FORM 10-QSB

                     U.S. Securities and Exchange Commission
                              Washington, DC 20549

      |X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2005

      |_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from __________ to __________

                                    000-13822
                                    ---------
                            (Commission File Number)

                              NAYNA NETWORKS, INC.
                              --------------------
                    (formerly ResCon Technology Corporation)
                    ----------------------------------------
        (Exact name of small business issuer as specified in its charter)

              NEVADA                                   83-0210455
              ------                                   ----------
 (State or other jurisdiction of                     (IRS Employer
          incorporation)                           Identification No.)

                180 Rose Orchard Way, San Jose, California 95134
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (408) 956-8000
                                 --------------
              (Registrant's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                                 |X| Yes |_| No

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. Common stock, par value $.0001;
35,802,504 outstanding as of June 30, 2005.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

<PAGE>

                         PART I - FINANCIAL INFORMATION

      All financial information, with the exception of stock, are reported in
thousands (000's).

Item 1. Financial Statements

NAYNA NETWORKS, INC.
(a development stage enterprise)
BALANCE SHEET
(in thousands, except share and per share data)
--------------------------------------------------------------------------------
(Unaudited)

<TABLE>
<CAPTION>
                                                                           June 30,
ASSETS                                                                       2005
<S>                                                                        <C>
Current assets:
      Cash and cash equivalents                                            $    130
      Accounts receivable, net of allowance for doubtfuls of $33                137
      Prepaid expenses and other current assets                                  87
                                                                           --------
            Total current assets                                                354

Property and equipment, net                                                     251
Other assets                                                                    324

                                                                           --------
                 Total assets                                              $    929
                                                                           ========

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current liabilities
      Accounts payable                                                     $  1,141
      Accrued liabilities                                                       298
      Accrued payroll liabilities                                               481
      Notes payable                                                             646
                                                                           --------
      Current portion of capital lease obligations
            Total current liabilities                                         2,567

Notes payable
Bridge to common stock
Convertible debentures                                                        2,372

                                                                           --------
            Total liablities                                                  4,939
                                                                           --------

Stockholders' (deficit) equity Common stock, $0.001 par value:
         Authorized shares - 1,000,000,000; issued and outstanding
         shares - 35,802,504 at June 30, 2005                                    30
       Additional paid-in capital                                            51,981
      Deficit accumulated during the development stage                      (56,021)

                                                                           --------
            Total stockholders' (deficit) equity                             (4,011)
                                                                           --------

                                                                           --------
                 Total liabilities and stockholders' (deficit) equity      $    929
                                                                           ========
</TABLE>

See accompanied notes to these unaudited condensed financial statements

<PAGE>

NAYNA NETWORKS, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
(in thousands)
--------------------------------------------------------------------------------
(Unaudited)

<TABLE>
<CAPTION>
                                                                               Quarter Ended June 30,
                                                                          -------------------------------
                                                                              2005               2004
                                                                          ------------       ------------
<S>                                                                       <C>                <C>
Operating expenses:
     Research and development                                             $      1,184       $      1,008
     Business development                                                          223                301
     General and administrative                                                    261                135
                                                                          ------------       ------------
             Total operating expenses                                            1,669              1,444
                                                                          ------------       ------------

Loss from operations                                                            (1,669)            (1,444)

Interest income                                                                      0                  3
Interest expense                                                                    (8)                (1)
Gain on sale of assets                                                             370                 --
Merger related costs                                                               (78)                --
Impairment of goodwill and other intangible assets                                  --                 --
                                                                          ------------       ------------

             Net loss                                                     $     (1,385)      $     (1,442)
                                                                          ============       ============

Net loss per share - basic and diluted                                          (0.039)            (0.088)

Shares used in computing net loss per share - basic and diluted             35,804,502         16,329,588
             2004 adjusted for the 1:5.9 reverse split that occurred
             immediately prior to the April 1, 2005 merger
</TABLE>

See accompanied notes to these unaudited condensed financial statements

<PAGE>

NAYNA NETWORKS, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
(in thousands)
--------------------------------------------------------------------------------
(Unaudited)

<TABLE>
<CAPTION>
                                                                                                                 Cumulative
                                                                                                                Period from
                                                                                                                February 10,
                                                                                                               2000 (date of
                                                                             Six Months Ended June 30,         inception) to
                                                                          -------------------------------          June 30,
                                                                              2005               2004               2005
                                                                          ------------       ------------       ------------
<S>                                                                       <C>                <C>                <C>
Operating expenses:
     Research and development                                             $      1,909       $      2,319       $     40,859
     Business development                                                          422                607              3,033
     General and administrative                                                    426                300              7,960
                                                                          ------------       ------------       ------------
             Total operating expenses                                            2,758              3,226             51,852
                                                                          ------------       ------------       ------------

Loss from operations                                                            (2,758)            (3,226)           (51,852)

Interest income                                                                     --                  8              2,390
Interest expense                                                                   (16)               (33)              (848)
Gain on sale of assets                                                             370                 --                358
Merger related costs                                                              (235)                --               (235)
Impairment of goodwill and other intangible assets                                  --                 --             (5,834)
                                                                          ------------       ------------       ------------

             Net loss                                                     $     (2,639)      $     (3,251)      $    (56,021)
                                                                          ============       ============       ============

Net loss per share - basic and diluted                                          (0.095)            (0.199)

Shares used in computing net loss per share - basic and diluted             27,749,728         16,329,588
             2004 adjusted for the 1:5.9 reverse split that occurred
             immediately prior to the April 1, 2005 merger
</TABLE>

See accompanied notes to these unaudited condensed financial statements

<PAGE>

NAYNA NETWORKS, INC.
(a development stage enterprise)
STATEMENTS OF CASH FLOWS
(in thousands)
--------------------------------------------------------------------------------
(Unaudited)

<TABLE>
<CAPTION>
                                                                                                                Cumulative
                                                                                                               Period from
                                                                                                               February 10,
                                                                                                              2000 (date of
                                                                                  Six Months Ended June 30,   inception) to
                                                                                 --------------------------      June 30,
                                                                                     2005           2004           2005
                                                                                  ----------     ----------     ----------
<S>                                                                               <C>            <C>            <C>
Cash flows from operating activities :
Net loss                                                                          $   (2,639)    $   (3,251)    $  (56,021)
Adjustments to reconcile net loss to net cash used in operations:
    Noncash charges related to stock options granted to consultants and
      accelerated vesting of employee stock options                                       --             --             40
    Depreciation and amortization                                                        286            308          4,037
    Amortization of discount on warrants associated with equipment financing              --             17            202
    Impairment of goodwill related to acquisitions                                        --             --          5,834
    Loss (gain) on sale of property and equipment                                       (370)            --            756

    Changes in operating assets and liabilities:
      Restricted cash                                                                     49             --             --
      Accounts receivable                                                                 23             17           (137)
      Prepaid expenses and other current assets                                          (52)           (16)           (87)
      Other assets                                                                        23             (2)             6
      Accounts payable                                                                   486            179          1,141
      Accrued liabilities                                                                 65            (76)           305
      Accrued payroll liabilities                                                        186             37            481
                                                                                  ----------     ----------     ----------
          Net cash used in operating activities                                       (1,943)        (2,787)       (43,442)
                                                                                  ----------     ----------     ----------

Cash flows from investing activities :
    Purchase of property and equipment                                                    (1)            (3)        (1,239)
    Proceeds from sale of property and equipment                                         301             --            746
    Costs associated with acquisition of Xpeed, Inc.                                      --             --         (3,685)
                                                                                  ----------     ----------     ----------
          Net cash used in investing activities                                          301             (3)        (4,178)
                                                                                  ----------     ----------     ----------

Cash flows from financing activities :
    Proceeds from (repayments on) loan facility                                         (377)          (304)           (50)
    Payments on capital lease obligations and loan facility                               (9)           (97)        (5,598)
    Proceeds from issuance of common stock, net of repurchases                            --             --            243
    Proceeds from issuance of Series A redeemable convertible
      preferred stock, net of issuance costs                                              --             --         11,953
    Proceeds from issuance of Series B redeemable convertible
      preferred stock, net of issuance costs                                              --             --         35,897
    Proceeds from issuance of Series D redeemable convertible
      preferred stock, net of issuance costs                                              --          1,952          3,399
    Issuance of convertible debt                                                       1,450             --          2,072
    Restricted cash                                                                       --             --           (165)
                                                                                  ----------     ----------     ----------
          Net cash provided (used) by financing activities                             1,064          1,550         47,750
                                                                                  ----------     ----------     ----------

Net decrease in cash and cash equivalents                                               (578)        (1,240)           130

Cash and cash equivalents at beginning of period                                         709          1,663             --

Cash and cash equivalents at end of period                                        $      130     $      423     $      130
                                                                                  ==========     ==========     ==========
</TABLE>

See accompanied notes to these unaudited condensed financial statements

<PAGE>

                     Notes to Condensed Financial Statements
                                  June 30, 2005

NOTE 1: BASIS OF PRESENTATION

The accompanying condensed financial statements have been prepared without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These interim financial statements include all
adjustments, which in the opinion of management, are necessary in order to make
the financial statements not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Transition Report on Form 10-KSB for the
transition period from August 31, 2004 to December 31, 2004 filed with the
Commission on August 16, 2005 and the Company's Current Report on Form 8-K filed
with the Commission on April 8, 2005, as amended on April 18, April 20, April 26
and July 29, 2005.

The information contained herein has been prepared by Nayna Networks, Inc. (the
"Company") in accordance with the rules of the Securities and Exchange
Commission. The information at June 30, 2005 and for the three and six month
periods ended June 30, 2005 is unaudited. The consolidated financial statements
reflect all adjustments, consisting of only normal recurring accruals, which
are, in the opinion of management, necessary for a fair statement of the results
of the interim periods presented.

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. These estimates and assumptions affect the reported
amounts of assets, liabilities, revenues, expenses and disclosures of contingent
assets and liabilities. Actual results could differ from these estimates.
Significant estimates include revenue recognition, inventory valuation, useful
lives and the valuation of long-lived assets.

<PAGE>

NOTE 2: CRITICAL ACCOUNTING POLICIES

Development Stage

Since its inception although the Company has commenced its principal operations,
it has not achieved a sufficient level of sales and market demand to become an
established operating enterprise. Therefore, as per the Statement of Financial
Accounting Standards ("SFASB") No. 7, "Accounting and Reporting by Development
Stage Enterprises", the Company is being classified as a development stage
enterprise. Successful completion of the Company's development program and
ultimately the attainment of profitable operations is dependent on future
events, including the maintaining adequate financing to fulfill its development
activities, and achieving a level of sales adequate to support the Company's
cost structure.

The Company has experienced net losses since its inception and had an
accumulated deficit of $56,021 at June 30, 2005. Such losses are attributable to
cash and non-cash expenses resulting from costs incurred in the development of
the Company's products and infrastructure. The Company expects operating losses
to continue for the foreseeable future as it continues to develop and promote
its products. The Company will require additional funding and may sell
additional shares of its common stock or preferred stock through private
placement or public offerings. There can be no assurance that the Company will
be able to obtain additional debt or equity financing, if and when needed, on
terms acceptable to the Company, if at all. Any additional equity or debt
financing may involve substantial dilution to the Company's stockholders,
restrictive covenants or high interest costs. The failure to raise needed funds
on sufficiently favorable terms could have a material adverse effect on the
Company's business, operating results and financial condition. The Company's
long-term liquidity also depends upon its ability to increase revenues from the
sale of its products and achieve profitability. The failure to achieve these
goals could have a material adverse effect on the operating results and
financial condition of the Company.

Successful outcome of future activities cannot be determined at this time due to
the current market conditions and there are no assurances that, if achieved, the
Company will have sufficient funds to execute its intended business plan or
generate positive operating results.

Inventory valuation

As a continuing development stage enterprise, the Company expenses all
inventories to research and development until such time as commercial revenues
commence.

Impairment of long-lived assets

The Company evaluates its long-lived assets, including property and equipment,
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. When the sum of the present
value of future net cash flows expected to result from the use of the asset and
its eventual disposition is less than its carrying amount, an impairment loss
would be measured based on the discounted cash flows compared to the carrying
amount. No impairment charge has been recorded in any of the periods presented.

<PAGE>

Stock-Based Compensation

The Company accounts for its stock-based employee compensation using the
intrinsic-value method, which follows the recognition and measurement principles
of Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees", and Financial Accounting Standards Board ("FASB")
Interpretation ("FIN") No. 44, "Accounting for Certain Transactions Involving
Stock Compensation." Stock and other equity instruments issued to non-employees
are accounted for in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," and EITF Issue No. 96-18, "Accounting for Equity Instruments That
Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services," and are valued using the Black-Scholes model.

No stock-based employee compensation cost related to stock options is reflected
in net income (loss), as all options granted under stock-based compensation
plans had an exercise price equal to fair value of the underlying common stock
on each respective grant date.

NOTE 3: PREPAID EXPENSES

Prepaid expenses consist of the following at June 30, 2005:

                                               June 30, 2005

      Prepaid lease                           $          308
      Other                                               16
                                              --------------

      Balances as at June 30, 2005            $          324
                                              ==============

NOTE 4: PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):

                                               June 30, 2005

      Computer equipment                      $          450
      Computer software                                1,354
      Test equipment                                     173
      Furniture and fixtures                               2
                                              --------------

                                                       1,979
      Less: Accumulated depreciation                  (1,728)
                                              --------------

      Balances as at June 30, 2005            $          251
                                              ==============

<PAGE>

NOTE 5: DEBT

In April 2003, subsequent to the acquisition of Xpeed, Inc., the Company agreed
to pay off $5,904 towards liabilities of Xpeed, Inc.

Beginning in late 2004 and during this fiscal year the Company has continued to
fund operations through debt. As at June 30, 2005, the following amounts are
outstanding:

      Bridge loan                             $          424
      Accrued Xpeed liabilities                          225
                                              --------------

      Total Notes Payable                     $          768
      Convertible debentures                           2,372
                                              --------------

NOTE 6: NET LOSS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net loss by the
weighted average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur from common shares issuable
through stock options, warrants and other convertible securities, if dilutive.
The following table is a reconciliation of the numerator (net loss) and the
denominator (number of shares) used in the basic and diluted EPS calculations
and sets forth potential shares of common stock that are not included in the
diluted net loss per share calculation as their effect is antidilutive:

<TABLE>
<CAPTION>
                                                    Three months ended                     Six months ended
                                                June 30,           June 30,           June 30,           June 30,
                                                  2005               2004               2005               2004
<S>                                         <C>                <C>                <C>                <C>
Numerator - Basic and diluted               $     (1,385)      $     (1,442)      $     (2,639)      $     (3,251)

Denominator - basic and diluted
Weighted average common shares
outstanding                                   35,804,502         16,329,588         27,749,728         16,329,588

Net loss per share - basic and diluted            (0.039)            (0.088)            (0.095)            (0.199)

Antidilutive securities
   Options                                     1,593,426          1,297,031          1,841,551          1,297,031
   Warrants                                       88,600             88,600             88,600             88,600
</TABLE>

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

      This quarterly report on Form 10-QSB, including the following sections,
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. For this purpose any statements contained in this
Form 10-QSB that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, words such as "may,"
"will," "expect," "believe," "anticipate," "estimate" or "continue" or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
and the cautionary statements set forth below and those contained in the section
entitled "Risk Factors" identify important factors that could cause actual
results to differ materially from those predicted in any such forward-looking
statements. We caution investors that actual results may differ materially from
those projected in the forward-looking statements as a result of certain risk
factors identified in this Form 10-Q and other filings we have made with the
Securities and Exchange Commission.

OVERVIEW

Headquartered in San Jose, CA, Nayna Networks, Inc., ("Nayna" or the "Company")
is a hardware and software development company that designs, develops and
markets next generation broadband access solutions, also known as Ethernet in
the First Mile ("EFM") for the secure communications market.

Nayna was formed as a result of a merger and plan of reorganization (the
"Merger") between ResCon Technology Corporation ("Rescon") and Nayna Networks,
Inc. ("NNI"), a Delware corporation incorporated February 10, 2000. On April 1,
2005, NNI merged into Rescon in a stock-for-stock transaction. As a result of
the Merger, Rescon continued as the surviving corporation, assumed the
operations and business plan of NNI, the stockholders of NNI became stockholders
of Rescon, and Rescon changed its name to Nayna Networks, Inc. (trading symbol
OTC:BB:NAYN.OB). Rescon was incorporated on December 9, 1968, under the name
"Platte River Construction Company, Inc." and was organized to engage in and do
any lawful act concerning any or all lawful businesses for which corporations
may be organized.

The following discussion should be read in conjunction with the condensed
financial statements and notes thereto included elsewhere in this report.

Financial information for the period February 10, 2000 (date of inception) to
June 30, 2005 is the historical information of NNI. Financial information for
the three and six month periods ended June 30, 2005 is the historical financial
information of Nayna.

RESULTS OF OPERATIONS

All financial information, except for stock, is reported in thousands (000's).

<PAGE>

Revenues, Cost of Sales and Gross Profit

For the three and six month periods ended June 30, 2005 and June 30, 2004, the
Company did not have revenue, cost of sales or gross profit. As a development
stage company all revenues, generated by trial and evaluation sales, have been
classified as reduction of expenses.

Operating Expenses

Operating expenses for the three months ended June 30, 2005 and June 30, 2004
totaled $1,669 and $1,444 respectively. These expenses increased by $225 as a
result of the following:

      a)    Increased operations expenditures of $176 as a result of more trials
            and evaluations activity.
      b)    Decreased sales and marketing expenditures of $74 as a result
            decreasing the number of sales and marketing employees and focusing
            on large partners and channels.
      c)    Increased general and administration expenditures of $126 as a
            result of becoming a reporting enterprise.

Operating expenses for the six months ended June 30, 2005 and June 30, 2004
totaled $2,758 and $3,226 respectively. These expenses decreased primarily from
a reduction of employees.

As of June 30, 2005, the Company had an accumulated deficit since inception of
$56,021 and cash on hand of $130.

Other expenses

Other expenses, for the three months ended June 30, 2005 and June 30, 2004,
totaled $86 and $1 respectively. These expenses increased by $85 primarily as a
result of merger related costs of $78.

Other expenses, for the six months ended June 30, 2005 and June 30, 2004,
totaled $251 and $33 respectively. These expenses increased primarily as a
result of the merger related costs of $235.

Other Income

Other income, for the three months ended June 30, 2005 and June 30, 2004,
totaled $370 and $3 respectively. These incomes increased by $363 primarily as a
result of the gain on the sale of fixed assets of $370.

Other income, for the six months ended June 30, 2005 and June 30, 2004, totaled
$370 and $8 respectively. These incomes increased by $363 primarily as a result
of the gain on the sale of fixed assets of $370.

<PAGE>

Net Loss

As a result of the foregoing factors, for the three months ended June 30, 2005
and June 30, 2004, Nayna incurred a net loss of $1,385 and $1,442 respectively.

For the six months ended June 30, 2005 and June 30, 2004, Nayna incurred a net
loss of $2,639 and $3,251 respectively.

During the Company's continuing development phase, Nayna has sustained operating
losses and expects such losses to continue through the rest of fiscal 2005.

Liquidity and Capital Resources

      As the Company has limited working capital and limited cash on hand, and
as it is not currently realizing revenue from operations, the Company needs to
seek additional funding from third parties. This funding may be sought by means
of private equity or debt financing. The Company currently has no commitments
from any party to provide funding and there is no way to predict when, or if,
any such funding could materialize. There is no assurance that the Company will
be successful in obtaining additional funding on attractive terms, or at all. If
the Company is unsuccessful in obtaining additional debt or equity financing
during the third quarter of 2005, the Company may be unable to continue
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern.

Cash Flows

During the quarter ended June 30, 2005, cash was primarily used to fund Company
expenses. Cash on hand decreased approximately $578 during the six months ended
June 30, 2005. See below for additional discussion and analysis of cash flow.

<TABLE>
<CAPTION>
                                                      For the Six         For the Six
                                                      Months Ended        Months Ended
                                                     June 30, 2005       June 30, 2004
<S>                                                 <C>                 <C>
      Net cash from operating activities            $       (1,943)     $       (2,787)
      Net cash from investing activities            $          301      $           (3)
      Net cash from financing activities            $        1,064      $        1,550

      NET INCREASE/(DECREASE) IN CASH               $         (578)     $       (1,240)
</TABLE>

During the six months ended June 30, 2005, net cash used in operations was
$1,943, as net loss and gain on sale of fixed assets were only partially offset
by depreciation and increase in accounts payable and accrued payroll
liabilities. During the six months ended June 30, 2005, the Company realized
loan proceeds of $1,450.

<PAGE>

Business Combinations

On April 1, 2005, the Company closed the Merger and acquired 100% of the
outstanding capital stock of Nayna in exchange for the issuance of 32,249,997
shares of Company common stock to the Nayna stockholders, making them the
majority holders of the outstanding shares of the Company. In connection with
the Merger all outstanding shares of Preferred Stock of Nayna were converted
into common stock of the Company.

Founded in February 2000, Nayna Networks is a hardware and software development
company that designs, develops and markets next generation broadband access
solutions, also known as Ethernet In The First Mile solutions for the secure
communications market. Typical customers include carriers, Cable TV service
providers and municipal, defense and enterprise networks. Nayna's multi-gigabit
flagship platform, ExpressSTREAM, removes the performance bottlenecks typically
found in access networks. The high quality and rich feature set of Nayna's
solutions enables the gigabit class ExpressSTREAM platform to address a wide
variety of applications from the transport level up to and through the
application layer. Nayna, together with the companies which it has acquired, has
raised more than $65 million in venture capital investment over the past five
years, substantially all of which has been spent on product development. In
addition to continued internal development efforts, Nayna plans to augment its
product and service offerings through the acquisitions of complementary
companies in the secured communications solutions field including
infrastructure, software and services companies.

Nayna's solutions are based on proprietary hardware and software implementations
that are largely based on standard components. This methodology makes Nayna's
solutions more flexible and less costly and enables Nayna to address its
customer's needs swiftly without the cost or time required to make custom
silicon chips. These high-performance, cost-effective solutions are enhanced by
intelligent enforcement of Quality of Service, which we believe positions Nayna
to compete effectively in its target markets.

Following the Merger, we anticipate that our currently available funds are
sufficient to meet our needs for working capital, capital expenditures and
business expansion for the next three months. Thereafter, we will need to raise
additional funds. If any of our assumptions are incorrect, we may need to raise
capital before the end of three months. We cannot assure you that we will be
able to raise such additional capital on terms that are favorable to us or at
all. Any inability to raise these funds could have a material adverse effect on
our business, results of operations and financial condition.

On May 17, 2005, Nayna entered into an Agreement and Plan of Reorganization (the
"SSDI Acquisition Agreement") with South Seas Data, Inc. ("South Seas"), which
provides for the acquisition of SSDI. SSDI is a privately held company located
in Englewood, Colorado, that provides sophisticated, enterprise-class network
solutions and services.

<PAGE>

Under the terms of the SSDI Acquisition Agreement, SSDI will merge with a
wholly-owned subsidiary of Nayna and the holders of SSDI's securities will be
entitled to receive shares of Nayna common stock. Nayna will issue 600,000
shares to stockholders of SSDI at the closing. 350,000 of these shares will be
subject to adjustment based on the trading price of Nayna common stock over a
period of time prior to the effective date of their registration with the
Securities and Exchange Commission, as described in the SSDI Acquisition
Agreement. The transaction is subject to the approval of SSDI's stockholders,
applicable regulatory approval and other customary closing conditions and is
expected to close in September 2005.

SUBSEQUENT EVENTS

In August 2005, Dr. Raj Jain, our Chief Technology Officer ("CTO"), accepted a
professorship at Washington University at St. Louis. Dr. Jain will continue to
devote one day per week to his duties as CTO.

Risk Factors

We are a development stage company and have only a limited operating history on
which to evaluate our potential for future success.

We have only recently launched many of our products and services and therefore
have a limited operating history upon which you can evaluate our business and
future prospects. In addition, since we are a development stage company, we have
yet to develop sufficient experience in forecasting the actual revenues to be
received from the sale of our products and services. If we are unsuccessful in
addressing the risks and uncertainties commonly faced by development stage
companies, our business, results of operations and financial condition will be
materially and adversely affected.

We expect to incur operating losses for the foreseeable future.

We continue to incur operating losses due primarily to product development costs
and increasing sales and marketing expenses. In addition, we plan to invest
heavily in marketing and promotion, the hiring of additional employees and to
enhance our network content and management technologies through both internal
development efforts and strategic acquisitions. As a result of these
expenditures, we expect to incur net losses for a significant period of time. We
believe these expenditures are necessary to build and maintain hardware and
software technology and to penetrate our target product markets. If our revenue
growth is slower than we anticipate or our operating expenses exceed our
expectations, our losses will be significantly greater than they are at the
present time and we may never achieve profitability.

We will need to raise additional capital in the immediate future.

We anticipate that our currently available funds are sufficient to meet our
needs for working capital, capital expenditures and business expansion for the
next three months. Thereafter, we will need to raise additional funds. If any of
our assumptions are incorrect, we may need to raise capital before the end of
three months. We cannot assure you that we will be able to raise such additional
capital on terms that are favorable to us or at all. Such inability could have a
material adverse effect on our business, results of operations and financial
condition.

<PAGE>

Acquisitions may disrupt or otherwise have a negative impact on our business.

We may acquire or make investments in complementary businesses, products,
services or technologies on an opportunistic basis when we believe they will
assist us in carrying out our business strategy. Growth through acquisitions has
been a successful strategy used by other network control and management
technology companies. We plan to use this as a strategy to grow our business and
are in discussions with a number of parties relating to any such acquisition or
investment. If we buy a company, then we could have difficulty in assimilating
that company's personnel and operations. In addition, the key personnel of the
acquired company may decide not to work for us. An acquisition could distract
our management and employees and increase our expenses. Furthermore, we may have
to incur debt or issue equity securities to pay for any future acquisitions, the
issuance of which could be dilutive to our existing stockholders.

Our common stock price is likely to be highly volatile and the current market
for our common stock is limited.

The market price of our common stock will likely be highly volatile as the stock
market in general, and the market for small cap and micro cap technology
companies in particular, has been highly volatile. You may not be able to resell
your shares of our common stock following periods of volatility because of the
market's adverse reaction to volatility. We cannot assure you that our stock
will trade at the same levels of other stocks in our industry or that our
industry stocks in general will sustain their current market prices.

Factors that could cause such volatility may include, among other things:

      o     actual or anticipated fluctuations in our quarterly operating
            results;
      o     announcements of technological innovations;
      o     changes in financial estimates by securities analysts;
      o     conditions or trends in the network control and management industry;
      o     changes in the market valuations of other such industry related
            companies; and
      o     the acceptance of market makers and institutional investors of the
            Company and our stock.

In addition, our stock is currently traded on the NASD O-T-C Bulletin Board and
it is uncertain that we will be able to successfully apply for listing on the
American Stock Exchange or the NASDAQ National or Small Cap Markets in the
foreseeable future due to our inability to satisfy their respective listing
criteria. Failure to list our shares on any of the American Stock Exchange or
the NASDAQ National or Small Cap Markets will impair the liquidity of our common
stock.

<PAGE>

Your holdings may be diluted in the future.

We are authorized to issue up to 1,000,000,000 shares of common stock. Our board
of directors has the ability to issue additional shares of our common stock,
without stockholder approval and in exchange for the consideration that the
board of directors may deem adequate, up to such authorized amount. The issuance
of additional common stock will reduce the proportionate ownership and voting
power of our existing common stockholders. In addition, we currently have
outstanding options and warrants to purchase approximately 3,700,000 shares of
common stock whose exercise could also have a substantial dilutive effect on the
ownership of our common stockholders at such time. In addition, the future
designation and issuance of one or more series of preferred stock would create
additional securities that would have, among other things, dividend and
liquidation preferences senior to our common stock.

Shares eligible for future sale by our current stockholders may adversely affect
our stock price.

Sales of substantial amounts of common stock, including shares issued upon the
exercise of outstanding options and warrants, under Securities and Exchange
Commission Rule 144, or otherwise, could adversely affect the prevailing market
price of our common stock and could impair our ability to raise capital at that
time through the sale of our securities. In addition, we are obligated to
register the shares and additional securities for immediate resale under the
Securities Act of 1933, as amended, and, upon completion of such registration a
substantial number of additional securities will be placed into the public
market with the potential adverse consequences described above.

If we lose the services of our President and Chief Executive Officer Naveen
Bisht or other key personnel, we may not be able to execute our business
strategy effectively.

Our future success depends in large part upon the continued services of our key
technical, sales, marketing and senior management personnel. In particular,
Naveen Bisht, our President and Chief Executive Officer is very important to our
business. The loss of any of our senior management or other key research,
development, sales or marketing personnel, particularly if lost to competitors,
could harm our ability to implement our business strategy and respond to the
rapidly changing needs of our customers. In addition, we believe we will need to
attract, retain and motivate talented management and other highly skilled
employees to be successful. We may be unable to retain our key employees or
attract, assimilate and retain other highly qualified employees in the future.

We may not be able to compete successfully.

We are engaged in new, rapidly evolving and intensely competitive markets, and
we expect competition to intensify further in the future. We currently or
potentially compete with a number of other companies, such as Alcatel, Alloptic,
Inc., Salira Networks, Inc., Tellabs and TeraWave Communications. A number of
our competitors, such as Alcatel, are large and well funded. Competitive
pressures created by any one of these companies, or by our competitors
collectively, could have a material adverse effect on our business, results of
operations and financial condition.

<PAGE>

The market in which we compete is subject to rapid technological progress and to
compete successfully we must continually introduce new products that achieve
broad market acceptance.

The network equipment market is characterized by rapid technological progress,
frequent new product introductions, changes in customer requirements and
evolving industry standards. If we do not regularly introduce new products in
this dynamic environment, our product lines will become obsolete. Developments
in routers and routing software could also significantly reduce demand for our
products. Alternative technologies could achieve widespread market acceptance
and displace the technology on which we have based our product architecture. We
cannot assure you that our technological approach will achieve broad market
acceptance or that other technologies or devices will not supplant our own
products and technology.

Our products must comply with evolving industry standards and complex government
regulations or else our products may not be widely accepted, which may prevent
us from growing our net revenue or achieving profitability.

The market for network equipment is characterized by the need to support
industry standards as different standards emerge, evolve and achieve acceptance.
We will not be competitive unless we continually introduce new products and
product enhancements that meet these emerging standards. Our products must
comply with various United States federal government regulations and standards
defined by agencies such as the Federal Communications Commission, as well as
standards established by various foreign governmental authorities and
recommendations of the International Telecommunication Union. If we do not
comply with existing or evolving industry standards or if we fail to obtain
timely domestic or foreign regulatory approvals or certificates, we will not be
able to sell our products where these standards or regulations apply, which may
prevent us from sustaining our net revenue or achieving profitability.

Our future performance will depend on the successful development, introduction
and market acceptance of new and enhanced products.

Our new and enhanced products must address customer requirements in a timely and
cost-effective manner. In the past, we have experienced delays in product
development and such delays may occur in the future. The introduction of new and
enhanced products may cause our customers to defer or cancel orders for existing
products. Therefore, to the extent customers defer or cancel orders in the
expectation of new product releases, any delay in the development or
introduction of new products could cause our operating results to suffer. The
inability to achieve and maintain widespread levels of market acceptance for our
current and future products may significantly impair our revenue growth.

<PAGE>

Our limited ability to protect our proprietary intellectual property rights may
adversely affect our ability to compete.

We rely on a combination of patent, copyright, trademark and trade secret laws
and restrictions on disclosure to protect our proprietary intellectual property
rights. We cannot assure you that we have adequately protected our proprietary
intellectual property or that other parties will not independently develop
similar or competing products that do not infringe on our patents. We also enter
into confidentiality or license agreements with our employees, consultants and
corporate partners to protect our intellectual property. In addition, we control
access to and limit the distribution of our software, documentation and other
proprietary information. Despite our efforts to protect our proprietary
intellectual property rights, unauthorized parties may attempt to copy or
otherwise misappropriate or use our products or technology. If we are
unsuccessful in protecting our proprietary intellectual property rights, our
business, results of operations and financial condition may be harmed.

Our limited ability to defend ourselves against intellectual property
infringement claims made by others may adversely affect our ability to compete.

Our industry is characterized by the existence of a large number of patents and
frequent claims and related litigation regarding patent and other intellectual
property rights. If we are found to infringe the proprietary rights of others,
or if we otherwise settle such claims, we could be compelled to pay damages or
royalties and either obtain a license to those intellectual property rights or
alter our products so that they no longer infringe upon such proprietary rights.
Such a license could be very expensive to obtain or may not be available at all.
Similarly, changing our products or processes to avoid infringing the rights of
others may be costly or impractical. Litigation resulting from claims that we
are infringing the proprietary rights of others could result in substantial
costs and a diversion of resources, and could have a material adverse effect on
our business, financial condition and operating results.

Our dependence on contract manufacturers for substantially all of our
manufacturing requirements could harm our operating results.

We rely on independent contractors to manufacture our products. We do not have
long-term contracts with any of these manufacturers. Delays in product shipments
from contract manufacturers are not unusual. Similar or other problems may arise
in the future, such as inferior quality, insufficient quantity of products or
the interruption or discontinuance of operations of a manufacturer, any of which
could have a material adverse effect on our business, financial condition and
operating results.

We do not know whether we will effectively manage our contract manufacturers or
that these manufacturers will meet our future requirements for timely delivery
of products of sufficient quality and quantity. We will continue to monitor the
performance of our current contract manufacturers and if they are unable to meet
our future requirements, we will need to transition to other manufacturers. We
also intend to regularly introduce new products and product enhancements, which
will require that we rapidly achieve volume production by coordinating our
efforts with those of our suppliers and contract manufacturers. The inability of
our contract manufacturers to provide us with adequate supplies of high-quality
products or a reduction in the number of contract manufacturers may cause a
delay in our ability to fulfill orders and may have a material adverse effect on
our business, financial condition and operating results.

<PAGE>

If our products contain undetected software or hardware errors, we could incur
significant unexpected expenses and lose sales.

Network equipment products frequently contain undetected software or hardware
errors when new products, versions or updates of existing products are first
released to the marketplace. We have experienced such errors in connection with
prior product releases. We expect that such errors or component failures will be
found from time to time in the future in new or existing products, including the
components incorporated therein, after the commencement of commercial shipments.

These errors may have a material adverse effect on our business and may result
in the following, among other things:

      o     significant warranty and repair costs;
      o     diverting the attention of our engineering personnel from new
            product development efforts;
      o     delaying the recognition of revenue; and
      o     significant customer relations problems.

In addition, if our product is not accepted by customers due to defects, and
such returns exceed the amount we accrued for defect returns based on our
historical experience, our operating results would be adversely affected.

If problems occur in a computer or communications network, even if unrelated to
our products, we could incur unexpected expenses and lose sales.

Our products must successfully interoperate with products from other vendors. As
a result, when problems occur in a computer or communications network, it may be
difficult to identify the sources of these problems. The occurrence of hardware
and software errors, whether or not caused by our products, could result in the
delay or loss of market acceptance of our products and any necessary revisions
may cause us to incur significant expenses. The occurrence of any such problems
would likely have a material adverse effect on our business, financial condition
and operating results.

<PAGE>

We expect the average selling prices of our products to decrease, which may
reduce our gross margin or revenue.

The network equipment industry has experienced a rapid erosion of average
selling prices due to a number of factors, including competitive pricing
pressures, promotional pricing, technological progress and lower selling prices
as companies attempt to liquidate excess inventory resulting from the industry
slowdown that began in the later part of 2000.

We anticipate that the average selling prices of our products will decrease in
the future in response to the following, among other things:

      o     competitive pricing pressures;
      o     excess inventories;
      o     increased sales discounts; and
      o     new product introductions by us or our competitors.

We may experience substantial decreases in future operating results due to the
erosion of our average selling prices. We expect competitive pressures to
increase as a result of the industry slowdown that began in the later part of
2000, coupled with the slow recovery and still uncertainty of the broader
economy.

Some of our customers may not have the resources to pay for our products as a
result of the current economic environment.

Some of our customers are experiencing cash flow problems as a result of the
current economic environment and are finding it increasingly difficult to obtain
financing. As a result, we may be unable to collect the payments owed to us, or
such payments may be significantly delayed, if our customers are unsuccessful in
generating sufficient revenue or securing alternate financing arrangements. In
addition, our customers may not order as many products from us as we had
originally forecast or they may cancel their orders with us entirely. The
inability of some of our potential customers to pay us for our products may
adversely affect our cash flow, the timing of our revenue recognition and the
amount of revenue we generate, which may cause our stock price to decline.

Failure to successfully expand our sales and support teams or educate them in
regard to technologies and our product families may harm our business, financial
condition and operating results.

The sale of our products and services requires a sophisticated sales effort that
frequently involves several levels within a prospective customer's organization.
We may not be able to increase net revenue unless we expand our sales and
support teams in order to address all of the customer requirements necessary to
sell our products.

We cannot assure you that we will be able to successfully integrate new
employees into our company or to educate current and future employees in regard
to rapidly evolving technologies and our product families. A failure to do so
may hurt our business, financial condition and operating results.

<PAGE>

We must continue to develop and increase the productivity of our sales and
distribution channels to increase net revenue and improve our operating results.

Our sales channel includes our own direct sales people, large original equipment
manufacturer, system integrators, agents, resellers and distributors. Outside
sales channels require us to develop and cultivate strategic relationships and
allocate substantial internal resources for the maintenance of such
relationships. We may not be able to increase gross revenues unless we expand
our sales channel and support teams to handle all of our customer requirements
in a professional manner. If we are unable to expand our sales channel and
support teams in a timely manner, and/or manage them in all cases, our business,
financial condition and operating results may be hurt.

In addition, many of our sales channel partners also carry products they make
themselves or that are made by our competitors. We cannot assure you that our
sales channel partners will continue to market or sell our products effectively
or continue to devote the resources necessary to provide us with effective
sales, marketing and technical support. Their failure to do so may hurt our
revenue growth and operating results.

Legislative actions, higher insurance costs and potential new accounting
pronouncements are likely to impact our future financial position and results of
operations.

There have been regulatory changes, including the Sarbanes-Oxley Act of 2002,
which will have an impact on our future financial position and results of
operations. The Sarbanes-Oxley Act of 2002 and other rule changes and proposed
legislative initiatives are resulting in increased general and administrative
costs to us. The new rules could make it more difficult for us to obtain certain
types of insurance, including director and officer liability insurance, and we
may be forced to accept reduced policy limits and coverage and/or incur
substantially higher costs to obtain the same or similar coverage. The impact of
these events could also make it more difficult for us to attract and retain
qualified persons to serve on our board of directors, on committees of our board
of directors or as executive officers. We cannot predict or estimate the amount
of the additional costs we may incur or the timing of such costs as we implement
these new and proposed rules.

In addition, proposed initiatives could result in changes in accounting rules,
including legislative and other proposals to account for employee stock options
as an expense. These and other potential changes could materially increase the
expenses we report under generally accepted accounting principles, and adversely
affect our operating results.

We may need to expend considerable resources in order to comply with recent SEC
rulemaking including the Sarbanes-Oxley Act of 2002.

The costs associated with being a public company have increased dramatically
over the last several years following the advent of the Sarbanes-Oxley Act of
2002. We expect to spend significant resources in order to comply with the new
legislation and rulemaking aimed at public companies. As a result, we expect our
general and administrative expenses will rise as a result of these compliance
efforts. In addition, our management team will need to devote a substantial
amount of time to these efforts which could distract them from their current
responsibilities.

<PAGE>

Our headquarters are located in Northern California where natural disasters may
occur that could disrupt our operations and harm our business.

Our corporate headquarters are located in Silicon Valley in Northern California.
Historically, this region has been vulnerable to natural disasters and other
risks, such as earthquakes, which at times have disrupted the local economy and
posed physical risks to our and our manufacturers' property.

In addition, terrorist acts or acts of war targeted at the United States, and
specifically Silicon Valley, could cause damage or disruption to us, our
employees, facilities, partners, suppliers, distributors and resellers, and
customers, which could have a material adverse effect on our operations and
financial results. We currently do not have redundant, multiple site capacity in
the event of a natural disaster or catastrophic event. In the event of such an
occurrence, our business would suffer.

Item 3. Controls and Procedures

The Company's principal executive officer and principal financial officer (the
"Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e). Such officers have concluded (based upon their evaluations of
these controls and procedures as of the end of the period covered by this
report) that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by it in this report is
accumulated and communicated to management, including the Certifying Officers as
appropriate, to allow timely decisions regarding required disclosure.

The Certifying Officers have also indicated that there were no significant
changes in the Company's internal controls over financial reporting or other
factors that could significantly affect such controls subsequent to the date of
their evaluation, and there were no significant deficiencies and material
weaknesses.

Management, including the Certifying Officers, does not expect that the
Company's disclosure controls or its internal controls will prevent all error
and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. In addition, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must
be considered relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected. These inherent limitations include the realities that judgments
in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people or by
management override of the control. The design of any systems of controls is
also based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions. Because of these
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and may not be detected.

<PAGE>

                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

      (A) Reports on Form 8-K

      On April 8, 2005, the Company filed a Current Report on Form 8-K with the
Commission, as amended on April 18, April 20, April 26 and July 29, 2005,
disclosing the closing of the Merger with Nayna as set forth in the Nayna
Acquisition Agreement, the issuance of 32,249,947 shares of unregistered common
stock to the stockholders of Nayna, a change in control of the Company and the
departure of the Company's officers and directors and the appointment of new
officers and directors in connection with the closing of the Merger. The Current
Report also disclosed that on April 1, 2005, the Company dismissed Mantyla
McReynolds as its independent certified public accountants and engaged Naresh
Arora, CPA, Inc., to act as the Company's new independent certified accountant.
Finally, the current report disclosed that on April 6, 2005, the Company filed a
Certificate of Amendment with the State of Nevada to change the name of the
Company from ResCon Technology Corporation to Nayna Networks, Inc.

      (B) Exhibits. The following exhibits are included as part of this report:

      Exhibit 2.2       First Amendment Agreement and Plan of Reorganization by
                        and among Rescon Technology Corporation, a Nevada
                        corporation, Nayna Acquisition Corporation, a Nevada
                        corporation and a wholly owned subsidiary of Rescon,
                        Nayna Networks, Inc., and Christian Nigohossian
                        (incorporated by reference from Exhibit 2.2 filed with
                        the Company's Form 8-K on April 8, 2005).
      Exhibit 3.1       Certificate of Amendment to the Articles of
                        Incorporation, dated April 6, 2005 (incorporated by
                        reference from Exhibit 3.2 filed with the Company's Form
                        8-K on April 8, 2005).
      Exhibit 10.1      Agreement and Plan of Reorganization by and among Nayna
                        Networks, Inc., SSDI Acquisition Corporation and South
                        Seas Data, Inc. (incorporated by reference from Exhibit
                        10.1 filed with the Company's Form 8-K on May 24, 2005).
      Exhibit 31.1      Certification of Principal Executive Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002
      Exhibit 31.2      Certification of Principal Financial Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002
      Exhibit 32.1      Certification of Principal Executive Officer Pursuant to
                        Section 906 of the Sarbanes-Oxley Act of 2002
      Exhibit 32.2      Certification of Principal Financial Officer Pursuant to
                        Section 906 of the Sarbanes-Oxley Act of 2002

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the undersigned
thereunto duly authorized.

                                                Nayna Networks, Inc.


Dated: August 19, 2005                          By: /s/ Naveen S. Bisht
                                                    ----------------------------
                                                    Naveen S. Bisht, CEO


Dated: August 19, 2005                          By: /s/ Michael Meyer
                                                    ----------------------------
                                                    Michael Meyer, CFO