual
      revenue to several hundred million dollars in annual revenue. Most of the
      Company's business is, at present, based on one time sales, although we are
      attempting to implement a recurring revenue model through service and customer
      support. We have achieved a level of trust with each client that is comfortable,
      but not secure. We recognize that the Company's niche areas are desirable to
      other professional service firms, and we continuously seek to improve within
      these niches rather than expanding to new areas.


-3-
 **Back
          to Table of Contents**




**INTELLECTUAL
      PROPERTY AND OTHER PROPRIETARY RIGHTS**





Superclick
      has registered the following trademarks with the Canadian Trademark Office:
      "Superclick". We have pending patent applications filed in Canada for a
      "hospitality remote access server" and in the U.S. for an "Internet
      communication system in a network for the hospitality industry." Both patent
      applications are pending.





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 names that people think of when they think of
      management services.





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.




**RISK
      FACTORS**





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 the combined Company does obtain will be sufficient to meet the
      combined Company's needs in the long term. Through October 31, 2005, a
      significant portion of our financing has been through private placements of
      common stock and warrants. 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. Management believes that we will continue to
      incur
      net losses through for the foreseeable future. Based on our current resources,
      we will need additional equity or debt financing or we will need to generate
      revenues through sales of our products or entering into strategic alliances
      to
      be able to sustain our operations until we achieve profitability, if ever.





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


-4-
 **Back
          to Table of Contents**




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:**





*The
      Company's revenue and operating results may fluctuate significantly from quarter
      to quarter, and fluctuations in operating results could cause its stock price
      to
      decline.*





The
      Company's 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 the
                Company's 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 the
                Company
                could provide; and


*
            reductions
                in the prices of services offered by competitors.




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


-5-
 **Back
          to Table of Contents**




efforts,
      we may be unable to prevent third parties from soliciting our employees or
      customers or infringing upon or misappropriating our intellectual property.





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 the Company’s founders and current CEO, is intimately involved in
      our business and has day to day relationships with critical customers and is
      also critical to our product development. Superclick is not able to afford
      additional staff to supplement these key personnel. 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 the Company competes is intensely competitive and actions by
      competitors could render its services less competitive, causing revenue and
      income to decline.*





The
      ability to compete depends on a number of factors outside of the Company's
      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 the Company's customers to supply the solutions themselves;
                and


·
            the
                extent of competitors' responsiveness to customer needs.





The
      Company may not be able to compete effectively on these or other factors. If
      the
      Company is unable to compete effectively, market position, and therefore revenue
      and profitability, would decline.


-6-
 **Back
          to Table of Contents**




*International
      business exposes the 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 the Company's ability to expatriate
                foreign
                profits to help fund domestic operations;


·
            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 the Company's 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 the Company with such laws and regulations difficult
                and may
                make enforcement of the Company's intellectual property rights more
                difficult; and


·
            fluctuations
                in currency exchange rates, which may affect demand for the Company's
                products and services and may adversely affect the profitability
                in United
                States dollars of services provided by the Company 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
                the
                Company sells, which could have an adverse impact on its earnings
                from
                operations in those countries.





*If
      the Company and/or its product offerings fail to perform effectively on
      installations and other projects, its reputation, and therefore its competitive
      position and financial performance, could be harmed.*





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





*Inability
      to protect intellectual property could harm the Company's 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 the Company's solutions or technologies. The steps the Company
      has
      taken may not prevent misappropriation


-7-
 **Back
          to Table of Contents**




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
      the
      Company's solutions and technologies available to others and harm its
      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. While we are likely to 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. There are
      risks associated with forward-looking statements made by us, and actual results
      may differ.





Some
      of
      the information in this 10KSB contains forward-looking statements that involve
      substantial risks and uncertainties. You can identify these statements by
      forward-looking words such as "may," "will," "expect," "anticipate," "believe,"
      "estimate," "intend" and "continue," or similar words. You should read
      statements that contain these words carefully because they:





*
            discuss
                our future expectations;


*
            contain
                projections of our future results of operations of our financial
                condition; and


*
            state
                other "forward-looking" information.





We
      believe it is important to communicate our expectations. However, there will
      be
      events in the future that we are not able to accurately predict, or over which
      we have little or no control. The risk factors listed in this section, as well
      as any cautionary language in this prospectus, provide examples of risks,
      uncertainties and events that may cause our actual results to differ materially
      from the expectations we describe in our forward-looking statements. You should
      be aware that the occurrence of the events described in these risk factors
      could
      have an adverse effect on our business, results of operations and financial
      condition.





*Due
      to the Company's foreign client installations in Canada, the Caribbean and
      Europe, the Company is exposed to transaction adjustments with respect to
      foreign currency.*





The
      Company's functional currency is the United States dollar. However, the
      Company’s operating subsidiary’s 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. The
      Company believes 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


-8-
 **Back
          to Table of Contents**




currency
      transaction adjustments on the Company's financial position, results of
      operations and cash flows.





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




**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.





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




As
      of
      October 31, 2005, we had exercisable stock options outstanding to purchase
      1,147,564 shares of common stock, warrants to purchase 4,032,661 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
      January 24, 2005, a total of 17,336,681 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.


-9-
 **Back
          to Table of Contents**




*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 primarily
      located in Montreal, Quebec, Canada. We have recently relocated our corporate
      address from Laguna Hills, California, to Dallas, Texas. Superclick, Inc. does
      not own any real property. The following information presents certain
      information about our leased properties:


Approximate
                  Square
              
              Date
                  CurrentLocation
              
              Feet
              
              Expires
              
              Monthly
                  Rent10222
                  Boul. St-Michel
              
              6,750
                  sq. ft.
              
              Sept.
                  30, 2009
              
              US$4,082Suite
                  300Montreal,
                  Quebec H1H 5H1Canada11995
                  El Camino Real
              
              NA
                  - Executive Svc.
              
              Month-to-Month
              
              US$60.00Suite
                  301San
                  Diego, CA 92130




-10-
 **Back
          to Table of Contents**




**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.





**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 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
              
              High2004First
                  Quarter
              
              $
              .20
              
              $
              .51Second
                  Quarter
              
              $
              .26
              
              $
              .97Third
                  Quarter
              
              $
              .58
              
              $
              1.16Fourth
                  Quarter
              
              $
              .58
              
              $
              .852005First
                  Quarter
              
              $
              .75
              
              $
              .93Second
                  Quarter
              
              $
              .75
              
              $
              1.10Third
                  Quarter
              
              $
              .60
              
              $
              1.02Fourth
                  Quarter
              
              $
              .19
              
              $
              .79




-11-


**Back
        to Table of Contents**




On
      January 24, 2006, the closing price was $0.135 for our stock.





**Holders**





There
      are
      approximately sixty-nine record holders of common equity.





**Dividends**





We
      have
      not declared any dividends on our common stock during the last two 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 the Company's 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.





**Equity
      Compensation Plans**





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
      was
      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.





On
      March
      4, 2004, the Company awarded its then CEO, John Glazik, a non-qualified stock
      option to purchase 884,784 shares of common stock of the Company at an exercise
      price of $.50 per share with an expiration date of March 3, 2006. The options
      vest and become exercisable at a rate of 38,866 per month over a twenty-four
      month period. Mr. Glazik’s employment with Superclick ceased on April 28, 2005.
      In accordance with Mr. Glazik’s Separation and Release Agreement with the
      Company dated June 9, 2005, a total of 589,856 shares had vested pursuant to
      Mr.
      Glazik’s Option Agreement. On June 1, 2004, the Company awarded employees
      non


-12-
 **Back
          to Table of Contents**


qualified
      stock options to purchase 720,000 shares of common stock of the Company at
      an
      exercise price of $.50 per share with an expiration date of June 1, 2006. The
      options vest and become exercisable at a rate of 90,000 per quarter over a
      twenty-four month period. On September 1, 2004, the company awarded its then
      CFO, Claude Smith, a non-qualified stock option to purchase 300,000 shares
      of
      common stock of the Company at an exercise price of $0.65 per share with an
      expiration date of August 31, 2006. The options vest and become exercisable
      at a
      rate of 12,500 per month over a twenty-four month period. Mr. Smith’s employment
      with Superclick ceased on April 28, 2005. In accordance with Mr. Smith’s
      Separation and Release Agreement with the Company, dated June 10, 2005, a total
      of 137,500 shares had vested pursuant to Mr. Smith’s Option Agreement.





The
      Company has recorded compensation expense of $398,388 through October 31, 2005
      as the option's prices were less than the fair market value of the Company's
      stock on the award dates. The compensation amount is amortized over the options'
      vesting periods.





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 shall have 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, 2005, the Company awarded 102,067 restricted shares
      of its common stock to directors totaling $77,225.





The
      following table summarizes the Company's stock option activity for the year
      ended October 31, 2005:


-13-
 **Back
          to Table of Contents**
 ****
 2005Weighted
                    AverageShares
                
                Exercise
                    PriceOutstanding
                    at beginning of period
                
                
                1,904,784
                
                $
                0.52Granted
                
                
                125,000
                
                
                0.60Forfeited
                
                
                (457,428
                )
                
                0.54Exercised
                
                
                (111,875
                )
                
                0.50Outstanding
                    at end of year
                
                
                1,460,481
                
                $
                0.52Options
                    exerciseable at year end
                
                
                1,147,564
 **Common
        Stock**





Private
      Placement and Warrant Activity





During
      the year ended October 31, 2004 and pursuant to the September 2003 private
      placement, we issued 1,933,333 shares of restricted common stock in exchange
      for
      $174,000. Attached to each share of restricted common stock were two warrants
      giving the holder the right to purchase common stock; Warrant "A" has an
      exercise price of $0.18 and a three-year life, and Warrant "B" has an exercise
      price of $0.24 and a three-year life. Each warrant has one-for-one rights to
      purchase one share of common stock. The issuance of these securities was exempt
      under section 4(2) of the Securities Act of 1933, as amended as a sale not
      involving a public offering.





During
      the year ended October 31, 2004 and pursuant to the September 2003 private
      placement, 1,933,330 of the series “A” Warrants were exercised at $.18 per
      share, resulting in $348,000 net proceeds to the Company and the issuance of
      1,933,330 restricted common shares.





During
      the quarter ended April 30, 2004 and pursuant to the September 2003 private
      placement 966,665 of series “B” Warrants were exercised at $.24 per share,
      resulting in $232,000 net proceeds to the Company and the issuance of 966,665
      restricted common shares. The shares were issued subsequent to year end and
      were
      classified as stock subscribed in Stockholder’s Equity at October 31, 2004 and
      issued subsequent to that year end. At October 31, 2005 966,665 “B” Warrants
      were unexercised.





As
      of
      October 31, 2004 and commensurate with the April 6, 2004 private placement
      filed
      under Form SB-2 with the SEC on June 8, 2004, the Company issued 1,999,999
      shares of common stock in exchange for gross proceeds of $900,000. Each share
      issued in accordance with the private placement is entitled to one “A” Warrant
      with an exercise price of $0.60 per share.





During
      the year ended October 31, 2005, 100,000 “A” Warrants were exercised resulting
      in gross proceeds of $60,000. 2,099,999 “A” Warrants were unexercised as of
      October 31, 2005.




During
      the quarter ended April 30, 2005 and pursuant to the April 6, 2004 financing,
      which the board had previously in a resolution extended through April 1, 2005,
      the Company issued


-14-
 **Back
          to Table of Contents**




200,000
      shares of Common Stock in exchange for net proceeds of $81,000. Attached to
      this
      issuance were 200,000 Common Stock A Warrants with an exercise price of $0.60
      per share. The Company received aggregate gross proceeds of $990,000 pursuant
      to
      the April 6, 2004 private placement. This private placement was closed effective
      April 1, 2005 and no additional proceeds will be received.




In
      August
      of 2005, we issued $2,250,000 of convertible debentures with 965,997 warrants
      attached (See Note J).





Stock
      issued for Services





During
      the year ended October 31, 2004, the Company issued 621,206 shares of Common
      Stock in exchange for services with a total value of $315,154.





On
      July
      28, 2005, the Company issued 25,000 shares of Common Stock for services from
      Treasury Stock at fair market value of $0.77 per share, or $19,250.





During
      the year ended October 31, 2005 the Company issued 102,067 shares to the members
      of the Board of Directors for services rendered. Total value of the issuances
      is
      $77,225. Value for shares issued for services is based on fair market value
      of
      our stock on the date of issuance.





Stock
      Options





During
      the year ended October 31, 2005, three employees exercised their vested options
      by utilizing the option’s cashless feature whereby the exercise price of the
      common stock received is paid for with a portion of the shares exercised and
      which shares are returned to the company as Treasury Stock in lieu of cash.
      In
      total, 111,875 options were exercised with 51,961 shares of common stock issued
      to the optionees and 58,664 shares of common stock issued in the name of
      Superclick with $25,981 recorded to Treasury Stock.





On
      March
      3, 2005 the Board of Directors increased the employee stock option pool
      established by the employee stock option plan to 3,500,000 from 2,000,000 (See
      Note N).





Acquisition
      of Hotel Net, LLC





On
      July
      21, 2005, the Company issued 1,500,000 shares of Common Stock to the
      shareholders of Hotel Net, LLC pursuant to the July 18, 2005 Letter of Intent.
      The shares were valued at fair market value of $0.64, or $960,000. Also, in
      connection with the purchase of Hotel Net LLC, on September 14, 2005, the
      Company issued 1,250,000 shares of common stock to the shareholders of Hotel
      Net, LLC. The shares were valued at fair market value of $0.55, or
      $687,500.


-15-
 **Back
          to Table of Contents**





**Warrants**




At
      October 31, 2005 the Company had 966,665 "B" Warrants, 2,099,999 "A" Warrants
      and 965,997 warrants related to convertible debentures (See Note J) 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
              
              DateB
              
              
              386,666
              
              $
              0.24
              
              
              9/9/06B
              
              
              193,333
              
              $
              0.24
              
              
              9/29/06B
              
              
              193,333
              
              $
              0.24
              
              
              10/15/06B
              
              
              193,333
              
              $
              0.24
              
              
              10/22/06Subtotal
              
              
              966,665A
              
              
              55,555
              
              $
              0.60
              
              
              4/14/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/19/07A
              
              
              444,444
              
              $
              0.60
              
              
              4/19/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/23/07A
              
              
              200,000
              
              $
              0.60
              
              
              4/29/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/29/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/7/07A
              
              
              200,000
              
              $
              0.60
              
              
              5/10/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/12/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/17/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/24/07A
              
              
              11,000
              
              $
              0.60
              
              
              5/24/07A
              
              
              100,000
              
              $
              0.60
              
              
              6/2/07A
              
              
              100,000
              
              $
              0.60
              
              
              6/16/07A
              
              
              89,000
              
              $
              0.60
              
              
              6/17/07A
              
              
              200,000
              
              $
              0.60
              
              
              3/30/08Subtotal
              
              
              2,099,999Debenture
              
              
              735,370
              
              
              >or=to
                  $0.30
              
              
              7/31/2010Debenture
              
              
              230,627
              
              
              >or=to
                  $0.30
              
              
              8/17/2010Subtotal
              
              
              965,997Total
              
              
              4,032,661


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


-16-
 **Back
          to Table of Contents**




**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 the Company's
      Consolidated Financial Statements and the notes thereto and the other
      information included in this Annual Report on Form 10-K.





**Overview**





The
      Company derives the majority of its revenue from installation of its Superclick
      Internet Access Management System (SIMS) and fees for the maintenance,
      continuing call center support, and improvements to the system. Maintenance
      fees
      are tied to number of rooms served or access points in a client’s facility. Due
      to the Company's reliance on installation and/or retrofit contracts, variations
      in revenue levels may cause fluctuations in quarterly results. Factors such
      as a
      client's commitment to providing internet access to their guests/tenants,
      general economic and industry conditions and other issues could affect the
      Company's revenue and quarterly earnings. Quarterly revenue and earnings of
      the
      Company may also be impacted by the size of individual contracts relative to
      the
      annual revenues of the Company.





In
      addition to its North American operations, the Company has operations 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 the Company's transactions are in
      Canadian dollars; therefore, the Company is exposed to currency fluctuation
      risks.





We
      continue to develop our product offering and IP management solutions, listening
      carefully to our customers. Superclick emerged
      from the development stage during the fiscal year ended October 31, 2005, during
      which substantially all of the Company’s efforts were focused on commercial
      activities.





Here
      are
      some of the other significant milestones achieved during FY 2005:


-17-
 **Back
          to Table of Contents**




·
            The
                number of hotels installed and under contract increased from 116
                to
                approximately 500. This represents an increase of rooms from 20,000
                to
                approximately 80,000 over the year.


·
            Concluded
                the acquisition of HotelNet LLC, adding close to 20,000 rooms to
                our
                footprint.


·
            Concluded
                a round of $2.25 million in gross proceeds of a convertible debenture
                financing with Chicago Venture Partners LP.


·
            Established
                global installations in Romania, the Caribbean and Latin America.




***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. Management bases its 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.





***Revenue
      Recognition***





Revenue
      from the sale of Internet high speed connection equipment is recognized when
      the
      earning process is complete and the risk and rewards of ownership have
      transferred to the customer, which is generally considered to have occurred
      upon
      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, the Company allocates 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. The Company at times may enter into multiple-customer
      contracts in which the Company allocates 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.


-18-
 **Back
          to Table of Contents**





***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 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.





***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. 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 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
      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.





***Deferred
      Taxes***





In
      assessing the realization 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. At October 31, 2004
      a
      valuation


-19-
 **Back
          to Table of Contents**




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 $1,260,923
      for
      the year ended October 31, 2005 assuming a tax rate of 40%.





*United
      States Corporation Income Taxes*





Year
                of Loss
            
            Amount
            
            Expiration
                DateOctober
                31, 2005
            
            $
            4,184,331
            
            
            October
                31, 2025October
                31, 2004
            
            
            898,697
            
            
            October
                31, 2024October
                31, 2003
            
            
            53,638
            
            
            October
                31, 2023December
                31, 2002
            
            
            80,395
            
            
            December
                31, 2022December
                31, 2001
            
            
            91,564
            
            
            December
                31, 2021December
                31, 2000
            
            
            88,027
            
            
            December
                31, 2020December
                31, 1999
            
            
            18,936
            
            
            December
                31, 2019$
            5,415,588





The
      expiration dates for U.S. net operating losses may be extendable under Section
      381 of the U.S. Internal Revenue Code. After reorganization or other change
      in
      corporate ownership, the use of certain carry forwards may be limited or
      prohibited. After an ownership change, the amount of income that a corporation
      may offset each year by preacquisition NOL carry forwards is generally limited
      to an amount determined by multiplying the value of the equity of the
      corporation just prior to the ownership change by the federal long-term
      tax-exempt rate in effect on the date of the change. Any unused limitation
      may
      be carried forward and added to the next year's limitation. The annual
      limitation is approximately $44,000.





*Canadian
      Income Taxes (Stated in CDN$)*





Year
                of Loss
            
            Amount
            
            Expiration
                DateOctober
                31, 2005
            
            $
            678,878
            
            
            October
                31, 2012October
                31, 2004
            
            
            151,332
            
            
            October
                31, 2011October
                31, 2003
            
            
            5,322
            
            
            October
                31, 2010October
                31, 2002
            
            
            350,910
            
            
            October
                31, 2009October
                31, 2001
            
            
            24,879
            
            
            October
                31, 2008$
            1,211,321





At
      October 31, 2005 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.




For
      the
      year ended October 31, 2004 the Company recognized $47,697 as receivable for
      research and development and accrued $35,432 as a deferred tax benefit created
      by research and development activities that occurred during the fiscal year
      then
      ended. No valuation allowance was recorded in connection with the deferred
      tax
      benefit, generated during the year ended


-20-
 **Back
          to Table of Contents**




October
      31, 2004, as it was the opinion of management that they would have the ability
      to utilize it in the future.





The
      Company performs research and development on an on-going basis, which is
      available for refund or future tax credits in Canada. Due to the recurring
      losses of the Company during the year ended October 31, 2005, management
      recognized an allowance for the full amount it anticipated to generate in
      connection with the research and development deferred tax benefit.


We
      recognized a receivable of $70,766 CDN for the research and development
      activities in 2005.





**Results
      of Operations**





**Twelve
      Months Ended October 31, 2005 And 2004**





***Revenue***





During
      the twelve months ended October 31, 2005 the Company had revenue of $3,205,696
      compared to $2,552,739  for
      the
      twelve months ended October 31, 2004. The increase in
      net
      sales was the result of the acquisition of Superclick Networks, Inc., the
      validation of the Company’s products and the subsequent demand from customers.
      We completed several major contracts in 2005 that were not in place in 2004.




***Gross
      Profit***





Gross
      profit for the twelve months ended October 31, 2005 and 2004 was $810,181 and
      $710,008, respectively. Improvement in annual gross profit is possible through
      development of better buying channel partnerships. Most externally purchased
      networking equipment is acquired from resellers whose markup may be recovered
      if
      the Company establishes distribution channel partnerships.





***Selling,
      General and Administrative***





For
      the
      twelve months ended October 31, 2005 and 2004, general and administrative
      expense was $2,616,973 and $1,633,810, respectively. The twelve month
      year-over-year increase of $983,163 was primarily due to the acquisition of
      Hotel Net, LLC and increases in operating expenses related therein in addition
      to increased salaries related to increased headcount.





Net
      loss
      before extraordinary item for the twelve months ended October 31, 2005 and
      2004
      was $1,836,725 and $979,395, respectively. The twelve month year-over-year
      increase in net loss before extraordinary items was $857,330 and primarily
      due
      to the acquisition of Hotel Net, LLC and increased salaries.





Net
      loss
      after extraordinary items for the twelve months ended October 31, 2005 and
      2004
      was $4,284,225 and $979,395, respectively. The extraordinary loss of $2,447,500
      represents the complete write down of the Company’s investment and goodwill in
      Hotel Net, LLC as a result of


-21-
 **Back
          to Table of Contents**




eliminating
      the Hotel Net LLC trade name, closure of the Hotel Net LLC facility, the
      precipitous drop in the price of Superlick, Inc. stock price from the
      transaction price levels of $0.64 and $0.55 to the current level of
      approximately $0.10 per share and significantly lower revenues than expected
      for
      the final two months of the year and which are not expected to materialize
      to a
      degree sufficient enough to warrant the existence of a related goodwill balance.





**Research
      and Development**





For
      the
      twelve months ended October 31, 2005 and 2004, research and development expense
      was $151,822 and $136,610, respectively. The twelve month year-over-year
      increase in research and development expense is attributable to the ongoing
      development and enhancement of the Company’s products to meet evolving customer
      and market demands.





**Other
      Income and Expense**





Interest
      expense for the twelve months ended October 31, 2005 and 2004 was $48,513 and
      $2,112, respectively. The twelve month year-over-year increase is due to the
      actual interest due to the holders of our convertible debentures





With
      respect to the convertible debentures, during the year ended October 31, 2005,
      the Company recognized non-cash amortization expense related to the beneficial
      conversion feature, deferred financing costs and warrant discount in the amount
      of $97,632, $53,750 and $143,990, respectively. In addition, the Company
      recognized a derivative gain related to the warrants which were issued in
      connection with the convertible debentures in the amount of $465,774. No such
      income and expense was incurred in 2004. See Note J to the financial statements.





**FINANCIAL
      CONDITION**





From
      inception to October 31, 2005, we incurred an accumulated deficit of $5,640,500,
      and we expect to incur additional losses for the foreseeable future. This loss
      has been incurred through a combination of professional fees and expenses
      supporting our plans to acquire synergistic businesses as well as continued
      losses of the operating subsidiary.





We
      have
      financed our operations since inception primarily through equity financing.
      During the twelve months ended October 31, 2005, we had a net increase in cash
      of $21,959. Total cash resources as of October 31, 2005 was $497,438 compared
      with $475,479 at October 31, 2004.





Our
      available working capital and capital requirements will depend upon numerous
      factors, including progress in our distribution and sales 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


-22-
 **Back
          to Table of Contents**




ability
      to establish collaborative arrangements with other organizations, our ability
      to
      attract and retain key employees and our need to purchase additional capital
      equipment.





***The
      Company's Liquidity Plan***





Recent
      operating results give rise to concerns about the Company's ability to generate
      cash flow from operations sufficient to sustain ongoing viability. Net loss
      for
      the year ended October 31, 2005 was $4,284,225, while cash used for operations
      was $1,838,615.





During
      the year ended October 31, 2005, 100,000 of the series “A” Warrants were
      exercised at $.60 per share, resulting in $60,000 net proceeds to the Company
      and the issuance of 60,000 restricted common shares.





During
      the year ended October 31, 2005, 200,000 of the series “A” Warrants were
      exercised at $.45 per share, resulting in $90,000 net proceeds to the Company
      and the issuance of 200,000 restricted common shares.





966,668
      “B” Warrants were unexercised as of October 31.





During
      the year ended October 31, 2005, the Company issued 127,067 shares of Common
      Stock in exchange for services with a total value of $96,475.





Our
      independent registered public accountants, Bedinger and Company have indicated
      that, based on the Company’s financial statements, the Company will continue as
      a going concern. Moreover, Bedinger and Company has noted that the Company
      has
      suffered recurring losses from operations that raises substantial doubt about
      its ability to continue as a going concern.





Management
      is currently in the process of seeking additional equity financing with
      potential investors. 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.





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


-23-
 **Back
          to Table of Contents**




***Off-Balance
      Sheet Arrangements***




At
      October 31, 2005 the Company had no obligations that would qualify to be
      disclosed as off-balance sheet arrangements.





***Contractual
      Obligations***





*Capital
      lease obligations:* Capital
      lease obligations relate to a copy machine used in the Company's Montréal
      office.





*Operating
      lease obligations:* Operating
      lease obligations consist of office rental commitment for the Company's offices
      in Montréal, Québec, Canada. On October 1, 2004 the Company began a lease for
      office space in Montréal. The lease extends through September 30, 2009 at a rate
      of $4,082 per month.


The
      Company has also entered into non-cancelable operating leases for office
      equipment, computers. At October 31, 2005, our contractual obligations under
      these leases and other commitments were as follows:





Year
                Ended October 31,2006
            
            
            55,4842007
            
            
            55,0112008
            
            
            52,9372009
            
            
            48,5252010
            
            
            n/a$
            211,957





***Inflation***





Although
      the operations of the Company are influenced by general economic conditions,
      the
      Company does not believe inflation had a material effect on the results of
      operations during the year ended October 31, 2005. However, there can be no
      assurance the Company's business will not be affected by inflation in the
      future.




***Private
      Placement of Convertible Debt***





On
      August
      1, 2005, the Company completed a private placement of convertible debentures
      generating gross proceeds of $1.75 million and the issuance of warrants to
      purchase 735,370 shares of the Company’s common stock. On August 18, 2005, the
      Company completed a private placement of convertible debentures generating
      gross
      proceeds of $0.5 million and the issuance of warrants to purchase 230,627 shares
      of the Company’s common stock. In total, the Company received $2.035 of net
      proceeds and issued 965,997 warrants. Third party fees totaled $215,000, which
      were paid in cash.





The
      terms
      of the warrants and debentures are substantially the same. The exercise price
      of
      the warrants is calculated the same as for the conversion price of the
      convertible debentures


-24-
 **Back
          to Table of Contents**




described
      below. The warrants and debentures are immediately exercisable. The debentures
      bear interest of 9%, payable quarterly at the option of the Company in cash
      or
      stock. The interest Rate adjusts to 12% at maturity, or twelve months from
      the
      closing date.





Prior
      to
      maturity, the debentures and warrants are convertible into the Company's common
      stock at a conversion price equal to 70% of the average closing bid price of
      the
      Company's common stock for the 45 trading days preceding a conversion date.
      If
      the closing bid price for the stock is less than $0.50 on a day on which the
      Investor converts, then during that calendar month the Investor will only be
      permitted to convert principal and interest in an aggregate amount of up to
      $175,000. This $175,000 limitation would not apply in the event that the closing
      bid price on such conversion date is at least 150% of the average closing bid
      price for the ten trading days immediately prior to such conversion.
      Notwithstanding the foregoing, the Conversion Price during the pre-maturity
      period shall not be less than $.30 per share. After maturity, 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.





Cash
      settlement of the unexercised portion of the debenture is required. If a cash
      settlement of the outstanding debt is not made in accordance with the debenture
      agreement on the maturity date, then a ten (10%) percent penalty of the
      outstanding debt balance will be added to the debt balance.





The
      debentures provide that the holders of may only convert the debenture if the
      number of shares held by the lender or its affiliates after conversion would
      not
      exceed 4.99% of the outstanding shares of the Company's common stock following
      such conversion.





In
      connection with the transaction, we entered into a registration rights
      agreement. Pursuant to the terms of the Registration Rights Agreement, within
      thirty calendar days following the initial closing date, or September 1, 2005,
      the Company was required to file with the Securities and Exchange Commission
      a
      registration statement under the Securities Act of 1933, as amended, covering
      the resale of all of the common stock the convertible debenture would be
      converted into which is at least equal to two hundred percent (200%) of the
      number of shares into which the Debentures and all interest thereon through
      the
      second anniversary of the initial closing date would be convertible based on
      an
      assumed Conversion Price of $0.30 per share and the common stock underlying
      the
      warrants.





The
      Registration Rights Agreement further provides that if a registration statement
      is not filed, or does not become effective, within 100 days from the initial
      closing date, then in addition to any other rights the holders may have, the
      Company would be required to pay each holder an amount in cash, as liquidated
      damages, equal to an aggregate five percent (5%) of the purchase price of the
      debentures (2% for days 1-30, plus 2% for days 31-60, plus 1% for days 61-75).
      We filed an SB-2 with the SEC on September 15, 2005 effectively registering
      19,215,997 shares of common stock of which 18,150,000 relates to the conversion
      of principle and interest of the convertible debenture and 965,997 relates
      to
      the exercise of warrants issued in connection with the


-25-
 **Back
          to Table of Contents**




convertible
      debenture. The SEC declared the registration of shares underlying the debentures
      effective within the allowed time on December 12, 2005.





The
      issuance costs related to the convertible debentures of approximately $215,000
      in cash were capitalized and are being amortized over the life of the debt.





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 since the warrants contain registration
      rights where significant liquidated damages would be required to be paid to
      the
      holder in the event the Company failed to receive an effective registration,
      and
      the cashless exercise feature of the warrants and variable exercise price which
      support the notion of net-cash settlement and treatment of the warrants as
      a
      liability. The initial value of the warrants was treated as a discount to the
      debenture and recorded as a liability. The Company calculated the initial value
      of the warrants on the closing date of the transactions as being $658,973 as
      determined using a Black-Scholes option pricing model with the following
      assumptions: expected term 5 years, exercise price $.5949, volatility 175%,
      risk
      free rate 4.32%, and zero dividend yield. 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 have a
      value
      of $193,199 at October 31, 2005 and the company recognized a derivative gain
      of
      $465,774 from the initial value date to October 31, 2005. The initial discount
      of $658,973 to the debenture will be amortized over the term of the debenture,
      or twelve (12) months and calculated based upon the effective interest method.
      During the year ended October 31, 2005, the Company recognized $143,990 in
      non-cash interest expense related to the warrant discount.





The
      Company determined that the $1.75 million debenture was issued with a beneficial
      conversion feature (“BCF”) due to the conversion price ($.5949) being less than
      the closing stock price ($.79) on the date of issuance, and the conversion
      feature being in-the-money. Conversely, on the issuance date of the $0.5 million
      debenture the conversion feature was not in-the-money and no BCF was recognized.
      Thus, pursuant to EITF 00-27, 27, Application of Issue No. 98-5 to Certain
      Convertible Instruments, the BCF has been determined based on the gross
      debenture amount less the portion attributable to the warrants described above,
      and recorded as a discount to reduce the carry value of the debenture and
      increase additional-paid-in-capital at its fair value of $390,529 on the date
      of
      issuance as determined using the intrinsic value method. The discount will
      be
      amortized to interest expense over the life of the debenture. The company has
      recognized $65,088 in non-cash interest expense attributable to the amortization
      of this discount through October 31, 2005.


-26-
 **Back
          to Table of Contents**





**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.





**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 Acting President and Acting Chief Financial Officer (who is the
      principal accounting officer), both of whom were appointed in the interim
      capacity in April, 2005, to evaluate the effectiveness of the Company’s
      disclosure controls and procedures as of the end of the period covered by this
      report. Based on the foregoing, it was determined that our internal controls
      over the revenue recognition of our accounting staff with respect to revenue
      recognition in conjunction with service contract revenue was deficient.
      Specifically, the deferral and amortization over the life of a contract was
      not
      performed. In addition, we identified that certain issued and outstanding
      options that permit “cashless exercise” should be subject to variable plan
      accounting treatment under applicable accounting standards. Accordingly,
      previously unrecognized compensation expense needed to be recognized as
      compensation expense in our previously issued financial statements under the
      Financial Accounting Standards Board’s Interpretation 44, “Accounting for
      Certain Transactions involving Stock Compensation - an interpretation of APB
      Opinion No. 25” (Issue Date 3/00). See Note N to Notes to Financial Statements
      commencing at Page F-24 of this report.





Our
      President and then interim Principal Financial Officer also identified certain
      additional deficiencies in the second quarter of the Company’s 2005 fiscal year,
      including a lack of an appropriately rigorous system of policies and procedures
      for the internal review of financial reports, including inadequate staffing,
      training and expertise and improper accounting procedures for grants with
“cashless exercise” provisions per Financial Accounting Standards Board’s
      Interpretation 44, “Accounting for Certain Transactions involving Stock
      Compensation - an interpretation of APB Opinion No. 25”. Our independent
      registered public accountants, Bedinger and Company have indicated that they
      considered these deficiencies to be material weaknesses as that term is defined
      under standards established by the Public Company Accounting Oversight Board
      (United States). These material weaknesses included the following: the
      ineffectiveness of a rule compliance checking procedure for SEC
      filings.


-27-
 **Back
          to Table of Contents**




In
      light
      of the need for a restatement and the material weaknesses in our internal
      controls, commencing in the third quarter of our 2005 fiscal year, we undertook
      a review of our disclosure, financial information and internal controls and
      procedures. The review included our efforts by our management and directors,
      as
      well as the use of additional outside resources. We are committed to addressing
      our control environment and reporting procedures.





(b)
            Changes
                in internal controls




Subsequent
      to the date of the evaluation referenced above, the Company recognized certain
      material weaknesses in its internal controls and procedures:




·
            Lack
                of appropriately rigorous system of policies and procedures for the
                internal review of financial reports, including inadequate staffing,
                training and expertise.


·
            Improper
                accounting procedures for grants with “cashless” exercise provisions for
                Financial Accounting Standards Board’s Interpretation 44, “Accounting for
                Certain Transactions involving Stock Compensation - an interpretation
                of
                APB Opinion No. 25”.




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 quarter
      covered by this Form 10-KSB.





We
      have
      rescinded our cashless exercise provision for all outstanding option grants
      pursuant to a resolution adopted by the Board of Directors of the Company on
      June 1, 2005. Thus we expect that variable accounting will no longer be required
      after the end of the Company’s fiscal quarter ended July 31, 2005.





(c)
            Restatement





In
      July,
      2006 we discovered that the initiation of amortization related to the warrant
      discount of $658,973 (See NOTE J) was missed. As a result, the Company reacted
      by correcting the accounting treatment and restating (1) Form 10-KSB for the
      year ended October 31, 2005, (2) Form 10-QSB for the three months ended January
      31, 2006, and (3) Form 10-QSB for the three and six months ended April 30,
      2006.


-28-
 **Back
          to Table of Contents**




**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, 2005, our
      executive officers, directors and key employees, their positions and their
      ages
      are as follows:





DIRECTORS
      AND EXECUTIVE OFFICERS




Name
            
            Age
            
            PositionSandro
                Natale
            
            37
            
            CEO,
                President and DirectorTodd
                M. Pitcher
            
            37
            
            Chairman
                of the BoardJacobo
                Melcer
            
            66
            
            DirectorPaul
                Gulyas
            
            48
            
            DirectorGeorge
                Vesnaver
            
            48
            
            DirectorDipan
                Patel
            
            39
            
            DirectorChirag
                Patel
            
            38
            
            Director




**EXECUTIVE
      OFFICERS AND DIRECTORS**





SANDRO
      NATALE 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 holds a degree in Computer Science from Dawson College.





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. Prior
      to
      the merger, Mr. Pitcher served as President, Chief Executive Officer and Chief
      Financial Officer of Grand Prix Sports, Inc. since January 2003. Mr. Pitcher
      has
      also served in the Executive Management in an interim capacity 4Dcard, Inc.
      from
      March 2002 through July 2003. Mr. Pitcher has several years experience in
      the


-29-
 **Back
          to Table of Contents**




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.





GEORGE
      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.





JACOBO
      MELCER has been a Director of our company since January 2004. Mr. Melcer is
      also
      Chairman and President of Frontcom.com, Inc., a provider of broadband services
      for Mexico/US border towns. He is the founder and serves as a Director of CPM
      Electronics Inc., a leading distributor of telecommunications and electronics
      products in Latin America. Mr. Melcer is also Founder of Grupo MEXEL, Mexico's
      leading high technology integrator for the last 30 years. In addition, Mr.
      Melcer is a founder of ACT Networks, a publicly traded U.S. company that is
      a
      world-leader in frame-relay technology and has served on ACT's Board of
      Directors through the public offering. Mr. Melcer holds a degree in Physics
      from
      the Universidad National Autonoma de Mexico (UNAM) with a Masters Degree in
      Oceanography.





PAUL
      GULYAS **,** age 48 -
      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.





CHIRAG
      PATEL ,
      age 38
      - Chirag Patel has more than 14 years experience in Information Technology
      and
      its applications, as well as in finance and management. He co-founded Veriprise
      Wireless Corporation in 1999, which extends corporate applications to its mobile
      employees via handheld devices. During his tenure with Veriprise Chirag helped
      raise $9 million dollars to fund the company wherein he developed and
      implemented the company's marketing strategies resulting in partnerships with
      Northwestern Mutual, Proctor & Gamble, Lotus, Motorola,
      PriceWaterhouseCoopers, Siebel, AT&T Wireless and Verizon Wireless. In
      addition he worked with the Motorola global teams to jointly penetrate the
      markets in South America and India.





DIPAN
      PATEL ,
      age 39
      - Dipan Patel has sixteen years of experience in the Hotel industry and has
      worked in operations, franchising and real estate investment sales. His strong
      relationships and rich experience in the hospitality industry has made him
      instrumental in developing Hotel Net's fast growing footprint in the United
      States. Currently, he is a Senior Vice President at CB


-30-
 **Back
          to Table of Contents**




Richard
      Ellis, a leading commercial real estate brokerage firm, and represents the
      Southeast Hotel Investment Sales Group. During his career he has completed
      over
      120 transactions and has been awarded Broker of the year in 2001 for the
      Hospitality Investment Sales and was the leading investment sales broker for
      CB
      in the Southeast in 2002. He continues to enjoy strong success in the
      transaction business and has represented several major national hotel clients.
      Prior to hotel investment sales he worked with Cendant and Days Inn in a
      Franchise Sales capacity.





**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, 2005.




**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 2005 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 2005.




**SUMMARY
                  COMPENSATION TABLE**Long
                  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
                  Natale, CEO
              2005
                2004
                2003
              $141,391
                $75,000
                $42,000
              --
                --
                --
              --
                --
                --
              --
                --
                --
              --
                --
                --
              --
                --
                --
              --
                --
                --John
                  Glazik, former CEO
              2005
                2004
                2003
              --
                $90,000
                --
              --
                $10,000
                --
              --
                --
                --
              --
                --
                --
              --
                884,784
                ---
              --
                --
                --
              --
                --
                --




-31-
 **Back
          to Table of Contents**




**OPTIONS
      AND STOCK APPRECIATION RIGHTS**





On
      December 8, 2004, the Company awarded employees non-qualified stock options
      to
      purchase 125,000 shares of common stock of the Company at an exercise price
      of
      $.60 per share with an expiration date of December 8, 2010. The options vest
      and
      become exercisable at a rate of 15,625 per quarter over a twenty-four month
      period.





The
      Company has recorded compensation expense of $398,388 through October 31, 2005
      as the option's prices were less than the fair market value of the Company's
      stock on the award dates. The compensation amount is amortized over the options'
      vesting periods.





**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**





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 2,000,000. 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 shall have 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.


-32-
 **Back
          to Table of Contents**




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.





*Stock
      Option Plan*





We
      currently do not have any stock option plan for executive officers in place.




**Option
      Grants In Last Fiscal Year**





We
      did
      not grant any stock options to executive officers.




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





During
      the year 111,875 common stock options were exercised. As of October 31, 2005,
      the Company had 1,460,481 outstanding options with 1,147,564 exercisable. The
      value to the company of the exercisable warrants based on the weighted average
      strike price of $0.52 is approximately $596,733. However, as these options
      are
      underwater, the company does not think it likely they will be exercised.




**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 rewards 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.





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


-33-
 **Back
          to Table of Contents**




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 three executive officers.
      Below is a summary of the major terms of these employment agreements.





**EMPLOYMENT
      AGREEMENTS**





SANDRO
      NATALE - Upon completion of the merger transaction with Superclick Networks,
      Inc. on October 7, 2003, Sandro Natale was appointed VP of Business Development.
      Mr. Natale's employment with us is governed by an employment agreement
      originally entered into between he and Superclick Networks, Inc., which we
      assumed following the merger. The agreement provides for term of employment
      that
      may be extended for additional one (1) year periods thereafter. Mr. Natale
      was
      entitled to receive a base salary equal to CDN $120,000.





**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, 2005, 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 11995 El Camino Real, Suite 301,
      San
      Diego CA 92130.


-34-
 **Back
          to Table of Contents**


**Name**
            
            **Shares**
              **Beneficially
                Owned**
            
            **Percent
                of Class**Sandro
                Natale
            
            
            3,526,100
            
            
            12.30
            %Todd
                M. Pitcher
            
            
            21,487
            
            
            *Jacobo
                Melcer
            
            
            116,567
            
            
            *George
                Vesnaver
            
            
            86,091
            
            
            *Paul
                Gulyas
            
            
            62,991
            
            
            *Chirag
                Patel
            
            
            596,251
            
            
            2.07
            %Bella
                Investments LLC**
            
            
            704,624
            
            
            2.45
            %All
                Officers and Directors as a Group
            
            
            5,114,111
            
            
            17.83
            %





(*)
            means
                less than 1.0%


(**)
            Dipan
                Patel is the sole beneficial owner of Bella Investments
                LLC





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS**





Mr.
      Pitcher, Chairman of our company, provides consulting services to us in exchange
      for monthly compensation of $2,500 and related expenses. Mr. Pitcher is also
      President of Comprehensive Communications LLC who provides the Company with
      investor relations support primarily in the form of press releases.





SNI
      currently leases office space on a month-to-month basis from a relative of
      a
      director and shareholder at (C$1,450) $1,006 per month. SNI has also entered
      into non-cancelable operating lease for office equipment and computers at
      monthly payments of (C$346) $228. Future lease payments under this operating
      lease are as follows:




Year
                  Ended October 31,2006
              
              
              473





The
      Company's SNI subsidiary incurred $59,232 in rent expense during the twelve
      months ended October 31, 2005.


-35-
 **Back
          to Table of Contents**




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




(a)
            Exhibits




Financial
                StatementsINDEPENDENT
                AUDITORS REPORT
            F-1CONSOLIDATED
                FINANCIAL STATEMENTSConsolidated
                Balance Sheet
            F-3Consolidated
                Statements of Operations
            F-4Consolidated
                Statements of Stockholders' Equity
            F-5Consolidated
                Statements of Comprehensive Income
            F-6Consolidated
                Statements of Cash Flow
            F-7Supplemental
                Schedule of Business Acquired
            F-8Notes
                to Consolidated Financial Statements
            F-9




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:




2.1
            Acquisition
                Agreement, dated as of October 7, 2003 by and between Superclick,
                Inc. and
                Superclick Networks, Inc. (Incorporated by reference with the Company's
                Form 8-K filed on October 10, 2003)





2.2
            Financial
                statements of acquired company, Superclick Networks, Inc. dated as
                of
                October 10, 2003 (Incorporated by reference with the Company's Form
                8-K/A
                filed on June 3, 2004).





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).




-36-
 **Back
          to Table of Contents**




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.





4.1
            Specimen
                Share of Common Stock. (Incorporated by reference filed with the
                Company's
                Form S-1 on February 28, 2000)





5.1
            Opinion
                re: Legality.*





10.1
            Agreement
                between DDR Systems, Inc. and Reach Technologies Inc. dated June
                3, 1999
                for the right to distribute the Reach Technologies Inc. licensed
                product
                line. (Incorporated by reference filed with the Company's Form S-1
                on
                February 28, 2000).





10.2
            Subscription
                Agreement and Investment Letter re: Gauntlett Limited (Incorporated
                by
                reference filed with the Company's Form S-1/A on April 27,
                2000).





10.3
            Subscription
                Agreement and Investment Letter re: World Wise Traders Limited
                (Incorporated by reference filed with the Company's Form S-1/A on
                April
                22, 2000).





10.4
            Subscription
                Agreement and Investment Letter re: Green Grove Trading Limited
                (Incorporated by reference filed with the Company's Form S-1/A on
                April
                22, 2000).





10.5
            Subscription
                Agreement and Investment Letter re: Valonia Limited (Incorporated
                by
                reference filed with the Company's Form S-1/A on April 22,
                2000).





10.6
            Agreement
                between DDR Systems, Inc. and Reach Technologies Inc. dated January
                14,
                2001 amending the Licensing Agreement with Reach Technologies, Inc.
                dated
                June 3, 1999 as it pertains to minimum purchase requirements.
                (Incorporated by reference filed with the Company's Form 10-KSB on
                March
                15, 2001).





10.7
            Agreement
                between DDR Systems, Inc. and Reach Technologies, Inc., dated March
                9,
                2001, amending the Licensing Agreement with Reach Technologies, Inc.
                dated
                June 3, 1999, to amend the Registrant's commitment to purchase equipment
                and to transform the status of the license from exclusive to
                non-exclusive.(Incorporated by reference filed with the Company's
                Form 8-K
                on April 5, 2001).





10.8
            Agreement
                and Plan of Share Exchange by and between the Stockholders of Nordic
                Racing Limited and DDR Systems, Inc., dated March 9, 2001. (Incorporated
                by reference filed with the Company's Form 8-K on April 5,
                2001).




-37-
 **Back
          to Table of Contents**




10.9
            Letter
                of Intent Grand Prix Sports, Inc. and IFT International, Inc. dated
                November 5, 2001 (Incorporated by reference filed with the Company's
                Form
                10-QSB on November 19, 2001).





10.10
            Corvus
                Agreement dated May 23, 2002 (Incorporated by reference filed with
                the
                Company's Form 10-QSB on August 15, 2002 as Exhibit
                10.1).





10.11
            Stock
                Purchase Agreement dated October 11, 2002 by and between Grand Prix
                Sports, Inc. and Bertram Schafer Racing GmbH (Incorporated by reference
                filed with the Company's Form 10-QSB on December 17, 2002 as Exhibit
                10.1).





10.12
            Interim
                CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002 for the Quarter ended September 30, 2002 (Incorporated
                by
                reference filed with the Company's Form 10-QSB on December 17, 2002
                as
                Exhibit 99.1).





10.13
            Letter
                of Debt Forgiveness to Grand Prix Sports (Incorporated by reference
                filed
                with the Company's Form 10-KSB on April 15, 2003 as Note
                F).





10.14
            Employment
                Agreement dated March 3, 2004 between the registrant and John Glazik,
                incorporated by reference filed with the Company's Form 10-QSB on
                March
                19, 2004.





10.15
            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)





10.16
            Verizon
                Agreement (Incorporated by reference filed with the Company's Form
                8-K on
                May 7, 2004).





10.17
            Employment
                Agreement dated August 31, 2004 (Incorporated by reference filed
                with the
                Company's Form 8-K on September 2,
                2004).





10.18
            Locatel
                Agreement (Incorporated by reference filed with the Company's Form
                8-K on
                December 12, 2004).





17.1
            Resignation
                of Ron Fon as Director (Incorporated by reference filed with the
                Company's
                Form 8-K on August, 9, 2004).





23.1
            Consent
                of Independent Public Accountant, dated July 15,
                2004*





*
            Previously
                filed





31.1
            Rule
                13a-15(e)/15d-15(e) Certification


32.1
            Section
                1350 Certification




-38-
 **Back
          to Table of Contents**




99.1
            Private
                Placement of Securities, dated April 6, 2004 (Incorporated by reference
                filed with the Company's Form 8-K on May 7,
                2004.





99.2
            Results
                of Operations for Quarter ended July 31, 2004 (Incorporated by reference
                filed with the Company's Form 8-K on September 13,
                2004).





99.3
            Revision
                of Fiscal 2004 Guidance as of October 14, 2004 (Incorporated by reference
                filed with the Company's Form 8-K on October 14,
                2004).





**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 2005 were $112,970. Additionally, Bedinger & Company has charged $7,200 for tax preparation
      services for fiscal year 2005.








(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 2004.




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





Not
      applicable.


-39-
 **Back
          to Table of Contents**




**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:
      February 10, 2006


SUPERCLICK,
      INC.






By: 
      /s/ Sandro Natale


Sandro
      Natale


Chief
      Executive Officer





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 Officer
              
              February
                  10, 2006Sandro
                  Natale/s/
                  Todd M. Pitcher
              
              Interim
                  Chief Financial Officer and
              
              February
                  10, 2006Todd
                  M. Pitcher
              
              Principle
                  Accounting OfficerBOARD
                  OF DIRECTORS/s/
                  Todd M. Pitcher
              
              Chairman
              
              February
                  10, 2006Todd
                  M. Pitcher/s/
                  Sandro Natale
              
              Director
              
              February
                  10, 2006Sandro
                  Natale/s/Jacobo
                  Melcer
              
              Director
              
              February
                  10, 2006Jacobo
                  Melcer/s/
                  Paul Gulyas
              
              Director
              
              February
                  10, 2006Paul
                  Gulyas/s/
                  Chirag Patel
              
              Director
              
              February
                  10, 2006Chirag
                  Patel/s/
                  George Vesnaver
              
              Director
              
              February
                  10, 2006George
                  Vesnaver/s/
                  Dipan Patel
              
              Director
              
              February
                  10, 2006Dipan
                  Patel




-40-
 **Back
          to Table of Contents**




**SUPERCLICK,
      INC.**





**REPORT
      ON AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS**





**YEARS
      ENDED OCTOBER 31, 2005 (Restated) AND 2004**




**Back
          to Table of Contents**




CONTENTS




*PAGE*Report
                  of Independent Registered Public Accounting Firm
              F-1-2FINANCIAL
                  STATEMENTSConsolidated
                  Balance Sheet
              F-3Consolidated
                  Statements of Operations and Accumulated Deficit
              F-4Consolidated
                  Statement of Stockholders’ Equity
              F-5Consolidated
                  Statements of Comprehensive Income (Loss)
              F-6Consolidated
                  Statements of Cash Flows
              F-7Supplemental
                  Schedule of Business Acquired
              F-8Notes
                  to the Financial Statements
              F-9-46




**Back
          to Table of Contents**




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, 2005 and the related consolidated statements of
      operations, stockholders’ equity (deficit), comprehensive income (loss), and
      cash flows for the years ended October 31, 2005 and October 31, 2004. These
      financial statements are the responsibility of the Company's management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our 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, 2005 and the related consolidated statements
      of operations, stockholders’ equity (deficit), comprehensive income (loss), and
      cash flows for the years ended October 31, 2005 and October 31, 2004, in
      conformity with accounting principles generally accepted in the United States
      of
      America.








Board
      of
      Directors


Superclick,
      Inc.


Page
      Two


F-1
 **Back
          to Table of Contents**




The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. However, the Company has suffered recurring
      losses from operations that raises substantial doubt about its ability to
      continue as a going concern. Management plans in regards to these matters are
      also described in Note J. The financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.








/s/
      Bedinger & Company


Certified
      Public Accountants


Concord,
      California


December
      15, 2005


(Except
      for Note T, which is


August
      18, 2006)


F-2
 **Back
          to Table of Contents**




**SUPERCLICK,
                  INC.**Consolidated
                  Balance SheetOctober
                  31, 2005 (Restated)October
                  31,ASSETS
              
              2005(Restated)CURRENT
                  ASSETSCash
              
              $
              497,438Accounts
                  receivable, net (Note A)
              
              
              813,196R&D
                  Tax credits receivable
              
              
              120,104Sales
                  Tax refund receivable
              
              
              55,210Inventory
                  (Note B)
              
              
              111,232Deferred
                  financing costs (Note C)
              
              
              161,250Prepaid
                  expenses
              
              
              37,956TOTAL
                  CURRENT ASSETS
              
              
              1,796,386Fixed
                  assets (Note D)Cost
              
              
              431,405Accumulated
                  Depreciation
              
              
              (119,190
              )Net
              
              
              312,215Deferred
                  Tax Benefit (Note E)
              
              
              34,411Other
                  Assets
              
              
              2,123TOTAL
                  ASSETS
              
              $
              2,145,135LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable (Note F)
              
              $
              824,623Accrued
                  payroll
              
              
              53,317Accrued
                  other
              
              
              24,113Deferred
                  revenue (Note G)
              
              
              137,792Loans
                  current portion (Note H)
              
              
              9,465Notes
                  payable to former shareholders of Hotel Net, LLC (Note
                  I)
              
              
              350,000Convertible
                  debentures, net (Note J)
              
              
              1,442,120Debenture
                  warrants (Note J)
              
              
              193,199TOTAL
                  CURRENT LIABILITIES
              
              
              3,034,629Loans
                  noncurrent portion
              
              
              36,473TOTAL
                  LIABILITIES
              
              
              3,071,102COMMITMENTS
                  AND CONTINGENCIES (Note Q)STOCKHOLDERS'
                  EQUITY (Note L)Preferred
                  stock, par value $.0001; 20,000,000shares
                  authorized; 0 issued and outstanding
              
              
              —Common
                  stock, par value $.0006, 121,000,000 shares authorized; issued
                  and
                  outstanding 28,479,570 at October 31, 2005
              
              
              17,035Additional
                  paid-in capital
              
              
              4,646,360Accumulated
                  deficit
              
              
              (5,640,500
              )Accumulated
                  other comprehensive gain (loss)(Cumulative
                  translation adjustment)
              
              
              66,278Treasury
                  Stock
              
              
              (15,140
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              (925,967
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              2,145,135




F-3
 **Back
          to Table of Contents**




**SUPERCLICK,
                INC.**Consolidated
                Statements of OperationsFor
                the Years Ended October 31, 2005 (Restated) and 2004Year
                Ended October 31,2005
            
            2004(Restated)RevenueNet
                Sales
            
            $
            2,408,072
            
            $
            2,331,811Services
            
            
            797,624
            
            
            220,928Net
                revenue
            
            
            3,205,696
            
            
            2,552,739Cost
                of goods sold
            
            
            2,395,515
            
            
            1,842,731Gross
                profit
            
            
            810,181
            
            
            710,008Costs
                and ExpensesBank
                charges
            
            
            14,862
            
            
            4,959Communication
            
            
            100,349
            
            
            25,652Consulting
                fees
            
            
            —
            
            
            60,527Meals
                and entertainment
            
            
            36,057
            
            
            15,762Depreciation
                and amortization
            
            
            52,841
            
            
            17,045Marketing
                and promotion
            
            
            75,213
            
            
            25,984Office
            
            
            219,083
            
            
            195,245Professional
                fees
            
            
            444,117
            
            
            225,931Investor
                relations
            
            
            120,513
            
            
            116,531Salaries
                and wages
            
            
            1,042,755
            
            
            584,400Employee
                benefits
            
            
            37,862
            
            
            16,947Travel
            
            
            243,506
            
            
            94,082Tax
                and licenses
            
            
            7,903
            
            
            18,236Research
                and development
            
            
            151,822
            
            
            136,610Directors
                compensation
            
            
            77,225
            
            
            197,154Bad
                debt expense
            
            
            99,295
            
            
            32,000Other
            
            
            —
            
            
            3,355Foreign
                currency (gain)/loss
            
            
            45,392
            
            
            —Total
                costs and expenses
            
            
            2,768,795
            
            
            1,770,420(Loss)
                from operations
            
            
            (1,958,614
            )
            
            (1,060,412
            )Interest
                expense
            
            
            (48,513
            )
            
            (2,112
            )Amortization
                of beneficial conversion feature of convertible debentures
            
            
            (97,632
            )
            
            —Amortization
                of deferred financing costs
            
            
            (53,750
            )
            
            —Amortization
                of warrant discount
            
            
            (143,990
            )Derivative
                gain (loss)
            
            
            465,774
            
            
            —NET
                LOSS BEFORE TAXES AND EXTRAORDINARY ITEM
            
            
            (1,836,725
            )
            
            (1,062,524
            )Provision
                <benefit> for income taxes
            
            
            —
            
            
            (83,129
            )Net
                LOSS BEFORE EXTRAORDINARY ITEM
            
            $
            (1,836,725
            )
            $
            (979,395
            )Extraordinary
                loss-write-off of goodwill from acqusition
            
            
            2,447,500
            
            
            —NET
                LOSS
            
            $
            (4,284,225
            )
            $
            (979,395
            )Net
                (loss) per common share Basic and diluted from continuing
                operations
            
            $
            (0.069
            )
            $
            (0.045
            )Net
                (loss) per common share basic and diluted after extraordinary items
            
            $
            (0.162
            )
            $
            (0.045
            )Weighted
                average common shares outstanding basic and diluted
            
            
            26,430,822
            
            
            21,702,313The
                average shares listed below were not included in the computation
                of
                diluted lossesper
                share because to do so would have been antidilutive for the periods
                presented:Stock
                options
            
            
            1,147,564
            
            
            390,562Warrants
            
            
            3,273,896
            
            
            2,217,583Convertible
                debentures
            
            
            7,661,712
            
            
            —




F-4
 **Back
          to Table of Contents**




**SUPERCLICK,
                INC.**Consolidated
                Statement of Stockholder's EquityFor
                the Years Ended October 31, 2005 (Restated) and 2004DeficitAccumulated
            
            AccumulatedPreferred
                Stock
            
            Common
                Stock
            
            
            
            Additional
            
            during
                the
            
            Other
            
            
            
            TotalNumber
                of
            
            
            
            Number
                of
            
            
            
            
            
            Paid-in
            
            Developmental
            
            Comprehensive
            
            Treasury
            
            Stockholders'Shares
            
            Amount
            
            Shares
            
            Amount
            
            Subscribed
            
            Capital
            
            Stage
            
            Income
                (loss)
            
            Stock
            
            EquityBALANCES
                October 31, 2003
            
            
            —
            
            
            —
            
            
            19,542,467
            
            
            11,725
            
            
            
            
            
            339,595
            
            
            (376,880
            )
            
            (7,476
            )
            
            —
            
            
            (33,036
            )Shares
                issued during the periodShares
                issued for cash(range
                $0.18-$0.45 per share)
            
            
            
            
            
            
            
            
            4,033,329
            
            
            2,420
            
            
            
            
            
            1,201,070
            
            
            
            
            
            
            
            
            
            
            
            1,203,490Shares
                issued for services
            
            
            
            
            
            
            
            
            621,206
            
            
            373
            
            
            
            
            
            314,781
            
            
            
            
            
            
            
            
            
            
            
            315,154Stock
                options granted
            
            
            
            
            
            
            
            
            
            
            
            —
            
            
            
            
            
            134,822
            
            
            
            
            
            
            
            
            
            
            
            134,822Stock
                subscribed
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            232,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            232,000Foreign
                Currency Transalation Adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            25,120
            
            
            
            
            
            25,120Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (979,395
            )
            
            
            
            
            
            
            
            (979,395
            )BALANCES
                October 31, 2004
            
            
            —
            
            
            —
            
            
            24,197,002
            
            $
            14,518
            
            $
            232,000
            
            $
            1,990,268
            
            $
            (1,356,275
            )
            $
            17,644
            
            $
            —
            
            $
            898,155Shares
                issued during the period:Shares
                issued for cash(range
                $0.18-$0.60 per share)
            
            
            
            
            
            
            
            
            1,266,665
            
            
            760
            
            
            
            
            
            372,240
            
            
            
            
            
            
            
            
            
            
            
            373,000Shares
                issued for services
            
            
            
            
            
            
            
            
            102,067
            
            
            61
            
            
            
            
            
            77,164
            
            
            
            
            
            
            
            
            
            
            
            77,225Shares
                issued for acqusition
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —of
                Hotel Net, LLC
            
            
            
            
            
            
            
            
            2,750,000
            
            
            1,650
            
            
            
            
            
            1,645,850
            
            
            
            
            
            
            
            
            
            
            
            1,647,500Stock
                options exercised
            
            
            
            
            
            
            
            
            51,961
            
            
            31
            
            
            
            
            
            25,949
            
            
            
            
            
            
            
            
            
            
            
            25,980Treasury
                stock received for
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —cashless
                option exercises
            
            
            
            
            
            
            
            
            111,875
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (25,981
            )
            
            (25,981
            )Treasury
                stock issued for services
            
            
            
            
            
            
            
            
            25,000
            
            
            15
            
            
            
            
            
            8,394
            
            
            
            
            
            
            
            
            10,841
            
            
            19,250Reduction
                of treasury stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —issued
                for services
            
            
            
            
            
            
            
            
            (25,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —Stock
                options granted
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            263,566
            
            
            
            
            
            
            
            
            
            
            
            263,566Subscribed
                stock issued
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (232,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            (232,000
            )Repayment
                of Hotel Net
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —shareholder
                investment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (127,600
            )
            
            
            
            
            
            
            
            
            
            
            (127,600
            )Beneficial
                conversion feature ofconvertible
                debentures
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            390,529
            
            
            
            
            
            
            
            
            
            
            
            390,529Foreign
                Currency Translation Adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            48,634
            
            
            
            
            
            48,634Net
                <loss> profit
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,284,225
            )
            
            
            
            
            
            
            
            (4,284,225
            )BALANCES
                October 31, 2005
            
            
            —
            
            
            —
            
            
            28,479,570
            
            $
            17,035
            
            $
            —
            
            $
            4,646,360
            
            $
            (5,640,500
            )
            $
            66,278
            
            $
            (15,140
            )
            $
            (925,967
            )




F-5
 **Back
          to Table of Contents**




**SUPERCLICK,
                INC.**Consolidated
                Statements of Comprehensive Income (Loss)For
                the Years Ended October 31, 2005 (Restated) and 2004Year
                Ended
              October
                31,
            
            Year
                Ended
              October
                31,2005
            
            2004(Restated)Net
                Earnings (Loss)
            
            $
            (4,284,225
            )
            $
            (979,395
            )Other
                Comprehensive Income (Loss)Derivative
                gain/(loss)
            
            
            465,774
            
            
            —Foreign
                Currency Translation Adjustment
            
            
            48,634
            
            
            25,120Net
                Comprehensive (Loss)
            
            $
            (3,769,817
            )
            $
            (954,275
            )




F-6
 **Back
          to Table of Contents**




**SUPERCLICK,
                INC.**Consolidated
                Statements of Cash FlowsFor
                the Years Ended October 31, 2005 (Restated) and 2004Year
                Ended October 31,2005
            
            2004(Restated)CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                Earnings <loss>
            
            $
            (4,284,225
            )
            $
            (979,395
            )Adjustments
                to reconcile net losstonet
                cash used by operating activities:Depreciation
            
            
            52,841
            
            
            17,045Compensation
                expense on intrinsicvalue
                of options issued
            
            
            263,566
            
            
            134,822Stock
                issued for services
            
            
            96,475
            
            
            315,154Impairment
                of goodwill
            
            
            2,447,500Amortization
                of beneficial conversion feature
            
            
            97,632Amortization
                of warrant discount
            
            
            143,990Derivative
                gain on warrants issued with debentures
            
            
            (465,774
            )Deferred
                tax benefit
            
            
            
            
            
            (35,432
            )and
                equipment
            
            
            
            
            
            4,383CHANGES
                IN CURRENT ASSETS AND CURRENTLIABILITIES:
                (Net of effect of acquisition)(Increase)
                decrease in current liabilities:Accounts
                receivable
            
            
            430,405
            
            
            (1,023,546
            )Other
                receivables
            
            
            (188,532
            )
            
            1,401Prepaid
                expenses
            
            
            (13,562
            )
            
            (15,117
            )Inventory
            
            
            295,163
            
            
            (350,974
            )Increase
                (decrease) in current liabilities:Accounts
                payable and accrued expenses
            
            
            (390,266
            )
            
            616,385Accrued
                Payroll
            
            
            43,399
            
            
            (43,414
            )Accrued
                other
            
            
            18,692
            
            
            (4,752
            )Deferred
                revenue
            
            
            (385,919
            )
            
            515,194NET
                CASH USED FOR OPERATING ACTIVITIES
            
            
            (1,838,615
            )
            
            (848,246
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Acquisition
                of furniture and equipment
            
            
            (180,361
            )
            
            (133,288
            )NET
                CASH USED FOR INVESTING ACTIVITIES
            
            
            (180,361
            )
            
            (133,288
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Sale
                of common stock
            
            
            141,000
            
            
            1,435,490Capital
                investment repayment
            
            
            (127,600
            )Payment
                of related party notes payable
            
            
            (299,810
            )Proceeds
                from convertible debenture
            
            
            2,250,000Proceeds
                from loans
            
            
            46,669Repayment
                of capital loans
            
            
            (722
            )Related
                party loan
            
            
            
            
            
            (22,920
            )NET
                CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            2,009,537
            
            
            1,412,570EFFECT
                OF EXCHANGE RATE CHANGES ON CASH
            
            
            31,398
            
            
            25,120NET
                INCREASE IN CASH
            
            
            21,959
            
            
            456,156CASH,
                beginning of period
            
            
            475,479
            
            
            19,323CASH,
                end of period
            
            $
            497,438
            
            $
            475,479Taxes
                paid
            
            $
            4,250
            
            $
            800Interest
                paid
            
            $
            —
            
            $
            2,112Other
                non-cash investing and financing activities:Shares
                issued for services
            
            $
            96,475
            
            $
            315,154Shares
                issued for acquisition
            
            $
            1,647,500
            
            $
            —




F-7
 **Back
          to Table of Contents**




**Superclick
                USA****(Formerly
                Hotel Net LLC)**Supplemental
                Schedule of Business AcquiredThe
                Company acquired 100% of the Member interests of Hotel Net, LLC
                (Subsidiary) as further described in Note O. The fair value of the
                assets
                and liabilities of Hotel Net, LLC were as follows at August 31,
                2005:CURRENT
                ASSETSCash
            
            $
            448,412Accounts
                receivable
            
            
            180,539Inventory
            
            
            27,130TOTAL
                CURRENT ASSETS
            
            
            656,081Furniture
                & Equipment, net
            
            
            26,023Deposit
            
            
            2,123TOTAL
                ASSETS
            
            $
            684,227CURRENT
                LIABILITIESAccounts
                Payable & Accrued Expenses
            
            
            408,439Due
                to Related Parties
            
            
            215,535Notes
                Payable
            
            
            84,275Due
                to Superclick
            
            
            450,000TOTAL
                LIABILITIES
            
            
            1,158,249EQUITYMembers
                Capital
            
            
            127,600Retained
                Earnigs (deficit)
            
            
            (601,622
            )TOTAL
                EQUITY
            
            
            (474,022
            )TOTAL
                LIABILITIES AND EQUITY
            
            $
            684,227




F-8
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
        TO
        FINANCIAL STATEMENTS
 YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




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 the 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 and reverse merger.





Pursuant
      to a share purchase agreement dated October 7, 2003, the Superclick, Inc.
      acquired 100% of the issued and outstanding shares of Superclick Networks,
      Inc.
      from its shareholders. In consideration for acquiring all of the 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.





Concurrent
      with the reverse merger of Superclick, Inc. with Superclick Networks, Inc,
      the
      Company retroactively affected a 1 to 100 common stock split and retroactively
      assigned $0.0006 par value to common stock where no value had been previously
      stated. All share and


F-9
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
      TO
      FINANCIAL STATEMENTS


YEARS
      ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)





Organization
      (Continued)





per
      share
      amounts shown in these financial statements reflect the stock split for all
      periods presented.





The
      consolidated financial statements include the operations of Superclick, Inc.
      from October 8, 2003 through October 31, 2005.





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 the
      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 reasonable support its operating
      expenses through cashflow.





In
      order
      to support its business plan, Superclick, Inc. will continue to rely on equity
      financing, and might also seek additional debt financing. There can be no
      assurance that any such additional financing will be available on terms, in
      amounts, or at timing acceptable to the Company, if available at
      all.





Principles
      of consolidation





The
      consolidated financial statements include the accounts of Superclick Networks,
      Inc. and its subsidiaries, which are 100% consolidated in the financial
      statements. All material inter-company accounts and transactions have been
      eliminated. The Company emerged from the development stage during the year
      ended
      October 31, 2005. Accordingly, the Company revised presentation of its
      consolidated financial statements to reflect that of a commercial
      enterprise.


F-10
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
      TO
      FINANCIAL STATEMENTS


YEARS
      ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)





Accounting
      estimates





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





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. During the year ended October 31, 2005, the allowance for doubtful
      accounts increased $99,295 to $131,295 at October 31, 2005 from $32,000 at
      October 31, 2004.





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.


F-11
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
        TO
        FINANCIAL STATEMENTS
 YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)





Property
      and equipment (Continued)





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
              %




Long-lived
      assets





Statement
      of Financial Accounting Standards No. 121, "Accounting for the Impairment of
      Long-Lived Assets and for Long-Lived Assets to be Disposed Of," 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 future net cash flows expected to result from the
      asset, including eventual disposition. If the future net cash flows are 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 is recognized when
      the
      earning process is complete and the risk and rewards of ownership have
      transferred to the customer, which is generally considered to have occurred
      upon
      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, the Company allocates 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. The Company at times may enter into multiple-customer
      contracts in which the Company allocates revenue based on the number of
      specified users at each customer, and recognizes revenue upon


F-12
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)





Revenue
      recognition policy (Continued)





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.





Advertising





The
      Company expenses all advertising as incurred. For the year ended October 31,
      2005 and 2004, the Parent incurred approximately $45,531 and $7,100,
      respectively in advertising expense.





Loss
      per common share





The
      Company adopted Statement of Financial Accounting Standards No. 128 that
      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. The assumed exercise of options and warrants and assumed conversion
      of
      convertible securities have not been included in the calculation of diluted
      loss
      per share as the affect would be anti-dilutive.





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
      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


F-13
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
        TO
        FINANCIAL STATEMENTS
 YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)





Income
      taxes (Continued)





tax
      assets and liabilities are expected to be realized or settled as prescribed
      in
      FASB Statement No. 109, Accounting for Income Taxes. 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.





Intangible
      assets





A
      summary
      of the treatment of intangible assets of the corporation is summarized as
      follows:




October
                31, 2005Gross
                Intangible Assets
            
            Accumulated
                Amortization
            
            Net
                Intangible AssetsOther
                intangibles
            
            
            500
            
            
            500
            
            
            0




Impact
      of accounting standards





In
      November 2004, the FASB issued SFAS 151, Inventory Costs—an amendment of ARB No.
      43, Chapter 4. The Statement amends the guidance of ARB No. 43, Chapter 4,
      Inventory Pricing, by clarifying that abnormal amounts of idle facility expense,
      freight, handling costs, and wasted materials (spoilage) should be recognized
      as
      current-period charges and by requiring the allocation of fixed production
      overheads to inventory based on the normal capacity of the production
      facilities. The adoption of SFAS 151 did not have any impact on the Company’s
      financial condition or results of operations.





In
      December 2004, the FASB issued a revision to SFAS 123 (revised 2004),
      Share-Based Payment. The revision requires all entities to recognize
      compensation expense in an amount equal to the fair value of share-based
      payments granted to employees. The statements eliminate the alternative method
      of accounting for employee share- based payments previously available under
      APB
      25. The provisions of SFAS 123R are effective as of the first interim period
      that begins after June 15, 2005. Accordingly, the Company will implement the
      revised standard in the final quarter of fiscal year 2005. Currently, the
      Company accounts for its share-based


F-14
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        A
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)





Impact
      of accounting standards (Continued)





payment
      transactions under the provisions of APB 25, (See Note L). Management is
      assessing the implications of this revised standard, which may materially impact
      the Company's results of operations in the first quarter of fiscal year 2006
      and
      thereafter.





In
      December 2004, the FASB issued SFAS No. 153 "Exchanges of Nonmonetary
      Assets-amendment of APB Opinion No. 29". Statement 153 eliminates the exception
      to fair value for exchanges of similar productive assets and replaces it with
      a
      general exception for exchange transaction that do not have commercial
      substance, defined as transaction that are not expected to result in significant
      changes in the cash flows of the reporting entity. This statement is effective
      for exchanges of nonmonetary assets occurring after June 15, 2005. The Company
      does not believe that this recent accounting pronouncement will have a material
      impact on their financial position or results of operations.





In
      May
      2005, the FASB issued SFAS No. 154 “Accounting Changes and Error Corrections - a
      replacement of APB Opinion No. 20 and FASB Statement No. 3.” This Statement
      replaces APB Opinion No. 20, “Accounting Changes”, and FASB Statement No. 3,
“Reporting Accounting Changes in Interim Financial Statements” and changes the
      requirements for the accounting for and reporting of a change in accounting
      principle. This Statement applies to all voluntary changes in accounting
      principle.  It also applies to changes required by an accounting
      pronouncement in the unusual instance that the pronouncement does not include
      specific transition provision. When a pronouncement includes specific transition
      provisions, those provisions should be followed. The Company has no transactions
      that would be subject to SFAS 154.





Concentrations
      of credit risk





The
      Company performs ongoing credit evaluations of its customers. For the year
      ended
      October 31, 2005, three customers individually accounted for 37%, 22% and 12%
      of
      accounts receivable. For the year ended October 31, 2004, two customers
      individually accounted for 51% and 17% of accounts receivable. In the year
      ended
      October 31, 2005, the Company’s two largest customers accounted for 48% and 7%
      of sales. In the year ended October 31, 2004, the Company's two largest
      customers accounted for 51% and 20% of sales.


F-15
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        A
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)





Concentrations
      of credit risk (Continued)





For
      the
      years ended October 31, 2005 and 2004, approximately 42% and 45%, respectively,
      of the Company’s net sales were made to customers outside the United
      States.





Financial
      instruments that potentially subject the Company to concentrations of credit
      risk consist of cash and cash equivalent accounts in financial
      institutions.  Total cash held by the Company at October 31, 2005 exceeded
      the insurance provided from the Federal Deposit Insurance Corporation (FDIC)
      by
      $330,346. It is the opinion of management that the solvency of the financial
      institutions is not of particular concern at this time.





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, 2005 and 2004, the Company’s five largest suppliers
      accounted for 36% and 73% 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.




Disclosure
      about Fair Value of Financial Instruments





The
      Company estimates that the fair value of all financial instruments at October
      31, 2005, 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.





Foreign
      Currency Translation





The
      financial statements of the Canadian Parent 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.


F-16
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        A
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)





Research
      and development





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





NOTE
      B
      - INVENTORIES





Inventories
      are comprised of computer equipment and are stated at the lower of cost or
      market, as determined using the first in, first out method.





NOTE
      C
      - DEFERRED FINANCING COSTS





As
      of
      October 31, 2005, the deferred financing costs balance consisted of $161,250
      of
      unamortized convertible debenture issuance costs (See Note J for further
      detail).





NOTE
      D
      - PROPERTY AND EQUIPMENT





During
      the year ended October 31, 2005 and 2004, the Company incurred depreciation
      expense of $52,841 and $17,045, respectively. Property and equipment at October
      31, 2005 consisted of the following:


Furniture
                & fixtures
            
            $
            119,665Computer
                hardware
            
            
            177,306Leasehold
                improvements
            
            
            29,455Fabrication
                mold and dye
            
            
            19,278Computer
                software
            
            
            85,701431,405Accumulated
                depreciation
            
            
            (119,190
            )Fixed
                assets, net
            
            $
            312,215




NOTE
      E
      - 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


F-17
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
      TO
      FINANCIAL STATEMENTS


YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      E
      - NET OPERATING LOSS CARRY FORWARD (Continued)





income
      and tax planning strategies in making this assessment. At October 31, 2003
      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
      $359,000 and $1,261,000 for the year ended October 31, 2004 and 2005,
      respectively, assuming a tax rate of 40%.




United
                States Corporation Income TaxesYear
                of Loss
            
            Amount
            
            Expiration
                DateOctober
                31, 2005
            
            $
            4,184,331
            
            
            October
                31, 2025October
                31, 2004
            
            
            898,697
            
            
            October
                31, 2024October
                31, 2003
            
            
            53,638
            
            
            October
                31, 2023December
                31, 2002
            
            
            80,395
            
            
            December
                31, 2022December
                31, 2001
            
            
            91,564
            
            
            December
                31, 2021December
                31, 2000
            
            
            88,027
            
            
            December
                31, 2020December
                31, 1999
            
            
            18,936
            
            
            December
                31, 2019$
            5,415,588


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




Canadian
                  Income Taxes (Stated in CAD)Year
                  of Loss
              
              Amount
              
              Expiration
                  DateOctober
                  31, 2005
              
              $
              678,878
              
              
              October
                  31, 2012October
                  31, 2004
              
              
              151,332
              
              
              October
                  31, 2011October
                  31, 2003
              
              
              5,322
              
              
              October
                  31, 2010October
                  31, 2002
              
              
              350,910
              
              
              October
                  31, 2009October
                  31, 2001
              
              
              24,879
              
              
              October
                  31, 2008$
              1,211,321
 At
      October 31, 2005 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.


F-18
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        -
        E NET OPERATING LOSS CARRY FORWARD (Continued)





For
      the
      year ended October 31, 2004 the Company recognized $47,697 as receivable for
      research and development and accrued $35,432 as a deferred tax benefit created
      by research and development activities that occurred during the fiscal year
      then
      ended. No valuation allowance was recorded in connection with the deferred
      tax
      benefit, generated during the year ended October 31, 2004, as it was the opinion
      of management that they would have the ability to utilize it in the future.





The
      Company performs research and development on an on-going basis, which is
      available for refund or future tax credits in Canada. Due to the recurring
      losses of the Company during the year ended October 31, 2005, management
      recognized an allowance for the full amount it anticipated to generate in
      connection with research and development deferred tax benefit generated for
      the
      year then ended. It has recognized a receivable of $70,766 CDN for the research
      and development activities in 2005.





NOTE
      F
      - ACCOUNTS PAYABLE





Accounts
      payable at October 31, 2005 consisted of $48,515 in interest, $144,000 in
      professional fees and $632,108 in trade payables. There were no consulting
      fees
      payable, or taxes payable.





NOTE
      G
      - DEFERRED REVENUE





Deferred
      revenue 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. As of October 31, 2005, the Company’s
      deferred revenue balance was $137,792. For the year ended October 31, 2005,
      the
      Company recognized $631,624 in upgrade and maintenance revenue.





NOTE
      H
      - LOANS PAYABLE





In
      September 2005, the Company entered into a Commercial Purchase Plan Agreement
      with DELL Financial Services of Canada for the purchase of computer hardware.
      The balance at October 31, 2005 is $ 45,670. Future maturities are as
      follows:


F-19
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  Year
                    Ended October 31,
                
                Amount2006
                
                $
                9,4102007
                
                
                10,8152008
                
                
                12,4292009
                
                
                13,016Total
                
                $
                45,670


NOTE
      I
      - NOTES PAYABLE TO FORMER SHAREHOLDERS OF HOTEL NET, LLC





As
      filed
      on July 20, 2005 with the Securities and Exchange Commission on Form 8-K, on
      July 18, the Company entered into a binding letter of intent providing for
      the
      acquisition of Hotel Net, LLC. As filed on September 6, 2005, the Company closed
      its definitive agreement to purchase 100% of the membership interest of Hotel
      Net LLC. Pursuant to the terms of the definitive agreement, the Company issued
      face amount $350,000 of notes payable to the former shareholders with a maturity
      date of January 1, 2006 and paid Hotel Net’s shareholders $450,000 in cash upon
      the execution of the definitive agreement and 2,750,000 shares of its restricted
      common stock.. In addition, and pursuant to the terms of the definitive
      agreement certain founding members of Hotel Net will enter into an “earn-out”
with the Company wherein if it meets certain sales objectives within the first
      year from the closing date of the acquisition, it will receive up to 2,000,000
      additional shares of restricted common stock and $200,000 in cash.





NOTE
      J
      - CONVERTIBLE DEBENTURE





On
      August
      1, 2005, the Company completed a private placement of convertible debentures
      generating gross proceeds of $1.75 million and the issuance of warrants to
      purchase 735,370 shares of the Company’s common stock. On August 18, 2005, the
      Company completed a private placement of convertible debentures generating
      gross
      proceeds of $0.5 million and the issuance of warrants to purchase 230,627 shares
      of the Company’s common stock. In total, the Company received $2.035 of net
      proceeds and issued 965,997 warrants. Third party fees totaled $215,000, which
      was paid in cash.





The
      terms
      of the warrants and debentures are substantially the same. The exercise price
      of
      the warrants is calculated the same as for the conversion price of the
      convertible debentures described below. The warrants and debentures are
      immediately exercisable. The debentures bear interest of 9%, payable quarterly
      at the option of the Company in cash or stock. The interest Rate adjusts to
      12%
      at maturity, or twelve months from the closing date.





Prior
      to
      maturity, the debentures and warrants are convertible into the Company's common
      stock at a conversion price equal to 70% of the average closing bid price of
      the
      Company's common stock for the 45 trading days preceding a conversion date.
      If
      the closing bid price for the stock is


F-20
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        J
        - CONVERTIBLE DEBENTURE (Continued)





less
      than
      $0.50 on a day on which the Investor converts, then during that calendar month
      the Investor will only be permitted to convert principal and interest in an
      aggregate amount of up to $175,000. This $175,000 limitation would not apply
      in
      the event that the closing bid price on such conversion date is at least 150%
      of
      the average closing bid price for the ten trading days immediately prior to
      such
      conversion. Notwithstanding the foregoing, the Conversion Price during the
      pre-maturity period shall not be less than $.30 per share. After maturity,
      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.





Cash
      settlement of the unexercised portion of the debenture is required. If a cash
      settlement of the outstanding debt is not made in accordance with the debenture
      agreement on the maturity date, then a ten (10%) percent penalty of the
      outstanding debt balance will be added to the debt balance.





The
      debentures provide that the holders of may only convert the debenture if the
      number of shares held by the lender or its affiliates after conversion would
      not
      exceed 4.99% of the outstanding shares of the Company's common stock following
      such conversion.





In
      connection with the transaction, we entered into a registration rights
      agreement. Pursuant to the terms of the Registration Rights Agreement, within
      thirty calendar days following the initial closing date, or September 1, 2005,
      the Company was required to file with the Securities and Exchange Commission
      a
      registration statement under the Securities Act of 1933, as amended, covering
      the resale of all of the common stock the convertible debenture would be
      converted into which is at least equal to two hundred percent (200%) of the
      number of shares into which the Debentures and all interest thereon through
      the
      second anniversary of the initial closing date would be convertible based on
      an
      assumed Conversion Price of $0.30 per share and the common stock underlying
      the
      warrants.





The
      Registration Rights Agreement further provides that if a registration statement
      is not filed, or does not become effective, within 100 days from the initial
      closing date, then in addition to any other rights the holders may have, the
      Company would be required to pay each holder an amount in cash, as liquidated
      damages, equal to an aggregate five percent (5%) of the purchase price of the
      debentures (2% for days 1-30, plus 2% for days 31-60, plus 1% for days 61-75).
      We filed an SB-2 with the SEC on September 15, 2005 effectively registering
      19,215,997 shares of common stock of which 18,150,000 relates to the conversion
      of principle and interest of the convertible debenture and 965,997 relates
      to
      the exercise of warrants issued in connection with the convertible debenture.
      The SEC declared the registration of shares underlying the debentures effective
      within the allowed time on December 12, 2005.


F-21
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
        TO
        FINANCIAL STATEMENTS
 YEARS
        ENDED OCTOBER 31 2005 (Restated) AND 2004




NOTE
      J
      - CONVERTIBLE DEBENTURE (Continued)





The
      issuance costs related to the convertible debentures of approximately $215,000
      in cash was capitalized and is being amortized over the life of the debt.





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 since the warrants contain registration
      rights where significant liquidated damages would be required to be paid to
      the
      holder in the event the Company failed to receive an effective registration,
      and
      the cashless exercise feature of the warrants and variable exercise price which
      support the notion of net-cash settlement and treatment of the warrants as
      a
      liability. The initial value of the warrants was treated as a discount to the
      debenture and recorded as a liability. The Company calculated the initial value
      of the warrants on the closing date of the transactions as being $658,973 as
      determined using a Black-Scholes option pricing model with the following
      assumptions: expected term 5 years, exercise price $.5949, volatility 175%,
      risk
      free rate 4.32%, and zero dividend yield. 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 have a
      value
      of $193,199 at October 31, 2005 and the company recognized a derivative gain
      of
      $465,774 from the initial value date to October 31, 2005. The initial discount
      of $658,973 to the debenture will be amortized over the term of the debenture,
      or twelve (12) months and calculated based upon the effective interest method.
      During the year ended October 31, 2005, the Company recognized $143,990 in
      non-cash interest expense related to the warrant discount.





The
      Company determined that the $1.75 million debenture was issued with a beneficial
      conversion feature (“BCF”) due to the conversion price ($.5949) being less than
      the closing stock price ($.79) on the date of issuance, and the conversion
      feature being in-the-money. Conversely, on the issuance date of the $0.5 million
      debenture the conversion feature was not in-the-money and no BCF was recognized.
      Thus, pursuant to EITF 00-27, 27, Application of Issue No. 98-5 to Certain
      Convertible Instruments, the BCF has been determined based on the gross
      debenture amount less the portion attributable to the warrants described above,
      and recorded as a discount to reduce the carry value of the debenture and
      increase additional-paid-in-capital at its fair value of $390,529 on the date
      of
      issuance as determined using the intrinsic value method. The discount will
      be
      amortized to interest expense over the life of the debenture. The company has
      recognized $65,088 in non-cash interest expense attributable to the amortization
      of this discount through October 31, 2005.


F-22
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        K
        - GOING CONCERN AND MANAGEMENT’S PLANS


The
      Company will be required to conduct significant research, development and
      testing activities which, together with the establishment of a large marketing
      and distribution presence and other general and administrative expenses, are
      expected to result in operating losses for the next few quarters. Accordingly,
      there can be no assurance that the Company will continue as a going concern.
      The
      Company has incurred recurring losses and cash flow deficiencies from operations
      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. Management is
      currently in the process of seeking additional equity financing with potential
      investors. 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
      L
      - PREFERRED AND COMMON STOCK





Private
      Placement and Warrant Activity





During
      the year ended October 31, 2004 and pursuant to the September 2003 private
      placement, we issued 1,933,333 shares of restricted common stock in exchange
      for
      $174,000. Attached to each share of restricted common stock were two warrants
      giving the holder the right to purchase common stock; Warrant "A" has an
      exercise price of $0.18 and a three-year life, and Warrant "B" has an exercise
      price of $0.24 and a three-year life. Each warrant has one-for-one rights to
      purchase one share of common stock. The issuance of these securities was exempt
      under section 4(2) of the Securities Act of 1933, as amended as a sale not
      involving a public offering.





During
      the year ended October 31, 2004 and pursuant to the September 2003 private
      placement, 1,933,330 of the series “A” Warrants were exercised at $.18 per
      share, resulting in $348,000 net proceeds to the Company and the issuance of
      1,933,330 restricted common shares.





During
      the quarter ended April 30, 2004 and pursuant to the September 2003 private
      placement 966,665 of series “B” Warrants were exercised at $.24 per share,
      resulting in $232,000 net proceeds to the Company and the issuance of 966,665
      restricted common shares. The shares were issued subsequent to year-end and
      were
      classified as stock subscribed in Stockholder’s Equity at October 31, 2004 and
      issued subsequent to that year-end. At October 31, 2005 966,665 “B” Warrants
      were unexercised (See note M).





As
      of
      October 31, 2004 and commensurate with the April 6, 2004 private placement
      filed
      under Form SB-2 with the SEC on June 8, 2004, the Company issued 1,999,999
      shares of common stock in exchange for gross proceeds of $900,000. Each share
      issued in accordance with the private placement is entitled to one “A” Warrant
      with an exercise price of $0.60 per share.


F-23
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  During
        the year ended October 31, 2005, 100,000 “A” Warrants were exercised resulting
        in gross proceeds of $60,000. 2,099,999 “A” Warrants were unexercised as of
        October 31, 2005 (See Note M).





During
      the quarter ended April 30, 2005 and pursuant to the April 6, 2004 financing,
      which the board had previously in a resolution extended through April 1, 2005,
      the Company issued 200,000 shares of Common Stock in exchange for net proceeds
      of $81,000. Attached to this issuance were 200,000 Common Stock A Warrants
      with
      an exercise price of $0.60 per share. The Company received aggregate gross
      proceeds of $990,000 pursuant to the April 6, 2004 private placement. This
      private placement was closed effective April 1, 2005 and no additional proceeds
      will be received.





In
      August
      of 2005, we issued $2,250,000 of convertible debentures with 965,997 warrants
      attached (See Note J).





Stock
      issued for Services





During
      the year ended October 31, 2004, the Company issued 621,206 shares of Common
      Stock in exchange for services with a total value of $315,154.





On
      July
      28, 2005, the Company issued 25,000 shares of Common Stock for services from
      Treasury Stock at fair market value of $0.77 per share, or $19,250.





During
      the year ended October 31, 2005 the Company issued 62,856 shares to the members
      of the Board of Directors for services rendered. Total value of the issuances
      is
      $77,225. Value for shares issued for services is based on fair market value
      of
      our stock on the date of issuance.





Stock
      Options





During
      the year ended October 31, 2005, three employees exercised their vested options
      by utilizing the option’s cashless feature whereby the exercise price of the
      common stock received is paid for with a portion of the shares exercised and
      which shares are returned to the company as Treasury Stock in lieu of cash.
      In
      total, 111,875 options were exercised with 51,961 shares of common stock issued
      to the optionees and 58,664 shares of common stock issued in the name of
      Superclick with $25,981 recorded to Treasury Stock.





On
      March
      3, 2005 the Board of Directors increased the employee stock option pool
      established by the employee stock option plan to 3,500,000 from 2,000,000 (See
      Note N).


F-24
 **Back
          to Table of Contents**
  SUPERCLICK,
          INC.
 NOTES
            TO
            FINANCIAL STATEMENTS
 YEARS
            ENDED OCTOBER 31 2005 (Restated) AND 2004
  Acquisition
          of Hotel Net, LLC




On
      July
      21, 2005, the Company issued 1,500,000 shares of Common Stock to the
      shareholders of Hotel Net, LLC pursuant to the July 18, 2005 Letter of Intent.
      The shares were valued at fair market value of $0.64, or $960,000 (See Note
      P).
      Also, in connection with the purchase of Hotel Net LLC, on September 14, 2005,
      the Company issued 1,250,000 shares of common stock to the shareholders of
      Hotel
      Net, LLC. The shares were valued at fair market value of $0.55, or $687,500
      (See
      Note P).


F-25
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        M
        - WARRANTS





At
      October 31, 2005 the Company had 966,665 "B" Warrants, 2,099,999 "A" Warrants
      and 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
              
              DateB
              
              
              386,666
              
              $
              0.24
              
              
              9/9/06B
              
              
              193,333
              
              $
              0.24
              
              
              9/29/06B
              
              
              193,333
              
              $
              0.24
              
              
              10/15/06B
              
              
              193,333
              
              $
              0.24
              
              
              10/22/06Subtotal
              
              
              966,665A
              
              
              55,555
              
              $
              0.60
              
              
              4/14/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/19/07A
              
              
              444,444
              
              $
              0.60
              
              
              4/19/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/23/07A
              
              
              200,000
              
              $
              0.60
              
              
              4/29/07A
              
              
              100,000
              
              $
              0.60
              
              
              4/29/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/7/07A
              
              
              200,000
              
              $
              0.60
              
              
              5/10/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/12/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/17/07A
              
              
              100,000
              
              $
              0.60
              
              
              5/24/07A
              
              
              11,000
              
              $
              0.60
              
              
              5/24/07A
              
              
              100,000
              
              $
              0.60
              
              
              6/2/07A
              
              
              100,000
              
              $
              0.60
              
              
              6/16/07A
              
              
              89,000
              
              $
              0.60
              
              
              6/17/07A
              
              
              200,000
              
              $
              0.60
              
              
              3/30/08Subtotal
              
              
              2,099,999Debenture
              
              
              735,370
              
              
              >or=to
                  $0.30
              
              
              7/31/2010Debenture
              
              
              230,627
              
              
              >or=to
                  $0.30
              
              
              8/17/2010Subtotal
              
              
              965,997Total
              
              
              4,032,661


During
      the year ended October 31, 2005, 100,000 “A” Warrants were exercised resulting
      in $60,000 to the Company and the issuance of 100,000 shares of Common
      Stock.


F-26
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        N
        - STOCK INCENTIVE PLANS





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
      shall be 3,500,000 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.





On
      March
      4, 2004, the Company awarded its then CEO a non-qualified stock option to
      purchase 884,784 shares of common stock of the Company at an exercise price
      of
      $.50 per share with an expiration date of March 3, 2010. The options vest and
      become exercisable at a rate of 38,866 per month over a twenty-four month
      period. On April 28, 2005, the Company and John Glazik mutually agreed to
      terminate Mr. Glazik's position as President and Chief Executive Officer and
      to
      close its executive offices in Dallas, Texas due to the Company's decision
      to
      relocate its administrative center to its operations in Montreal. Pursuant
      to
      Mr. Glazik’s stock option grant, at the time of departure from the Company,
      589,856 shares had vested. The remaining 294,928 shares available to Mr. Glazik
      according to the terms of the stock option grant were canceled.





On
      June
      1, 2004, the Company awarded employees non-qualified stock options to purchase
      720,000 shares of common stock of the Company at an exercise price of $.50
      per
      share with an expiration date of June 1, 2010. The options vest and become
      exercisable at a rate of 90,000 per quarter over a twenty-four month period.





On
      September 1, 2004, the Company awarded its then CFO a non-qualified stock option
      to purchase 300,000 shares of common stock of the Company at an exercise price
      of $.65 per share with an expiration date of September 1, 2010. The options
      vest
      and become exercisable at a rate of 12,500 per month over a twenty-four month
      period. On April 28, 2005, Superclick, Inc. and Claude Smith mutually agreed
      to
      terminate Mr. Smith's position as Chief Financial Officer and to close its
      executive offices in Dallas, Texas due to the Company's decision to relocate
      its
      administrative center to its operations in Montreal. Pursuant to Mr. Smith’s
      stock option grant, at


F-27
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        N
        - STOCK INCENTIVE PLANS (Continued)





the
      time
      of departure from the Company, 137,500 shares had vested. The remaining 162,500
      shares available to Mr. Smith according to the terms of the stock option grant
      were canceled.





On
      December 8, 2004, the Company awarded employees non-qualified stock options
      to
      purchase 125,000 shares of common stock of the Company at an exercise price
      of
      $.60 per share with an expiration date of December 7, 2011. The options vest
      and
      become exercisable at a rate of 15,625 per quarter over a twenty-four month
      period.





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 shall have a duration of ten years commencing on January 1,
      2004.
      Awardees are defined as a 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 cash
      and
      in full at the time of exercise. 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.


F-28
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        N
        - STOCK INCENTIVE PLANS (Continued)





The
      following table summarizes the Company's stock option activity for the year
      ended October 31, 2005:




2005Weighted
                AverageShares
            
            Exercise
                PriceOutstanding
                at beginning of period
            
            
            1,904,784
            
            $
            0.52Granted
            
            
            125,000
            
            
            0.60Forfeited
            
            
            (457,428
            )
            
            0.54Exercised
            
            
            (111,875
            )
            
            0.50Outstanding
                at end of year
            
            
            1,460,481
            
            $
            0.52Options
                exerciseable at year end
            
            
            1,147,564


The
      following table summarizes information about the Company's stock options
      outstanding at October 31, 2005:




Options
                  Outstanding
              
              Options
                  ExercisableNumber
              
              Weighted
              
              Weighted
              
              
              
              WeightedRange
                  of
              
              Outstanding
              
              Average
              
              Average
              
              
              
              AverageExercise
              
              At
                  October 31,
              
              Contractural
              
              Exercise
              
              Number
              
              ExercisePrices
              
              2005
              
              Life
                  (years)
              
              Price
              
              Outstanding
              
              Price$
                  0.50
              
              
              589,856
              
              
              —
              
              $
              0.50
              
              
              589,856
              
              $
              0.500.50
              
              
              608,125
              
              
              0.58
              
              
              0.50
              
              
              368,125
              
              
              0.500.65
              
              
              137,500
              
              
              —
              
              
              0.65
              
              
              137,500
              
              
              0.650.60
              
              
              125,000
              
              
              1.10
              
              
              0.60
              
              
              52,083
              
              
              0.60Total
              
              
              1,460,481
              
              
              0.92
              
              $
              0.52
              
              
              1,147,564
              
              $
              0.52


The
      Company accounts for stock options utilizing the intrinsic value method for
      fixed awards under the provisions of Accounting Principles Board (APB) Opinion
      No. 25, Accounting for Stock Issued to Employees. Previously, the Company valued
      its options according to the variable method due to the “cashless exercise”
option contained in its option grants. However, effective June 1, 2005, the
      Company’s Board of Directors resolved to eliminate the “cashless exercise”
provision thereby allowing the company to account for its outstanding options
      according to the fixed method. Accordingly, compensation cost is measured as
      the
      excess, if any, of the quoted market price of the Company’s stock at the end of
      each reporting period over the amount an employee must pay to acquire the stock,
      amortized over the vesting period. During the three and twelve months ended
      October 31, 2005, the Company recognized compensation expense of $35,094 and
      $263,566, respectively. To date the Company has recognized compensation expense
      in the amount of $398,388.


F-29
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        N
        - STOCK INCENTIVE PLANS (Continued)





The
      following information is provided in accordance with SFAS No. 123, "Accounting
      for Stock-Based Compensation." If the compensation cost for these plans had
      been
      determined based on the fair value at the grant dates for awards consistent
      with
      the method of SFAS Statement 123, the pro forma effect on the Company's net
      loss
      per share for the year ended October 31, 2005 would have been:





Year
                  Ended
              
              Year
                  EndedOctober
                  31, 2005
              
              October
                  31, 2004Net
                  loss as reported
              
              
              ($4,284,225
              )
              
              ($979,395
              )Pro
                  forma
              
              
              ($4,461,225
              )
              
              ($1,045,067
              )Net
                  loss per share, as reported
              
              
              ($0.162
              )
              
              ($0.045
              )Pro
                  forma
              
              
              ($0.169
              )
              $
              0.048




NOTE
      O
      - RELATED PARTY TRANSACTIONS





During
      the year ended October 31, 2005 the Board of Directors passed a resolution
      to
      compensate its Board members for service on the Board. The compensation would
      be
      in the form of stock equivalent to $15,000 with piggy back registration rights,
      based on the price of the stock at close on the first day of trading in the
      new
      fiscal year. The stock is issued quarterly and is valued at fair market value
      on
      date of issuance. During the year ended October 31, 2005, the Company awarded
      102,067 restricted shares of its common stock to directors totaling
      $77,225.





Mr.
      Pitcher, Chairman of the Company, provides consulting services to the Company
      in
      exchange for monthly compensation of $2,980 and related expenses. Mr. Pitcher
      also receives stock awards for his service on the Board in the amount of $20,000
      annually. During the year ended October 31, 2005, Mr. Pitcher received $60,109
      and 21,487 shares of common stock valued at $16,257, or the fair market value
      on
      the date of issuance.





During
      the year ended October 31, 2005 Board members George Vesnaver and Paul Gulyas
      each received $4,000 as a consultation fee related to the separation of the
      former CEO and former CFO.





During
      the year the Company leased office space for storage purposes for approximately
      $205 per month from the father of Sandro Natale, the Interim Chief Executive
      Officer.





During
      September and October of 2005, the Company paid $16,000 to Chirag Patel, former
      CEO of Hotel Net, LLC and current Board member of the Company, in consideration
      for services performed.


F-30
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        O
        - RELATED PARTY TRANSACTIONS (Continued)





During
      the year ended October 31, 2005 the Company paid for services to companies
      with
      affiliations to certain Board of Director members. The Company paid for public
      relations, investor relations and marketing services to two companies with
      whom
      the Chairman of the Board is affiliated. Total compensation to these two
      companies was $55,910 in cash.





During
      the year ended October 31, 2005, SNI recognized revenue deferred at October
      31,
      2004 of approximately $71,300 to a company whose IT Director also served as
      a
      member of the Board of Directors of the Company during the fiscal year ended
      October 31, 2004.





NOTE
      P
      - ACQUISITION OF HOTEL NET, LLC





During
      September 2005, the Company closed its purchase of Hotel Net, LLC (Hotel Net)
      pursuant to a Membership Interest Purchase Agreement dated August 31, 2005
      ("Agreement"), the form of which has been filed as Exhibit 2.1 on the Company's
      Form 8-K with the Securities and Exchange Commission on September 9,
      2005.





Pursuant
      to the Agreement, Superclick issued Hotel Net's shareholders 2,750,000 shares
      of
      its restricted common stock and paid Hotel Net's shareholder's USD $450,000
      in
      cash. Within 120 days of the Execution Date, that is, on December 30, 2005,
      Superclick was obligated to pay Hotel Net's shareholders an additional USD
      $350,000 in cash. However, this liability is currently being renegotiated due
      to
      the Company’s low cash resources and Hotel Net’s underperformance.





In
      addition, pursuant to the terms of the definitive agreement certain founding
      members of Hotel Net entered into an “earn-out” with the Company wherein if
      Hotel Net meets certain sales objectives within the first year from the closing
      date of the acquisition, the founding members will receive up to 2,000,000
      additional shares of restricted common stock and $200,000 in cash.





The
      Company obtained the necessary funds to finance the acquisition through
      borrowings under a convertible debenture loan with Chicago Venture Partners
      LP
      and Superclick Co-Investment LLC.


F-31
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





The
      Balance Sheet of the Hotel Net, LLC on August 31, 2005 was as
      follows:




August
                  31,2005CURRENT
                  ASSETSCash
              
              $
              448,412Accounts
                  receivable
              
              
              180,539Inventory
              
              
              27,130TOTAL
                  CURRENT ASSETS
              
              
              656,081Furniture
                  & Equipment, net
              
              
              26,023Deposit
              
              
              2,123TOTAL
                  ASSETS
              
              $
              684,227CURRENT
                  LIABILITIESAccounts
                  Payable & Accrued Expenses
              
              
              408,439Due
                  to Related Parties
              
              
              215,535Notes
                  Payable
              
              
              84,275Due
                  to Superclick
              
              
              450,000TOTAL
                  LIABILITIES
              
              
              1,158,249EQUITYMembers
                  Capital
              
              
              127,600Retained
                  Earnigs (deficit)
              
              
              (601,622
              )TOTAL
                  EQUITY
              
              
              (474,022
              )TOTAL
                  LIABILITIES AND EQUITY
              
              $
              684,227


F-32
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





The
      Statement of Operations of Hotel Net, LLC for the years ended August 31, 2005
      and 2004 was as follows:




Year
                  Ended August 31,2005
              
              2004REVENUESSales
              
              $
              972,930
              
              $
              420,540Support
                  revenue
              
              
              287,371
              
              
              68,574Other
              
              
              72,398
              
              
              1,294Total
                  revenue
              
              
              1,332,699
              
              
              490,408COSTS
                  OF GOODS SOLDLabor
                  and material
              
              
              856,427
              
              
              401,299Support
              
              
              291,878
              
              
              75,997Other
              
              
              —
              
              
              20,000Total
                  cost of goods sold
              
              
              1,148,305
              
              
              497,296GROSS
                  PROFIT(LOSS)
              
              
              184,394
              
              
              (6,888
              )Personnel
                  costs
              
              
              72,467
              
              
              17,774Contract
                  labor
              
              
              199,764
              
              
              70,500Telephone
              
              
              32,313
              
              
              17,884Marketing
                  & promotion
              
              
              24,284
              
              
              45,559Occupancy
              
              
              23,357
              
              
              7,619Travel,
                  meals & entertainment
              
              
              73,427
              
              
              23,503Insurance
              
              
              18,310
              
              
              1,069Office
                  expenses
              
              
              11,850
              
              
              8,797Legal
                  and professional fees
              
              
              37,317
              
              
              30,500Consultants
              
              
              15,280
              
              
              —Postage
                  & delivery
              
              
              13,841
              
              
              9,392Interest
                  expense
              
              
              2,588
              
              
              —Depreciation
              
              
              4,424
              
              
              —Web
                  hosting service
              
              
              3,620
              
              
              2,204Other
              
              
              4,457
              
              
              4,441TOTAL
                  EXPENSES
              
              
              537,299
              
              
              239,242NET
                  INCOME (LOSS)
              
              
              (352,905
              )
              
              (246,130
              )ACCUMULATED
                  DEFICIT, BEGINNING
              
              
              (248,717
              )
              
              (2,587
              )ACCUMULATED
                  DEFICIT ENDING
              
              $
              (601,622
              )
              $
              (248,717
              )
 NOTE
      P
      - ACQUISITION OF HOTEL NET, LLC (Continued)





The
      Statement of Members Equity Hotel Net, LLC for the years ended August 31, 2005
      and 2004 was as follows:


F-33
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
 TotalMember's
                
                Retained
                
                Member'sCapital
                
                Earnings
                
                EquityAugust
                    31, 2003
                
                
                32,048
                
                
                (2,587
                )
                
                29,461Member
                    contributions
                
                
                86,552
                
                
                
                
                
                86,552Net
                    loss
                
                
                
                
                
                (246,130
                )
                
                (246,130
                )August
                    31, 2004
                
                $
                118,600
                
                $
                (248,717
                )
                $
                (130,117
                )Member
                    contributions
                
                
                9,000
                
                
                
                
                
                9,000Net
                    loss
                
                
                
                
                
                (352,905
                )
                
                (352,905
                )August
                    31, 2005
                
                $
                127,600
                
                $
                (601,622
                )
                $
                (474,022
                )




NOTE
      P
      - ACQUISITION OF HOTEL NET, LLC (Continued)





The
      Statement of Cash Flows of Hotel Net, LLC for the years ended August 31, 2005
      and 2004 was as follows:


F-34
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
 Year
                    Ended August 31,2005
                
                2004CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    loss
                
                $
                (352,905
                )
                $
                (246,130
                )Adjustments
                    to reconcile net losstonet
                    cash used by operating activities:Depreciation
                
                
                4,424
                
                
                —CHANGES
                    IN CURRENT ASSETS AND CURRENTLIABILITIES:(Increase)
                    decrease in current liabilities:Accounts
                    receivable
                
                
                51,612
                
                
                (48,992
                )Inventory
                
                
                31,317
                
                
                (58,447
                )Deposit
                
                
                —
                
                
                2,123Increase
                    (decrease) in current liabilities:Accounts
                    payable and accrued expenses
                
                
                121,152
                
                
                116,238Due
                    to related parties
                
                
                65,363
                
                
                150,172Due
                    to Superclick
                
                
                450,000
                
                
                —Net
                    Cash <Used> Provided by Operating Activities
                
                
                370,963
                
                
                (85,036
                )CASH
                    FLOWS FROM INVESTING ACTIVITIES:Acquisition
                    of furniture and equipment
                
                
                (23,188
                )
                
                (7,259
                )Net
                    Cash <Used> Provided by Investing Activities
                
                
                (23,188
                )
                
                (7,259
                )CASH
                    FLOWS FROM FINANCING ACTIVITIES:Issuance
                    of notes payable
                
                
                84,275
                
                
                —Increase
                    in members capital
                
                
                9,000
                
                
                96,459Net
                    Cash Provided by Financing Activities
                
                
                93,275
                
                
                96,459NET
                    INCREASE (DECREASE) IN CASH
                
                
                441,050
                
                
                4,164CASH,
                    beginning of period
                
                
                7,362
                
                
                3,198CASH,
                    end of period
                
                $
                448,412
                
                $
                7,362
 F-35
 **Back
            to Table of
            Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements





The
      following unaudited, summarized, consolidated, pro forma balance sheets and
      statements of revenue and expenses assumes the acquisition occurred as of
      November 1, 2003 and November 1, 2004. Proforma results are displayed for the
      nine month periods November 1, 2004 through July 31, 2005 (based on the interim
      reporting period for the parent) and November 1, 2003 through July 31, 2004
      and
      for the twelve month period ending October 31, 2004. No pro forma information
      is
      provided for the year ending October 31, 2005 as Hotel Net is incorporated
      into
      the primary consolidated financial statements of Superclick, Inc., including
      operations from September 1, 2005 through October 31, 2005. The unaudited pro
      forma consolidating financial statements are based on available information
      and
      do not purport to represent what the results of operations actually would have
      been if the events described had occurred as of the dates indicated or what
      such
      results will be for any future periods.


F-36
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements (Continued)


**Superclick,
                  Inc.**Consolidated
                  Pro Forma Balance Sheet (unaudited)July
                  31, 2005HotelNet,
                  LLC
              
              Superclick,
                  Inc.
              
              
              
              July
                  31, 2005July
                  31,
              
              July
                  31,
              
              Pro
                  Forma
              
              Pro
                  Forma2005
              
              2005
              
              Entries
              
              ConsolidatedCash
              
              $
              6,012
              
              $
              53,729
              
              $
              (450,000
              )
              $
              (390,259
              )Accounts
                  receivable
              
              
              307,183
              
              
              536,245
              
              
              
              
              
              843,428Inventory
                  and other current assets
              
              
              39,773
              
              
              219,481
              
              
              
              
              
              259,254Property
                  and equipment, net
              
              
              28,253
              
              
              143,956
              
              
              
              
              
              172,209Other
                  non-current assets
              
              
              2,123
              
              
              35,281
              
              
              
              
              
              37,404Goodwill
              
              
              
              
              
              960,000
              
              
              1,535,171
              
              
              2,495,171Total
                  assets:
              
              $
              383,344
              
              $
              1,948,692
              
              $
              1,085,171
              
              $
              3,417,207CURRENT
                  LIABILITIES:Accounts
                  payable and accrued liabilites
              
              $
              453,605
              
              $
              480,700
              
              $
              (22,590
              )
              $
              911,715Deferred
                  revenue
              
              
              
              
              
              188,712
              
              
              
              
              
              188,712Due
                  <from> to related entity
              
              
              
              
              
              
              
              
              
              
              
              —Notes
                  payable
              
              
              84,275
              
              
              
              
              
              (84,275
              )
              
              —Notes
                  payable to related parties
              
              
              215,535
              
              
              
              
              
              (215,535
              )
              
              —Notes
                  payable to former shareholders
              
              
              
              
              
              
              
              
              
              
              
              —of
                  HotelNet, LLC
              
              
              
              
              
              
              
              
              350,000
              
              
              350,000Total
                  liabilities:
              
              
              753,415
              
              
              669,412
              
              
              27,600
              
              
              1,450,427STOCKHOLDERS'
                  EQUITY:Common
                  stock $.0006 par value;121,000,000
                  shares authorized,27,096,132
                  shares issued and outstanding
              
              
              
              
              
              16,257
              
              
              750
              
              
              17,007Additional
                  paid-in capital
              
              
              
              
              
              3,635,493
              
              
              686,750
              
              
              4,322,243Treasury
                  Stock
              
              
              
              
              
              (15,140
              )
              
              
              
              
              (15,140
              )Common
                  stock subscribed
              
              
              
              
              
              —
              
              
              
              
              
              —Member's
                  Equity
              
              
              127,600
              
              
              
              
              
              (127,600
              )
              
              —Cumulative
                  translation adjustment gain
              
              
              
              
              
              66,962
              
              
              
              
              
              66,962Deficit
                  accumulated duringthe
                  development stage
              
              
              (497,671
              )
              
              (2,424,292
              )
              
              497,671
              
              
              (2,424,292
              )(370,071
              )
              
              1,279,280
              
              
              1,057,571
              
              
              1,966,780Total
                  stockholders' equityand
                  liabilities:
              
              $
              383,344
              
              $
              1,948,692
              
              $
              1,085,171
              
              $
              3,417,207
 
 (1)
              Represents
                  cash paid to Hotel Net upon the execution of the definitive agreement
                  for
                  the benefit of Hotel Net shareholder’s and repayment of noteholder’s and
                  related acqusition liabilities
 (2)
                Totals
                    $450,000 and represents repayment of members capital accounts
                    ($127,600),
                    notes payable to related parties ($215,535), notes payable ($84,275)
                    and
                    acqusition related costs in accounts payable
                    ($22,590).
 (3)
                In
                    addition to the $960,000 issued to Hotel Net in the form of common
                    stock
                    during the period ended July 31, 2005, the Company issued an
                    additional
                    1,250,000 shares with a value of $687,500 ($750 to common stock
                    and
                    $686,750 to Additional Paid in Capital) in addition to $450,000
                    in cash,
                    $350,000 payable to Hotel Net shareholders, $22,590 of acquisition
                    liabilities, and elimination of the accumulated deficit prior
                    to the
                    acquisition.


F-37
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements (Continued)


**Superclick,
                  Inc.**Consolidated
                  Pro Forma Statement of Revenue and Expense (unaudited)Nine
                  Months Ended July 31, 2005HotelNet
              
              Superclick
              
              Consolidated11/1/2004
              
              11/1/2004
              
              11/1/2004through
              
              through
              
              through7/31/2005
              
              7/31/2005
              
              7/31/2005Net
                  sales
              
              $
              1,076,681
              
              $
              2,555,266
              
              $
              3,631,947Cost
                  of goods sold
              
              
              899,523
              
              
              1,462,673
              
              
              2,362,196Gross
                  profit
              
              
              177,158
              
              
              1,092,593
              
              
              1,269,751ExpensesCompensation
              
              
              49,210
              
              
              1,169,311
              
              
              1,218,521Marketing
              
              
              21,330
              
              
              80,069
              
              
              101,399Travel
              
              
              69,700
              
              
              162,384
              
              
              232,084Professional
                  fees
              
              
              215,737
              
              
              299,237
              
              
              514,974Office
                  expense
              
              
              27,663
              
              
              174,891
              
              
              202,554Insurance
              
              
              14,875
              
              
              
              
              
              14,875Telephone
                  expense
              
              
              24,568
              
              
              62,423
              
              
              86,991Other
                  selling, general and admin
              
              
              12,487
              
              
              14,746
              
              
              27,233Investor
                  relations
              
              
              —
              
              
              71,864
              
              
              71,864Director
                  compensation
              
              
              —
              
              
              51,103
              
              
              51,103Interest
              
              
              2,588
              
              
              
              
              
              2,588Depreciation
              
              
              4,424
              
              
              31,786
              
              
              36,210Commissions
              
              
              
              
              
              42,796
              
              
              42,796Total
                  expenses
              
              
              442,582
              
              
              2,160,610
              
              
              2,603,192Net
                  (loss)
              
              $
              (265,424
              )
              $
              (1,068,017
              )
              $
              (1,333,441
              )Net
                  (loss) per common shareBasic
                  and diluted
              
              
              
              
              $
              (0.038
              )
              $
              (0.048
              )Weighted
                  average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              25,213,880
              
              
              25,213,880Shares
                  to be issued for acqusition
              
              
              
              
              
              2,750,000
              
              
              2,750,000Total
                  Weighted average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              27,963,880
              
              
              27,963,880





F-38


**Back
        to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements (Continued)


**Superclick,
                  Inc.**Consolidated
                  Pro Forma Statement of Revenue and Expense (unaudited)Nine
                  Months Ended July 31, 2004HotelNet
              
              Superclick
              
              Consolidated11/1/2003
              
              11/1/2003
              
              11/1/2003through
              
              through
              
              through7/31/2004
              
              7/31/2004
              
              7/31/2004Net
                  sales
              
              $
              536,717
              
              $
              1,319,672
              
              $
              1,856,389Cost
                  of goods sold
              
              
              455,726
              
              
              906,985
              
              
              1,362,711Gross
                  profit
              
              
              80,991
              
              
              412,687
              
              
              493,678ExpensesResearch
                  and development
              
              
              17,086
              
              
              
              
              
              17,086Compensation
              
              
              88,274
              
              
              394,866
              
              
              483,140Marketing
              
              
              30,307
              
              
              27,837
              
              
              58,144Travel
              
              
              23,503
              
              
              95,155
              
              
              118,658Professional
                  fees
              
              
              30,500
              
              
              231,975
              
              
              262,475Office
                  expense
              
              
              15,967
              
              
              9,147
              
              
              25,114Insurance
              
              
              1,069
              
              
              45,344
              
              
              46,413Telephone
                  expense
              
              
              17,884
              
              
              43,864
              
              
              61,748Other
                  selling, general and admin
              
              
              11,383
              
              
              15,807
              
              
              27,190Investor
                  relations
              
              
              
              
              
              100,195
              
              
              100,195Director
                  compensation
              
              
              
              
              
              233,019
              
              
              233,019Interest
              
              
              4,617
              
              
              2,071
              
              
              6,688Depreciation
              
              
              
              
              
              12,384
              
              
              12,384Total
                  expenses
              
              
              240,590
              
              
              1,211,664
              
              
              1,452,254Net
                  (loss)
              
              $
              (159,599
              )
              $
              (798,977
              )
              $
              (958,576
              )Net
                  (loss) per common shareBasic
                  and diluted
              
              
              
              
              $
              (0.029
              )
              $
              (0.034
              )Weighted
                  average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              25,213,880
              
              
              25,213,880Shares
                  to be issued for acqusition
              
              
              
              
              
              2,750,000
              
              
              2,750,000Total
                  Weighted average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              27,963,880
              
              
              27,963,880




F-39
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements (Continued)




**Superclick,
                  Inc.**Consolidated
                  Pro Forma Balance Sheet (unaudited)October
                  31, 2004HotelNet,
                  LLC
              
              Superclick,
                  Inc.
              
              
              
              
              
              October
                  31, 2004October
                  31,
              
              October
                  31,
              
              
              
              Pro
                  Forma
              
              Pro
                  Forma2004
              
              2004
              
              
              
              Entries
              
              ConsolidatedCash
              
              $
              9,169
              
              $
              475,479
              
              
              (1
              )
              $
              (450,000
              )
              $
              34,648Accounts
                  receivable
              
              
              251,873
              
              
              1,182,002
              
              
              
              
              
              
              
              
              1,433,875Inventory
                  and other current assets
              
              
              70,633
              
              
              397,750
              
              
              
              
              
              
              
              
              468,383Property
                  and equipment, net
              
              
              7,259
              
              
              153,036
              
              
              
              
              
              
              
              
              160,295Other
                  non-current assets
              
              
              2,123
              
              
              35,432
              
              
              
              
              
              
              
              
              37,555Goodwill
              
              
              
              
              
              —
              
              
              (3
              )
              
              2,301,149
              
              
              2,301,149Total
                  assets:
              
              $
              341,057
              
              $
              2,243,699
              
              
              
              
              $
              1,851,149
              
              $
              4,435,905CURRENT
                  LIABILITIES:Accounts
                  payable and accrued liabilites
              
              $
              366,934
              
              $
              830,350
              
              
              (2
              )
              $
              (172,228
              )
              $
              1,025,056Deferred
                  revenue
              
              
              
              
              
              515,194
              
              
              
              
              
              
              
              
              515,194Due
                  <from> to related entity
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              —Notes
                  payable
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              —Notes
                  payable to related parties
              
              
              150,172
              
              
              
              
              
              (2
              )
              
              (150,172
              )
              
              —Notes
                  payable to former shareholders
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              —of
                  HotelNet, LLC
              
              
              
              
              
              
              
              
              (3
              )
              
              350,000
              
              
              350,000Total
                  liabilities:
              
              
              517,106
              
              
              1,345,544
              
              
              
              
              
              27,600
              
              
              1,890,250STOCKHOLDERS'
                  EQUITY:Common
                  stock $.0006 par value;121,000,000
                  shares authorized,24,197,002
                  shares issued and outstanding
              
              
              
              
              
              14,518
              
              
              (3
              )
              
              1,650
              
              
              16,168Additional
                  paid-in capital
              
              
              
              
              
              1,990,268
              
              
              (3
              )
              
              1,645,850
              
              
              3,636,118Treasury
                  Stock
              
              
              
              
              
              —
              
              
              
              
              
              
              
              
              —Common
                  stock subscribed
              
              
              
              
              
              232,000
              
              
              
              
              
              
              
              
              232,000Member's
                  Equity
              
              
              127,600
              
              
              
              
              
              (2
              )
              
              (127,600
              )
              
              —Cumulative
                  translation adjustment gain
              
              
              
              
              
              17,644
              
              
              
              
              
              
              
              
              17,644Deficit
                  accumulated duringthe
                  development stage
              
              
              (303,649
              )
              
              (1,356,275
              )
              
              (3
              )
              
              303,649
              
              
              (1,356,275
              )(176,049
              )
              
              898,155
              
              
              
              
              
              1,823,549
              
              
              2,545,655Total
                  stockholders' equityand
                  liabilities:
              
              $
              341,057
              
              $
              2,243,699
              
              
              
              
              $
              1,851,149
              
              $
              4,435,905
 
 (1)
              Represents
                  cash paid to Hotel Net upon the execution of the definitive agreement
                  for
                  the benefit of Hotel Net shareholder’s and repayment of noteholder’s and
                  related acqusition liabilities.
 (2)
                Totals
                    $450,000 and represents repayment of members capital accounts
                    ($127,600),
                    notes payable to related parties ($150,172), and acquisition
                    related
                    liabilities.
 (3)
                The
                    Company issued 2,750,000 shares of common stock to the shareholders
                    of
                    Hotel Net ($1,650 to common stock and $1,645,850 to Additional
                    Paid in
                    Capital), in addition to $450,000 in cash and $350,000 payable
                    to Hotel
                    Net and elimination of the accumulated deficit prior to the acquistion.


F-40
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        P
        - ACQUISITION OF HOTEL NET, LLC (Continued)





Unaudited
      Pro Forma Consolidating Financial Statements (Continued)


**Superclick,
                  Inc.**Consolidated
                  Pro Forma Statement of Revenue and Expense (unaudited)Year
                  Ended October 31, 2004HotelNet
              
              Superclick
              
              Consolidated11/1/2003
              
              11/1/2003
              
              11/1/2003through
              
              through
              
              through10/31/2004
              
              10/31/2004
              
              10/31/2004(restated)Net
                  sales
              
              $
              700,493
              
              $
              2,552,739
              
              $
              3,253,232Cost
                  of goods sold
              
              
              592,545
              
              
              1,842,731
              
              
              2,435,276Gross
                  profit
              
              
              107,948
              
              
              710,008
              
              
              817,956Operating
                  ExpensesResearch
                  and development
              
              
              17,086
              
              
              136,610
              
              
              153,696Compensation
              
              
              130,396
              
              
              584,400
              
              
              714,796Professional
                  fees
              
              
              30,500
              
              
              225,931
              
              
              256,431Office
                  expense
              
              
              54,223
              
              
              195,245
              
              
              249,468Travel
              
              
              28,987
              
              
              94,082
              
              
              123,069Directors
                  compensation
              
              
              —
              
              
              197,154
              
              
              197,154Investor
                  relations
              
              
              —
              
              
              116,531
              
              
              116,531Other
                  selling, general and administrative
              
              
              41,464
              
              
              222,579
              
              
              264,043302,656
              
              
              1,772,532
              
              
              2,075,188Net
                  loss before tax benefit
              
              $
              (194,708
              )
              $
              (1,062,524
              )
              
              (1,257,232
              )Tax
                  benefit
              
              
              
              
              
              83,129
              
              
              83,129Net
                  (loss)
              
              $
              (194,708
              )
              
              (979,395
              )
              
              (1,174,103
              )Net
                  (loss) per common share (basic and diluted)
              
              
              
              
              $
              (0.035
              )
              $
              (0.042
              )Weighted
                  average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              25,213,880
              
              
              25,213,880Shares
                  to be issued for acqusition
              
              
              
              
              
              2,750,000
              
              
              2,750,000Total
                  Weighted average common shares outstandingBasic
                  and diluted
              
              
              
              
              
              27,963,880
              
              
              27,963,880





F-41


**Back
        to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  NOTE
        Q
        - COMMITMENTS AND CONTINGENCIES





Commitments





On
      October 1, 2004 the Company began a lease for office space. The lease extends
      through September 30, 2009 at a rate of $4,082 per month. The Company has also
      entered into non-cancelable operating leases for office equipment, and
      computers. Future lease payments under these operating leases are as
      follows:




Year
                  Ended October 31,2006
              
              $
              55,4842007
              
              
              55,0112008
              
              
              52,9372009
              
              
              48,525$
              211,957
 The
      Company incurred $65,980 and $20,234 in rent expense during the year ended
      October 31, 2005 and 2004, respectively.





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





Contingencies





Pursuant
      to the terms of the definitive agreement entered into by the Company for
      acquisition of Hotel Net, LLC certain founding members of Hotel Net, LLC will
      enter into an “earn-out” with the Company wherein if it meets certain sales
      objectives within the first year from the closing date of the acquisition,
      it
      will receive up to 2,000,000 additional shares of restricted common stock and
      $200,000 in cash (See Note I).





Debentures
      may be converted into common stock of the Company prior to maturity of the
      loan
      (See Note J).





NOTE
      R- EXTRAORDIANRY
      LOSS





The
      $2,447,500 extraordinary loss for the year ended October 31, 2005 occurred
      in
      the fourth quarter and represents the Company’s combined cash and stock
      investment in Hotel Net LLC. Pursuant to FASB 142, Goodwill and Other Intangible
      Assets, the Company evaluated the carry value of goodwill associated with the
      acquisition and determined that the full carry value was impaired due primarily
      to significantly lower than expected revenues, higher operating costs and the
      significant decrease in stock price shortly after the acquisition and related
      audit report date.


F-42
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
  As
        further evidence in support of goodwill impairment, the Hotel Net LLC office
        has
        been closed, and the Company no longer employs any Hotel Net LLC employees.





NOTE
      S
      - SUBSEQUENT EVENTS (Unaudited)





On
      January 5, 2006, the Company issued 187,500 shares of common stock to its
      directors in exchange for services valued at $22,500, or $0.12 per
      share.





NOTE
      T
      - RESTATEMENT





The
      10-KSB for Superclick, Inc. as of October 31, 2005 and 2004 has been restated.
      In July, 2006 we discovered that the initiation of amortization related to
      the
      warrant discount of $658,973 (See NOTE J) was missed. We determined that the
      discount requires amortization over the twelve month debenture term using the
      effective interest method. We calculated the 2005 amortization to be $143,990.
      The restatement resulted in an increase to net loss, an increase to the
      debenture liability and an increase in accumulated deficit of $143,990 for
      the
      year ended October 31, 2005.





The
      following information presents the impact of the warrant discount amortization
      as discussed above on the Company’s financial information as originally reported
      for the year ended October 31, 2005:


F-43
 **Back
          to Table of Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
 **SUPERCLICK,
                    INC.**Consolidated
                    Statements of OperationsFor
                    the Year Ended October 31, 2005(Restatement)Year
                    Ended October 31, 2005(Originally
                    Reported)
                
                (Restated)
                
                (Difference)RevenueNet
                    revenue
                
                
                3,205,696
                
                
                3,205,696
                
                
                —Cost
                    of goods sold
                
                
                2,395,515
                
                
                2,395,515
                
                
                —Gross
                    profit
                
                
                810,181
                
                
                810,181
                
                
                —Costs
                    and ExpensesTotal
                    costs and expenses
                
                
                2,768,795
                
                
                2,768,795
                
                
                —(Loss)
                    from operations
                
                
                (1,958,614
                )
                
                (1,958,614
                )
                
                —Interest
                    expense
                
                
                (48,513
                )
                
                (48,513
                )
                
                —Amortization
                    of beneficial conversion feature of convertible debentures
                
                
                (97,632
                )
                
                (97,632
                )
                
                —Amortization
                    of deferred financing costs
                
                
                (53,750
                )
                
                (53,750
                )
                
                —Amortization
                    of warrant discount
                
                
                —
                
                
                (143,990
                )
                
                (143,990
                )Derivative
                    gain (loss)
                
                
                465,774
                
                
                465,774
                
                
                —NET
                    LOSS BEFORE TAXES AND EXTRAORDINARY ITEM
                
                
                (1,692,735
                )
                
                (1,836,725
                )
                
                (143,990
                )Extraordinary
                    loss-write-off of goodwill from acquisition
                
                
                2,447,500
                
                
                2,447,500
                
                
                —NET
                    LOSS
                
                $
                (4,140,235
                )
                $
                (4,284,225
                )
                
                (143,990
                )Net
                    (loss) per common share Basic and diluted from continuing
                    operations
                
                $
                (0.064
                )
                $
                (0.069
                )
                $
                (0.005
                )Net
                    (loss) per common share basic and diluted after extraordinary
                    items
                
                $
                (0.157
                )
                $
                (0.162
                )
                $
                (0.005
                )Weighted
                    average common shares outstanding basic and diluted
                
                
                26,430,822
                
                
                26,430,822
                
                
                —
  F-44
 **Back
            to Table of
            Contents**




SUPERCLICK,
        INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
 **SUPERCLICK,
                    INC.**Consolidated
                    Statement of Stockholder's EquityFor
                    the Year Ended October 31, 2005(Restatement)Balances
                    on October 31, 2005(Originally
                    Reported)
                
                (Restated)
                
                (Difference)Common
                    Stock:Shares
                
                
                28,479,570
                
                
                28,479,570
                
                
                —Amount
                
                $
                17,035
                
                $
                17,035
                
                $
                —Additional
                    Paid-in-Capital
                
                $
                4,646,360
                
                $
                4,646,360
                
                $
                —Accumulated
                    Deficit
                
                $
                (5,496,510
                )
                $
                (5,640,500
                )
                $
                (143,990
                )Accumulated
                    Other Comprehensive Income (Loss)
                
                $
                66,278
                
                $
                66,278
                
                $
                —Treasury
                    Stock
                
                $
                (15,140
                )
                $
                (15,140
                )
                $
                —Total
                    Stockholder's Equity
                
                $
                (781,977
                )
                $
                (925,967
                )
                $
                (143,990
                )
  **SUPERCLICK,
                    INC.**Consolidated
                    Statements of Comprehensive Income (Loss)For
                    the Year Ended October 31, 2005(Restatement)Year
                    Ended October 31, 2005(Originally
                    Reported)
                
                (Restated)
                
                (Difference)Net
                    Earnings (Loss)
                
                $
                (4,140,235
                )
                $
                (4,284,225
                )
                $
                (143,990
                )Other
                    Comprehensive Income (Loss)Derivative
                    gain/(loss)
                
                
                465,774
                
                
                465,774
                
                
                —Foreign
                    Currency Translation Adjustment
                
                
                48,634
                
                
                48,634
                
                
                —Net
                    Comprehensive (Loss)
                
                $
                (3,625,827
                )
                $
                (3,769,817
                )
                $
                (143,990
                )


F-45
 **Back
          to Table of Contents**




SUPERCLICK,
      INC.


NOTES
          TO
          FINANCIAL STATEMENTS
 YEARS
          ENDED OCTOBER 31 2005 (Restated) AND 2004
 **SUPERCLICK,
                    INC.**Consolidated
                    Statements of Cash FlowsFor
                    the Year Ended October 31, 2005(Restatement)Year
                    ended October 31, 2005(Originally
                    Reported)
                
                (Restated)
                
                (Difference)CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    Earnings <loss>
                
                $
                (4,140,235
                )
                $
                (4,284,225
                )
                $
                (143,990
                )Adjustments
                    to reconcile net losstonet
                    cash used by operating activities:Depreciation
                
                
                52,841
                
                
                52,841
                
                
                —Compensation
                    expense on intrinsicvalue
                    of options issued
                
                
                263,566
                
                
                263,566
                
                
                —Stock
                    issued for services
                
                
                96,475
                
                
                96,475
                
                
                —Impairment
                    of goodwill
                
                
                2,447,500
                
                
                2,447,500
                
                
                —Amortization
                    of beneficial conversion feature
                
                
                97,632
                
                
                97,632
                
                
                —Amortization
                    of warrant discount
                
                
                —
                
                
                143,990
                
                
                143,990Derivative
                    gain on warrants issued with debentures
                
                
                (465,774
                )
                
                (465,774
                )
                
                —Deferred
                    tax benefitand
                    equipmentNet
                    change in current assets and current liabilities
                
                
                (190,620
                )
                
                (190,620
                )
                
                —NET
                    CASH USED FOR OPERATING ACTIVITIES
                
                
                (1,838,615
                )
                
                (1,838,615
                )
                
                —CASH
                    FLOWS FROM INVESTING ACTIVITIES
                
                
                (180,361
                )
                
                (180,361
                )
                
                —CASH
                    FLOWS FROM FINANCING ACTIVITIES
                
                
                2,009,537
                
                
                2,009,537NET
                    INCREASE IN CASH
                
                
                21,959
                
                
                21,959
                
                
                —CASH,
                    beginning of period
                
                
                475,479
                
                
                475,479
                
                
                —CASH,
                    end of period
                
                $
                497,438
                
                $
                497,438
                
                $
                —
  F-46