UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





Form
10-Q


(Mark
one)


x QUARTERLY REPORT UNDER
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE


ACT
OF 1934





For the
quarterly period ended September 30, 2009


OR


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





For the
transition period from ____________ to _____________





Commission
file number 001-32509





SANSWIRE
CORP.


(formerly
Globetel Communications Corp.)





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


Delaware
              88-0292161(State
      or other jurisdiction of incorporation or organization)
              (IRS
      Employer Identification No.)




101 NE
3rd
Ave, Suite 1500,


Fort
Lauderdale, Florida 33301


(Address
of principal executive offices)





(954)
332-3759


(Issuer's
telephone number)





Indicate
by check mark whether registrant (1) 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 xNo
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).


Yes x  No  o





Indicated
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filter and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):





Large
      accelerated filero
            Accelerated
      fileroNon-accelerated
      filer    o
            Smaller
      reporting companyx





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)


Yes
oNo x


As of
November 16, 2009, there were 249,115,902 shares of the issuer's common
stock issued and outstanding.










TABLE OF CONTENTS


PagePART
      I - FINANCIAL INFORMATIONItem
      1. Financial Statements.
              
              
              3Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations.
              
              
              24Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk.
              
              
              27Item
      4. Controls and Procedures.
              
              
              28PART
      II - OTHER INFORMATIONItem
      1. Legal Proceedings.
              
              
              29Item
      1A. Risk Factors.
              
              
              31Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.
              
              
              31Item
      3. Defaults Upon Senior Securities.
              
              
              31Item
      4. Submission of Matters to a Vote of Security Holders.
              
              
              31Item
      5. Other Information.
              
              
              31Item
      6. Exhibits.
              
              
              31




2





PART
I - FINANCIAL INFORMATION





Item 1. Financial
Statements.





SANSWIRE
CORP.  AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS




SEPTEMBER
      30,
              2009
            
            
            DECEMBER
      31, 2008ASSETS
            
            (Unaudited)
            
            
            (Restated)CURRENT
      ASSETSCash
      and cash equivalents
            
            $
            7,692
            
            
            $
            4,809Inventories
            
            
            1,110,700
            
            
            
            —Current
      assets from discontinued operations
            
            
            6,406
            
            
            
            6,406TOTAL
      CURRENT ASSETS
            
            
            1,124,798
            
            
            
            11,215NONCURRENT
      ASSETSIntangible
      assets, net of accumulated amortization of $807,250
            
            
            2,421,750
            
            
            
            —Investment
      in joint venture
            
            
            —
            
            
            
            3,229,000Deposits
            
            
            11,150
            
            
            
            —TOTAL
      NONCURRENT ASSETS
            
            
            2,432,900
            
            
            
            3,229,000TOTAL
      ASSETS
            
            $
            3,557,698
            
            
            $
            3,240,215LIABILITIES
      AND STOCKHOLDERS’ DEFICITLIABILITIESCURRENT
      LIABILITIESAccounts
      payable  (including $385,357 due to joint venture partner at
      September 30, 2009)
            
            $
            4,874,995
            
            
            $
            3,802,777Notes
      and convertible notes payable, net of discount of $0 and
      $134,423
            
            
            7,290,280
            
            
            
            9,264,732Accrued
      expenses and other liabilities (including $2,185,000 due to joint venture
      partner at September 30, 2009 and December 31, 2008)
            
            
            3,180,589
            
            
            
            3,489,210Fair
      value of derivative liabilities
            
            
            2,633,367
            
            
            
            748,244Current
      liabilities from discontinued operations
            
            
            1,387,406
            
            
            
            1,387,406TOTAL
      LIABILITIES
            
            
            19,366,637
            
            
            
            18,692,369COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      DEFICITSeries
      E Preferred stock, $.001 par value, 100,000 shares
      authorized;100,000
      shares issued and outstanding
            
            
            100
            
            
            
            —Additional
      paid-in capital - Series E Preferred stock
            
            
            625,894
            
            
            
            —Common
      stock, $.00001 par value, 250,000,000 shares authorized;248,990,902
      and 184,704,015 shares issued and outstanding
            
            
            2,491
            
            
            
            1,848Additional
      paid-in capital
            
            
            118,107,011
            
            
            
            109,848,580Accumulated
      deficit
            
            
            (134,544,435
            )
            
            
            (125,302,582
            )TOTAL
      STOCKHOLDERS' DEFICIT
            
            
            (15,808,939
            )
            
            
            (15,452,154
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
            
            $
            3,557,698
            
            
            $
            3,240,215




See
accompanying notes to condensed consolidated financial
statements




3





SANSWIRE
CORP.  AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)





THREE
      MONTHS ENDED
            
            
            NINE
      MONTHS ENDEDSEPTEMBER
      30,
            
            
            SEPTEMBER
      30,2009
            
            
            2008
              (Restated)
            
            
            2009
            
            
            2008
              (Restated)REVENUES
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —EXPENSESPayroll
      and related taxes
            
            
            153,687
            
            
            
            135,496
            
            
            
            404,023
            
            
            
            666,531Consulting
      fees
            
            
            719,488
            
            
            
            422,768
            
            
            
            1,474,117
            
            
            
            1,138,796Officers'
      and directors' stock based compensation
            
            
            335,750
            
            
            
            97,500
            
            
            
            3,246,280
            
            
            
            435,000Amortization
            
            
            242,175
            
            
            
            —
            
            
            
            807,250
            
            
            
            —General
      and administrative
            
            
            95,460
            
            
            
            111,055
            
            
            
            341,119
            
            
            
            275,059TOTAL
      EXPENSES
            
            
            1,546,560
            
            
            
            766,819
            
            
            
            6,272,789
            
            
            
            2,515,386LOSS
      FROM OPERATIONS
            
            
            (1,546,560
            )
            
            
            (766,819
            )
            
            
            (6,272,789
            )
            
            
            (2,515,386
            )OTHER
      INCOME (EXPENSE)Loss
      on extinguishment of debt
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (1,096,650
            )Extinguishment
      of derivative liabilities
            
            
            629,563
            
            
            
            150,995
            
            
            
            629,563
            
            
            
            442,529Change
      in fair value of derivative liabilities
            
            
            (378,532
            )
            
            
            600,838
            
            
            
            (2,514,686
            )
            
            
            266,179Interest
      expense, net
            
            
            (197,145
            )
            
            
            (418,697
            )
            
            
            (1,083,941
            )
            
            
            (856,218
            )NET
      OTHER INCOME (EXPENSE)
            
            
            53,886
            
            
            
            333,136
            
            
            
            (2,969,064
            )
            
            
            (1,244,160
            )LOSS
      FROM CONTINUING OPERATIONS
            
            
            (1,492,674
            )
            
            
            (433,683
            )
            
            
            (9,241,853
            )
            
            
            (3,759,546
            )LOSS
      FROM DISCONTINUED OPERATIONS
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (196
            )NET
      LOSS
            
            $
            (1,492,674
            )
            
            $
            (433,683
            )
            
            $
            (9,241,853
            )
            
            $
            (3,759,742
            )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDINGBASIC
      and DILUTED
            
            
            226,806,725
            
            
            
            155,459,034
            
            
            
            206,213,560
            
            
            
            133,121,067LOSS
      PER SHARE FROM CONTINUING OPERATIONSBASIC
      and DILUTED
            
            $
            (
      0.01
            )
            
            $
            (
      0.00
            )
            
            $
            (
      0.04
            )
            
            $
            (
      0.03
            )LOSS
      PER SHARE FROM DISCONTINUED OPERATIONSBASIC
      and DILUTED
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            $
            (
      0.00
            )NET
      LOSS PER SHAREBASIC
      and DILUTED
            
            $
            (
      0.01
            )
            
            $
            (
      0.00
            )
            
            $
            (
      0.04
            )
            
            $
            (
      0.03
            )




See
accompanying notes to condensed consolidated financial statements





4




SANSWIRE
CORP. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' DEFICIT


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009


(Unaudited)




COMMON
      STOCKADDITIONALPAID-INDescription
            
            SHARES
            
            
            AMOUNT
            
            
            CAPITALBALANCE,
      DECEMBER 31, 2008 (Restated)
            
            
            184,704,015
            
            
            $
            1,848
            
            
            $
            109,848,580Shares
      issued for cash
            
            
            12,889,996
            
            
            
            129
            
            
            
            1,353,321Shares
      issued for conversion of notes
            
            
            25,683,212
            
            
            
            257
            
            
            
            2,702,942Shares
      issued for settlement of debt
            
            
            2,720,346
            
            
            
            27
            
            
            
            131,753Shares
      issued for services
            
            
            22,668,333
            
            
            
            226
            
            
            
            1,881,774Shares
      issued for options exercised
            
            
            75,000
            
            
            
            1
            
            
            
            (1
            )Shares
      issued for interest
            
            
            250,000
            
            
            
            3
            
            
            
            9,497Fair
      value of vested options issued for officers’ and directors’
      compensation
            
            
            —
            
            
            
            —
            
            
            
            1,707,780Warrants
      issued with convertible notes
            
            
            —
            
            
            
            —
            
            
            
            28,060Modification
      of warrants
            
            
            —
            
            
            
            —
            
            
            
            443,305Preferred
      Series E shares issued for accrued expenses
            
            
            —
            
            
            
            —
            
            
            
            —Preferred
      Series E shares issued for accounts payable
            
            
            —
            
            
            
            —
            
            
            
            —Net
      loss
            
            
            —
            
            
            
            —
            
            
            
            —BALANCE,
      SEPTEMBER 30, 2009
            
            
            248,990,902
            
            
            $
            2,491
            
            
            $
            118,107,011




(continued)





See
accompanying notes to consolidated financial statements





5





SANSWIRE
CORP.  AND SUBSIDIARIES (continued)


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' DEFICIT


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009


(Unaudited)




SERIES
      E PREFERRED STOCKADDITIONAL
            
            
            
            
            
            
            
            
            TOTALPAID-IN
            
            
            
            
            
            ACCUMULATED
            
            
            STOCKHOLDERS'Description
            
            SHARES
            
            
            AMOUNT
            
            
            CAPITAL
            
            
            DEFICIT
            
            
            DEFICITBALANCE,
      DECEMBER 31, 2008(Restated)
            
            
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            (125,302,582
            )
            
            $
            (15,452,154
            )Shares
      issued for cash
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            1,353,450Shares
      issued for conversion of notes
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            2,703,199Shares
      issued for settlement of debt
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            131,780Shares
      issued for services
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            1,882,000Shares
      issued for options exercised
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Shares
      issued for interest
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            9,500Fair
      value of vested options issued for officers’ and directors’
      compensation
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            1,707,780Warrants
      issued with convertible notes
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            28,060Modification
      of warrants
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            443,305Preferred
      Series E shares issued for accrued expenses
            
            
            70,385
            
            
            
            70
            
            
            
            440,537
            
            
            
            —
            
            
            
            440,607Preferred
      Series E shares issued for accounts payable
            
            
            29,615
            
            
            
            30
            
            
            
            185,357
            
            
            
            —
            
            
            
            185,387Net
      loss
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (9,241,853
            )
            
            
            (9,241,853
            )BALANCE,
      SEPTEMBER 30, 2009
            
            
            100,000
            
            
            $
            100
            
            
            $
            625,894
            
            
            $
            (134,544,435
            )
            
            $
            (15,808,939
            )




See
accompanying notes to consolidated financial statements




6





SANSWIRE
CORP. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30,


(Unaudited)




2009
            
            
            2008
              (Restated)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (9,241,853
            )
            
            $
            (3,759,742
            )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Amortization
      of debt discount
            
            
            176,465
            
            
            
            207,514Amortization
      of intangible asset
            
            
            807,250
            
            
            
            —Loss
      on extinguishment of debt
            
            
            —
            
            
            
            1,096,650Stock
      based compensation
            
            
            2,050,726
            
            
            
            391,444Extinguishment
      of derivative liabilities
            
            
            —
            
            
            
            (266,179
            )Change
      in fair value of derivative liabilities
            
            
            1,885,123
            
            
            
            (442,529
            )Fair
      value of vested options
            
            
            1,707,780
            
            
            
            244,831Accrued
      interest expense on convertible notes payable
            
            
            381,526
            
            
            
            421,502Common
      stock exchanged for interest and financing costs
            
            
            —
            
            
            
            227,080Fair
      value of modification of warrants
            
            
            443,305
            
            
            
            —Change
      in operating assets and liabilities:Inventories
            
            
            (1,110,700
            )
            
            
            —Assets
      from discontinued operations
            
            
            —
            
            
            
            12,272Accounts
      payable
            
            
            1,270,636
            
            
            
            555,192Accrued
      expenses and other liabilities
            
            
            175,736
            
            
            
            914,204Liabilities
      from discontinued operations
            
            
            —
            
            
            
            25NET
      CASH USED IN OPERATING ACTIVITIES
            
            
            (1,454,006
            )
            
            
            (397,736
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPayments
      to joint venture
            
            
            —
            
            
            
            (385,000
            )Deposits
            
            
            (11,150
            )
            
            
            —NET
      CASH USED IN INVESTING ACTIVITIES
            
            
            (11,150
            )
            
            
            (385,000
            )CASH
      FLOWS FROM FINANCING ACTIVITIESPayments
      on notes payable
            
            
            (25,411
            )
            
            
            (25,139
            )Proceeds
      from notes and loans payable
            
            
            140,000
            
            
            
            782,279Proceeds
      from sale of common stock
            
            
            1,353,450
            
            
            
            —NET
      CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            1,468,039
            
            
            
            757,140NET
      CHANGE IN CASH AND EQUIVALENTS
            
            
            2,883
            
            
            
            (25,596
            )CASH
      AND EQUIVALENTS – BEGINNING OF PERIOD
            
            
            4,809
            
            
            
            32,278CASH
      AND EQUIVALENTS – END OF PERIOD
            
            $
            7,692
            
            
            $
            6,682SUPPLEMENTAL
      DISCLOSURESCash
      paid during the period for:Interest
            
            $
            2,903
            
            
            $
            122NON-CASH
      INVESTING AND FINANCING ACTIVITIES:Common
      stock issued for joint venture
            
            
            —
            
            
            
            268,000Common
      stock for accrued expenses
            
            
            43,750
            
            
            
            148,970Common
      stock for accounts payable
            
            
            13,031
            
            
            
            —Accrued
      expense for joint venture
            
            
            —
            
            
            
            659,000Conversion
      of notes payable to common stock
            
            
            2,618,973
            
            
            
            4,137,442Non-cash
      equity-warrant valuation and intrinsic value of beneficial
              conversion
      associated with convertible notes
            
            
            28,060
            
            
            
            194,080Preferred
      stock for accrued expenses
            
            
            440,607
            
            
            
            —Preferred
      stock for accounts payable
            
            
            185,387
            
            
            
            —





See
accompanying notes to condensed consolidated financial statements




7




SANSWIRE
CORP. AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





NOTE
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES





NATURE OF
OPERATIONS





From 2002
to 2007, Sanswire Corp. (formerly known as GlobeTel Communications Corp.)
("Sanswire" or the “Company”) was involved in the following business sectors:
stored value card services; wholesale telecommunications services; voice over
IP; wireless broadband; and high altitude airships. These business units
operated through various subsidiaries. The Company has discontinued operations
in all but the high altitude airship sector that is conducted through the
Company’s consolidated joint venture, Sanswire-TAO (for more information see
notes 2 and 6 below).





The
opportunities associated with Sanswire are related to the Lighter Than Air (LTA)
Unmanned Aerial Vehicle (UAV) market. Sanswire seeks to build and run a UAV
business that includes low-, mid- and high-altitude, lighter-than-air vehicles.
Sanswire intends to provide customers seamless wireless broadband capabilities
and surveillance sensor suites utilizing its High Altitude Airship
technology.





Sanswire’s
main products will be airships, which provide a platform to transmit wireless
capabilities from air to ground. The High Altitude class of prospective
airships are generally referred to as HAAs (High Altitude Airships) but have
also been called HAPs and HALEs (High Altitude Platforms, High Altitude Long
Endurance). They have been designed to be able to keep a station in one location
in the stratosphere, at approximately 65,000 ft for durations of 30 days or
more.





On April
14, 2009, the Company arranged for financing for Sanswire-TAO to construct
its first 34 meter unmanned autonomously controlled mid-altitude airship and
entered into a contract with its joint venture partner TAO Technologies to
construct the airship platform.





BASIS OF
PRESENTATION





The
accompanying unaudited condensed consolidated financial statements of Sanswire
Corp. and Subsidiaries have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and pursuant to the requirements for reporting on
Form 10-Q and Regulation SX for scaled disclosures for smaller reporting
companies. Accordingly, they do not include all the information and footnotes
required by accounting principles generally accepted in United States of America
for complete financial statements. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments), which are, in
the opinion of management, necessary for the fair presentation of the
consolidated financial position and the consolidated results of operations.
Results shown for interim periods are not necessarily indicative of the results
to be obtained for a full fiscal year.





The
condensed consolidated balance sheet information as of December 31, 2008 was
derived from the audited consolidated financial statements included in the
Company's Annual Report on Form 10-KA filed with the SEC on September 22, 2009.
These interim financial statements should be read in conjunction with that
report.





The
Company applied the provision of Financial Accounting Standards Board (“FASB”)
ASC 810-10. “Consolidation of Variable Interest Entities (revised December
2003)” (“FIN 46R”) to its investment in Sanswire-TAO.  Under ASC 810,
a variable interest entity (VIE) is subject to consolidation if the total equity
investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated financial support provided by any
parties, including equity holders.  As of September 30, 2009, the
Company determined that that consolidation of Sanswire-TAO was
appropriate.  Inter-company accounts and transactions have been
eliminated in consolidation.





8




GOING
CONCERN





The
accompanying condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As
reflected in the accompanying condensed consolidated financial statements, the
Company had a net loss of $9,241,853 and used cash in operating activities of
$1,454,006 for the nine months ended September 30, 2009, and had a working
capital deficit of $18,241,839 and a stockholders’ deficit of $15,808,939
at September 30, 2009.  These factors raise substantial doubt about
the Company’s ability to continue as a going concern. The ability of the Company
to continue as a going concern is dependent upon the Company’s ability to raise
additional funds and implement its business plan. The condensed consolidated
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. The Company anticipates
that a net loss will continue for the balance of 2009.





Additional
cash will still be needed to support operations. Management believes it can
continue to raise capital from various funding sources, which will be sufficient
to sustain operations at its current level through December 31,
2009. However, if budgeted sales levels are not achieved and/or if
significant unanticipated expenditures occur, or if it is unable to obtain the
necessary funding, the Company may have to modify its business plan, reduce or
discontinue some of its operations or seek a buyer for all or part of its assets
to continue as a going concern. As of the date of this report the Company
has continued to raise capital to sustain its current operations which have been
reduced since January 1, 2008.  The Company will need to periodically seek
investment to provide cash for operations until such time that operations
provide sufficient cash flow to cover expenditures.





On May 2,
2008, the Securities and Exchange Commission (“SEC”) filed a lawsuit in the
United States District Court for the Southern District of Florida against
GlobeTel Communications Corp. (the “Company”) and three former officers of the
Company, Timothy J. Huff, Thomas Y. Jimenez and Lawrence E. Lynch. The SEC
alleges, among other things, that the Company recorded $119 million in revenue
on the basis of fraudulent invoices created by Joseph Monterosso and Luis
Vargas, two individuals formerly employed by the Company who were in charge of
its wholesale telecommunications business.  The SEC alleges that the
Company violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933,
as amended, Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Rules 10b-5, 12b-20,
13a-1, 13a-11 and 13a-13 under the Exchange Act. The SEC seeks as relief a
permanent injunction, civil penalties, and disgorgement with prejudgment
interest. The Company intends to vigorously defend itself in this action. The
Staff is also considering recommending that the SEC authorize and institute
proceedings to revoke the registration of Company’s securities pursuant to
Section 12(j) of the Exchange Act (also see note 8).





CASH AND
CASH EQUIVALENTS





The
Company considers all highly liquid debt instruments with an original maturity
of three months or less at the date of purchase to be cash
equivalents.





REGISTRATION
RIGHTS





At
September 30, 2009 the Company has no registration rights agreement requiring
penalties to be recorded.





INCOME
TAXES





Income
taxes are computed under the provisions of the Financial Accounting Standards
Board (FASB) ASC 740, “Accounting for Income Taxes”.  ASC 740 is an
asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of the
difference in events that have been recognized in the Company's financial
statements compared to the tax returns.





9




VALUATION
HIERARCHY





FASB ASC
820, “Fair Value Measurements”, establishes a valuation hierarchy for disclosure
of the inputs to valuation used to measure fair value. This hierarchy
prioritizes the inputs into three broad levels as follows.  Level 1
inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities.  Level 2 inputs are quoted prices for similar
assets and liabilities in active markets or inputs that are observable for the
asset or liability, either directly or indirectly through market corroboration,
for substantially the full term of the financial instrument.  Level 3
inputs are unobservable inputs based on the Company’s own assumptions used to
measure assets and liabilities at fair value.  A financial asset or
liability’s classification within the hierarchy is determined based on the
lowest level input that is significant to the fair value
measurement.





The
following table provides the assets and liabilities carried at fair value
measured on a recurring basis as of September 30, 2009 (unaudited):





Total Carrying Value at
      September
            
            
            Fair
      Value Measurements at September 30, 200930,
      2009
            
            
            (Level
      1)
            
            
            (Level
      2)
            
            
            (Level
      3)Cash
      and cash equivalents
            
            $
            7,692
            
            
            $
            7,692
            
            
            $
            —
            
            
            $
            —Derivative
      liabilities
            
            
            2,633,367
            
            
            
            —
            
            
            
            —
            
            
            
            2,633,367





The
derivative liabilities are measured at fair value using quoted market prices and
estimated volatility factors, and are classified within Level 3 of the valuation
hierarchy. There were no changes in the valuation techniques during the three or
nine months ended September 30, 2009.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





Financial
instruments, including cash, accounts payable, accrued expenses and notes
payable are carried at amounts which reasonably approximate their fair value due
to the short-term nature of these amounts or due to variable rates of interest
which are consistent with market rates.





USE OF
ESTIMATES





The
process of preparing financial statements in conformity with generally accepted
accounting principles in the United States requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues, and
expenses. Such estimates primarily relate to unsettled transactions and events
as of the date of the financial statements. Accordingly, upon settlement, actual
results may differ from estimated amounts.





BASIC AND
DILUTED NET LOSS PER COMMON SHARE




Basic and
diluted net loss per common share has been computed based upon the weighted
average number of shares of common stock outstanding during each period. The
basic and diluted net loss is computed by dividing the net loss by the weighted
average number of common shares outstanding during each period. In periods where
losses are reported, the weighted average number of common shares outstanding
excludes common stock equivalents because their inclusion would be
anti-dilutive. If all outstanding options, warrants and convertible shares were
to be converted or exercised as of September 30, 2009, the shares outstanding
would be 315,088,127.   The Company's Articles of Incorporation
currently allow for issuance of a maximum of 250,000,000 shares of common stock.
On November 2, 2009, holders of a majority of our voting shares of our company,
Sanswire Corp., acted by written consent in lieu of a special meeting of
shareholders to an adopt amendment to our articles of incorporation to increase
the number of shares of common stock which we are authorized to issue from
250,000,000 shares to 500,000,000 shares.  As of November 2, 2009, we
had 249,115,902 shares of our common stock outstanding. The Company is obligated
under various existing agreements, options and warrants to issue additional
shares of our common stock.




10




IMPAIRMENT
OF LONG-LIVED ASSETS





The
Company follows FASB ASC 360, "Accounting for the Impairment of Long-Lived
Assets." ASC 360 requires that long-lived assets to be held and used are
reviewed for impairment whenever events or changes in circumstances indicate
that the related carrying amount may not be recoverable. When required,
impairment losses on assets to be held and used are recognized based on the fair
value of the asset. Long-lived assets to be disposed of, if any, are reported at
the lower of carrying amount or fair value less cost to sell.





INTANGIBLE
ASSETS





Intangible
assets are related to the Company's consolidated joint venture Sanswire-TAO (see
Note 6).  Intangible assets with finite lives are amortized over their
estimated useful lives, which are three years for patents and intellectual
property.  In addition to amortization, intangible assets are tested
at least annually for impairment, or whenever events or changes in circumstances
indicate that the carrying amount should be assessed.  An asset is
considered impaired if its carrying amount exceeds the future net cash flow the
asset is expected to generate. If an asset is considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the asset exceeds its fair value.  The Company generally
measures fair value by considering sales prices for similar assets or by
discounting estimated future net cash flows from such assets using a discount
rate reflecting the Company's average cost of capital.





DERIVATIVE
FINANCIAL INSTRUMENTS





The
Company does not use derivative instruments to hedge exposures to cash flow,
market or foreign currency risks.  The Company evaluates all of its
financial instruments to determine if such instruments are derivatives or
contain features that qualify as embedded derivatives.  For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value and is then re-valued at each
reporting date, with changes in the fair value reported in the condensed
consolidated statements of operations.  For stock-based derivative
financial instruments, the Company uses the Black-Scholes option pricing model
to value the derivative instruments at inception and on subsequent valuation
dates.  The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is
evaluated at the end of each reporting period.  Derivative instrument
liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement of the derivative instrument could be
required within 12 months of the balance sheet date.





STOCK-BASED
COMPENSATION





The
Company periodically issues stock options and warrants to employees and
non-employees in non-capital raising transactions for services and for financing
costs. The Company accounts for stock option and warrant grants issued and
vesting to employees using ASC 718 effective January 1, 2006, and for all
share-based payments granted based on the requirements of ASC 718. The Company
accounts for stock option and warrant grants issued and vesting to non-employees
in accordance with ASC 505: "Accounting for Equity Instruments that are Issued
to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services” and ASC 505 “Accounting Recognition for Certain Transactions involving
Equity Instruments Granted to Other Than Employees” whereas the value of the
stock compensation is based upon the measurement date as determined at either a)
the date at which a performance commitment is reached, or b) at the date at
which the necessary performance to earn the equity instruments is
complete.





11




RECENT ACCOUNTING
PRONOUNCEMENTS




In
April 2009, the FASB issued additional application guidance and enhanced
disclosures regarding fair value measurements and impairment of securities. The
guidance includes how to determine the fair value of assets and liabilities when
the volume and level of activity for the asset or liability has significantly
decreased. Enhanced disclosure requirements include the following: 1) interim
disclosures regarding the fair values of financial instruments that are not
currently reflected on the balance sheet at fair value; and 2) disclosure on the
methods and significant assumptions used to estimate the fair value of financial
instruments on an interim basis as well as changes of the methods and
significant assumptions from prior periods. We adopted the additional guidance
and disclosure requirements as of our third quarter ended September 30, 2009.
The adoption did not have a material effect on our financial condition or
results of operations.





In
May 2009, the FASB issued its pronouncement regarding subsequent events
which provides guidance to establish general standards of accounting for, and
disclosures of, events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. In connection
with preparation of the consolidated financial statements, we evaluated
subsequent events after the balance sheet date of September 30, 2009
through November 12, 2009, the date the financial statements were
issued.





In
June 2009, the FASB approved the FASB Accounting Standards Codification
(“the Codification”) as the single source of authoritative nongovernmental GAAP.
All existing accounting standard documents, such as the FASB, American Institute
of Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the SEC, have been superseded by the
Codification. All non-grandfathered, non-SEC accounting literature not included
in the Codification has become non-authoritative. The Codification does not
change GAAP, but instead introduces a new structure that combines all
authoritative standards into a comprehensive, topically organized online
database. The Codification is effective for our September 30, 2009
financial statements and impacts financial statement disclosures as all
references to authoritative accounting literature are referenced in accordance
with the Codification.





NOTE
2. DISCONTINUED OPERATIONS





The
Company decided to close several of its operations relating to its telecom and
wireless activities during 2007 and has presented certain activities as
discontinued operations as of September 30, 2009 and December 31,
2008.





The
Company had the following assets and liabilities from its discontinued
operations on its consolidated balance sheet as of September 30, 2009
(unaudited) and December 31, 2008:





SEPTEMBER
      30 2009 (Unaudited)
            
            Telecom
            
            
            GlobeTel
      Wireless
            
            
            TotalCash
            
            $
            6,406
            
            
            $
            —
            
            
            $
            6,406Total
      assets
            
            $
            6,406
            
            
            $
            —
            
            
            $
            6,406Accounts
      payable
            
            
            140,116
            
            
            
            1,216,208
            
            
            
            1,356,324Accrued
      liabilities
            
            
            9,605
            
            
            
            21,477
            
            
            
            31,082Total
      current liabilities
            
            
            149,721
            
            
            
            1,237,685
            
            
            
            1,387,406Net
      liabilities of discontinued operations
            
            $
            143,315
            
            
            $
            1,237,685
            
            
            $
            1,381,000





12




DECEMBER
      31, 2008
            
            Telecom
            
            
            GlobeTel
      Wireless
            
            
            TotalCash
            
            $
            6,406
            
            
            $
            —
            
            
            $
            6,406Total
      assets
            
            $
            6,406
            
            
            $
            —
            
            
            $
            6,406Accounts
      payable
            
            
            140,116
            
            
            
            1,216,208
            
            
            
            1,356,324Accrued
      liabilities
            
            
            9,605
            
            
            
            21,477
            
            
            
            31,082Total
      current liabilities
            
            
            149,721
            
            
            
            1,237,685
            
            
            
            1,387,406Net
      liabilities of discontinued operations
            
            $
            143,315
            
            
            $
            1,237,685
            
            
            $
            1,381,000





NOTE
3. RESTATEMENT OF FINANCIAL STATEMENTS




On
September 4, 2009, the Company concluded, with the concurrence of the Company’s
Board of Directors, that an accounting error had been made in the Company’s
historical September 30, and December 31, 2008 consolidated financial statements
in relation to the provisions of FASB ASC 815, "Accounting for Derivative
Financial Instruments and Hedging Activities” and the recording of
certain warrants and the beneficial conversion feature of the Company’s
convertible notes payable.   In accordance with ASC 815, the fair
value of certain of the Company’s options and warrants and the embedded
conversion feature of the Company’s convertible notes payable, have been
re-characterized as derivative liabilities effective January 1,
2007.  ASC 815 requires that the fair value of these liabilities be
re-measured at the end of every reporting period with the change in value
reported in the statement of operations.  As a result,
the Company’s unaudited condensed consolidated financial statements
for the three and nine months ended September 30, 2008 and audited condensed
consolidated financial statements as of December 31, 2008 have
been restated.





The
effects of the restatement on the Company’s condensed consolidated financial
statements for the three and nine months ended September 30, 2008 and as of
December 31, 2008 are shown below (note: see table of adjustment descriptions at
end of this section):





December
      31, 2008Account
            
            (As
      Initially Reported)
            
            
            (Adjustment)
            
            
            (As
      Restated)Current
      AssetsCash
            
            $
            4,809
            
            
            $
            —
            
            
            $
            4,809Current
      assets from discontinued operations
            
            
            6,406
            
            
            
            —
            
            
            
            6,406Total
      current assets
            
            
            11,215
            
            
            
            —
            
            
            
            11,215Investment
      in joint venture
            
            
            3,229,000
            
            
            
            —
            
            
            
            3,229,000Total
      Assets
            
            $
            3,240,215
            
            
            $
            —
            
            
            $
            3,240,215Liabilities
      and Stockholders’ DeficitCurrent
      liabilitiesAccounts
      payable
            
            $
            3,802,777
            
            
            $
            —
            
            
            $
            3,802,777Notes
      and notes payable, net of discount of $134,423
            
            
            9,264,732
            
            
            
            —
            
            
            
            9,264,732Accrued
      expenses and other liabilities
            
            
            3,489,210
            
            
            
            —
            
            
            
            3,489,210Derivative
      liabilities
            
            
            —
            
            
            
            748,244
            (1)
            
            
            748,244Current
      liabilities from discontinued operations
            
            
            1,387,406
            
            
            
            —
            
            
            
            1,387,406Total
      Current Liabilities
            
            
            17,944,125
            
            
            
            748,244
            
            
            
            18,692,369Stockholders’
      DeficitCommon
      stock
            
            
            1,848
            
            
            
            —
            
            
            
            1,848Additional
      paid-in capital
            
            
            111,128,580
            
            
            
            (1,280,000
            )
      (1)
            
            
            109,848,580Accumulated
      deficit
            
            
            (125,834,338
            )
            
            
            531,756
            (1)
            
            
            (125,302,582
            )Total
      Stockholders’ Deficit
            
            
            (14,703,910
            )
            
            
            (748,244
            )
            
            
            (15,452,154
            )Total
      Liabilities and Stockholders’Deficit
            
            $
            3,240,215
            
            
            $
            —
            
            
            $
            3,240,215




13




Nine
      Months Ended September 30, 2008 (Unaudited)Account
            
            (As
      Initially Reported)
            
            
            (Adjustment)
            
            
            (As
      Restated)Revenue
            
            $
            —
            
            
            $
            —
            
            
            $
            —Payroll
      and related taxes
            
            
            (666,531
            )
            
            
            —
            
            
            
            (666,531
            )Consulting
      fees
            
            
            (1,138,796
            )
            
            
            —
            
            
            
            (1,138,796
            )Noncash
      officers’ and directors’ compensation
            
            
            (435,000
            )
            
            
            —
            
            
            
            (435,000
            )General
      and administrative expenses
            
            
            (275,059
            )
            
            
            —
            
            
            
            (275,059
            )Loss
      from operations
            
            
            (2,515,386
            )
            
            
            —
            
            
            
            (2,515,386
            )Loss
      on extinguishment of debt
            
            
            (1,096,650
            )
            
            
            —
            
            
            
            (1,096,650
            )Interest
      expense
            
            
            (856,218
            )
            
            
            —
            
            
            
            (856,218
            )Extinguishment
      of derivative liability
            
            
            —
            
            
            
            442,529
            (3)
            
            
            442,529Change
      in fair value of derivative liability
            
            
            —
            
            
            
            266,179
            (2)
            
            
            266,179Net
      other expense
            
            
            (1,952,868
            )
            
            
            708,708
            
            
            
            (1,244,160
            )Loss
      from continuing operations
            
            
            (4,468,254
            )
            
            
            708,708
            
            
            
            (3,759,546
            )Loss
      from discontinued operations
            
            
            (196
            )
            
            
            —
            
            
            
            (196
            )Net
      loss
            
            $
            (4,468,450
            )
            
            $
            708,708
            
            
            $
            (3,759,742
            )Net
      loss per share from continuing operations, basic and
    diluted
            
            $
            (0.03
            )
            
            
            0.00
            
            
            
            (0.03
            )Net
      loss per share from discontinuing operations, basic and
      diluted
            
            $
            (0.00
            )
            
            
            —
            
            
            $
            (0.00
            )Weighted
      average shares outstanding, basic and diluted
            
            
            133,121,067
            
            
            
            
            
            
            
            133,121,067




Three
      Months Ended September 30, 2008 (Unaudited)Account
            
            (As
      Initially Reported)
            
            
            (Adjustment)
            
            
            (As
      Restated)Revenue
            
            $
            —
            
            
            $
            —
            
            
            $
            —Payroll
      and related taxes
            
            
            (135,496
            )
            
            
            —
            
            
            
            (135,496
            )Consulting
      fees
            
            
            (422,768
            )
            
            
            —
            
            
            
            (422,768
            )Noncash
      officers’ and directors’ compensation
            
            
            (97,500
            )
            
            
            —
            
            
            
            (97,500
            )General
      and administrative expenses
            
            
            (111,055
            )
            
            
            —
            
            
            
            (111,055
            )Loss
      from operations
            
            
            (766,819
            )
            
            
            —
            
            
            
            (766,819
            )Interest
      expense
            
            
            (311,263
            )
            
            
            (107,434
            )(6)
            
            
            (418,697
            )Extinguishment
      of derivative liability
            
            
            —
            
            
            
            150,995
            (5)
            
            
            150,995Change
      in fair value of derivative liability
            
            
            —
            
            
            
            600,838
            (4)
            
            
            600,838Net
      other expense
            
            
            (311,263
            )
            
            
            644,399
            
            
            
            333,136Loss
      from continuing operations
            
            
            (1,078,082
            )
            
            
            644,399
            
            
            
            (433,683
            )Loss
      from discontinued operations
            
            
            —
            
            
            
            —
            
            
            
            —Net
      loss
            
            $
            (1,078,082
            )
            
            $
            644,399
            
            
            $
            (433,683
            )Net
      loss per share from continuing operations, basic and
    diluted
            
            $
            (0.01
            )
            
            
            0.00
            
            
            
            (0.00
            )Net
      loss per share from discontinuing operations, basic and
      diluted
            
            $
            (0.00
            )
            
            
            —
            
            
            $
            (0.00
            )Weighted
      average shares outstanding, basic and diluted
            
            
            155,459,034
            
            
            
            
            
            
            
            155,459,034




14




Nine
      Months Ended September 30, 2008 (Unaudited)(As
      Initially Reported)
            
            
            (Adjustment)
            
            
            (As
      Restated)Cash
      flow from operating activities:Net
      loss
            
            $
            (4,468,450
            )
            
            $
            708,708
            
            
            $
            (3,759,742
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Amortization
      of debt discount
            
            
            207,514
            
            
            
            —
            
            
            
            207,514Loss/Gain
      on extinguishment of debt
            
            
            1,096,650
            
            
            
            —
            
            
            
            1,096,650Stock
      based compensation
            
            
            391,444
            
            
            
            —
            
            
            
            391,444Fair
      value of vested options
            
            
            244,831
            
            
            
            —
            
            
            
            244,831Change
      in fair value of derivative liability
            
            
            —
            
            
            
            (266,179
            )
      (2)
            
            
            (442,529
            )Extinguishment
      of derivative liability
            
            
            —
            
            
            
            (442,529
            )
      (3)
            
            
            (266,179
            )Interest
      expense on convertible notes payable
            
            
            421,502
            
            
            
            —
            
            
            
            421,502Common
      stock exchanged for interest and financing costs
            
            
            227,080
            
            
            
            —
            
            
            
            227,080Decrease
      in assets:Decrease
      in assets relating to discontinued operations
            
            
            12,272
            
            
            
            —
            
            
            
            12,272Increase
      in liabilities:Accounts
      payable
            
            
            555,192
            
            
            
            —
            
            
            
            555,192Accrued
      expenses and other liabilities
            
            
            914,204
            
            
            
            —
            
            
            
            914,204Increase
      in liabilities relating to discontinued operations
            
            
            25
            
            
            
            —
            
            
            
            25Net
      cash used in operating activities
            
            
            (397,736
            ) )
            
            
            —
            
            
            
            (397,736
            )Cash
      flows from investing activities:Payment
      on joint venture
            
            
            (385,000
            )
            
            
            —
            
            
            
            (385,000
            )Net
      cash used in investing activities
            
            
            (385,000
            )
            
            
            —
            
            
            
            (385,000
            )Cash
      flows from financing activities:Payments
      on notes payable
            
            
            (25,139
            )
            
            
            —
            
            
            
            (25,139
            )Proceeds
      from notes and loans payable
            
            
            782,279
            
            
            
            —
            
            
            
            782,279Net
      cash provided by financing activities
            
            
            757,140
            
            
            
            —
            
            
            
            757,140Net
      decrease in cash and cash equivalents
            
            
            (25,596
            )
            
            
            —
            
            
            
            (25,596
            )Cash
      and cash equivalents, beginning of period
            
            
            32,278
            
            
            
            —
            
            
            
            32,278Cash
      and cash equivalents, end of period
            
            $
            6,682
            
            
            $
            —
            
            
            $
            6,682




Description
of adjustments:




(1)
            To
      record $748,244 increase to derivative liability, $531,756 decrease to
      accumulated deficit for prior period recognition of derivative liability,
      and $1,280,000 decrease to additional paid in capital upon adoption of ASC
      815.(2)
            To
      record $266,179 decrease in derivative liability for the nine months ended
      September 30, 2008.(3)
            To
      record $442,529 decrease from the extinguishment of derivative liabilities
      for the nine months ended September 30, 2008.(4)
            To
      record $600,838 decrease in derivative liability for the three months
      ended September 30, 2008.(5)
            To
      record $150,995 decrease from the extinguishment of derivative liabilities
      for the three months ended September 30, 2008.(6)
            To
      reclass $107,434 to interest expense from derivative liability for the
      three months ended September 30,
2008.





15


NOTE
4. NOTES AND CONVERTIBLE NOTES PAYABLE
 
 September
      30,
              
              
              December
      31,2009
              
              
              2008(Unaudited)(A)
      Notes payable
              
              $
              5,997,030
              
              
              $
              5,997,030(B)
      Convertible notes payable
              
              
              —
              
              
              
              80,000(C)
      Convertible promissory notes, net of unamortized discount of $0 and
      $134,423
              
              
              —
              
              
              
              2,016,913Total
              
              
              5,997,030
              
              
              
              8,093,943Accrued
      Interest
              
              
              1,293,250
              
              
              
              1,170,789Total
              
              $
              7,290,280
              
              
              $
              9,264,732
 
 (A) NOTES
PAYABLE
 
 Notes
payable are made up of two separate notes.
 
 As of
September 30, 2009, a balance of $4,997,130 remains through an unsecured
promissory note with no formal terms of repayment on the first note.  The
Company has accrued interest at a rate of 7% per annum, which totals $1,078,604
as of September 30, 2009.
 
 As of
September 30, 2009, a balance of $999,900 remains through an unsecured
promissory note with no formal terms of repayment on the second note.  The
Company has accrued interest at a rate of 7% per annum, which totals $214,646 as
of September 30, 2009.
 
 (B)
CONVERTIBLE NOTES PAYABLE
 
 During
May 2009, the balance of $80,000 of principal and $33,416 of accrued interest
payable was converted into 1,127,907 shares of Company common
stock.  In addition, the Company issued 580,862 shares in settlement
of any penalties associated with the remaining notes.
 
 (C)
CONVERTIBLE PROMISSORY NOTES
 
 On
February 17, 2009, the Company entered into subscription agreements with
accredited investors. The Company sold $110,000 of the Company’s 7% Convertible
Debentures, 3-year warrants to purchase a number of shares equal to 50% of the
number of shares issuable upon conversion of the debenture of the Company’s
common stock at an exercise price of $0.21, and three-year warrants to purchase
a number of shares equal to 50% of the number of shares issuable upon conversion
of the debenture shares of the Company’s common stock at an exercise price of
$0.315. The Debentures are convertible into shares of the Company’s common stock
at $.105 per share.
 
 The
Company determined that the total fair value of the warrants was $22,252 based
upon the relative value of the Black Scholes valuation of the warrants and the
underlying debt amount.  For the Black Scholes calculation, the
Company assumed no dividend yield, a risk free interest rate ranging from 1.31%
to 1.40%, expected volatility of 169.01% and an expected term of the warrants of
3 years.  The initial calculated fair value of warrants of $22,252 was
reflected by the Company as a valuation discount and an offset to the carrying
value of the Notes, and is being amortized by the straight line method over the
term of the Notes. As of September 30, 2009, the Company amortized $22,252 of
the valuation discount, which is reflected as interest expense in the Company’s
consolidated statements of operations.  During the quarter ended
September 30, 2009, all principal and interest has been converted as part of an
overall conversion request that includes all outstanding notes from this
noteholder.  On September 30, 2009, the balance of $1,633,869 of
principal and $199,648 of interest were converted into 17,462,080 shares of
Company common stock.
 
 On April
29, 2009, the Company agreed to extend the expiration of certain warrants
associated with the notes.  A charge of $399,707 was recorded for the
change in the fair value of the warrants at the time of
modification.
  16
  On
February 17, 2009, the Company entered into subscription agreement with an
accredited investor. The Company sold $30,000 of the Company’s 7% Convertible
Debentures, 3-year warrants to purchase a number of shares equal to 50% of the
number of shares issuable upon conversion of the debenture of the Company’s
common stock at an exercise price of $0.21, and three-year warrants to purchase
a number of shares equal to 50% of the number of shares issuable upon conversion
of the debenture shares of the Company’s common stock at an exercise price of
$0.315. The Debentures are convertible into shares of the Company’s common stock
at $.105 per share pursuant to the following terms.
 
 The
Company determined that the total fair value of the warrants was $5,807 based
upon the relative value of the Black Scholes valuation of the warrants and the
underlying debt amount.  For the Black Scholes calculation, the
Company assumed no dividend yield, a risk free interest rate of 1.22%, expected
volatility of 169.01% and an expected term of the warrants of 3
years.  The initial calculated fair value of warrants of $5,807 was
reflected by the Company as a valuation discount and offset to the carrying
value of the Notes, and is being amortized by the straight line method over the
term of the Notes. As of September 30, 2009, the Company amortized $5,807 of the
valuation discount, which is reflected as interest expense in the Company’s
consolidated statements of operations.  During the quarter ended
September 30, 2009, all principal and interest has been converted as part of an
overall conversion request that includes all outstanding notes from this
noteholder.  On September 30, 2009, the balance of $130,000 of
principal and $10,558 of interest were converted into 1,338,651 shares of
Company common stock.
 
 On April
29, 2009, the Company agreed to extend the expiration of certain warrants
associated with the notes.  A charge of $41,121 was recorded for the
change in the fair value of the warrants at the time of
modification.
 
 Through
September 2009, the Company made payments totaling $42,630 to reduce a
previously entered into note. On September 30, 2009, the balance of $119,836 of
principal and $9,084 of interest were converted into 1,227,810 shares of Company
common stock.
 
 In
October 2008, the Company entered into a new financing agreement for a
convertible promissory note payable totaling $25,000.  On February 11,
2009, $25,438 of principal and interest was converted into 238,096 shares of the
Company’s common stock.
 
 During
May 2009, the Company converted a previously entered into note totaling $290,000
of principal and $5,921 of interest into 2,447,790 shares of Company common
stock.
 
 In
September 2008, the Company entered into a new financing agreement for a
convertible promissory note payable totaling $50,000. On February 12, 2009, the
Company issued 250,000 shares, valued at $9,500, as a penalty to extend the
maturity to an unspecified date. On March 30, 2009, the investor foreclosed on
its lien and security interest based on the previously entered into pledge
agreement.  The note was secured by 1,000,000 shares of common stock
of the Company held by the Company’s CEO.  As a result, the holder
acknowledged that by virtue of its ownership of the shares, the note was deemed
satisfied in full.
 
 On April
17, 2009, the Company entered into an amendment to the Subscription Agreement,
dated September 17, 2008 pursuant to which the Company agreed (i) to extend the
expiration date of both the Series A Warrant and Series B Warrant issued from
October 15, 2010 to December 31, 2010 and (ii) extend the final date that the
holder may make up to two additional purchases of the Company’s securities, from
October 15, 2008 and December 15, 2008, respectively, until December 31, 2010
and December 31, 2010, respectively.  A charge of $2,477 was recorded
for the change in the fair value of the warrants at the time of
modification.
  17
  NOTE
5.  INVENTORIES
 
 Inventories
are related to the Company's consolidated joint venture Sanswire-TAO (see Note
6).  Inventories are stated at the lower of cost or market. Cost is
determined principally on a first-in-first-out average cost
basis.  Inventories consist of the following at:
 
 September
      30,
                2009
              
              
              December
      31,
                2008(unaudited)Work
      in process
              
              $
              1,110,700
              
              
              $
              —Total
      inventories
              
              
              1,110,700
              
              
              
              —
 
 NOTE
6.  JOINT VENTURE AND INTANGIBLE ASSETS
 
 On June
3, 2008, the Company restructured a previous agreement with TAO Technologies
GmbH and Professor Bernd Kroplin. The new agreement called for the establishment
of a new 50/50 US-based joint venture company to be called Sanswire-TAO that was
to be owned equally by TAO and Sanswire Corp., through its wholly-owned
subsidiary Sanswire Corp.—Florida.  The agreement required TAO
Technologies and Kroplin to transfer the patents and intellectual property of
TAO Technologies and Kroplin in the United States to Sanswire-TAO for a payment
of $3,229,000.  A remaining balance of $2,185,000 due for the investment is
included in accrued expenses as of September 30, 2009.
 
 The
Company applied the provision of FASB ASC 810 “Consolidation of Variable
Interest Entities (revised December 2003)” to its investment in
Sanswire-TAO.  Under ASC 810, a variable interest entity (VIE) is
subject to consolidation if the total equity investment at risk is not
sufficient to permit the entity to finance its activities without additional
subordinated financial support provided by any parties, including equity
holders.  On April 14, 2009, the Company arranged for financing for
Sanswire-TAO to construct its first 34 meter unmanned autonomously controlled
mid-altitude airship and entered into a contract with TAO Technologies to
construct the airship platform.  As of September 30, 2009, the Company
determined that consolidation of Sanswire-TAO was appropriate.  In
April, 2009, Sanswire-TAO entered into a services agreement whereas the Company
issued 833,333 shares during the quarter ended September 30, 2009..
 
 The
useful life of the patents and intellectual property is estimated to be 3 years
and is being amortized on a straight-line basis.  Amortization expense
for the three and nine months ended September 30, 2009 was $242,175 and
$807,250, respectively. These assets are tested for impairment annually or if
certain circumstances indicate a possible impairment may exist.  As of
September 30, 2009 there was no impairment.
 
 NOTE
7.  DERIVATIVE LIABILITIES
 
 In 2007,
the Company adopted FASB ASC 815 “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” and
FASB ASC 815 "Accounting for Derivative Instruments and Hedging Activities," as
amended by FASB ASC 815 "Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an amendment of FASB ASC 815," collectively referred
to as FASB ASC 815. FASB ASC 815 requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income.
  18
  The
derivative liabilities were valued using the Black-Scholes option pricing model
and the following assumptions:
 
 September
      30,
                2009
              
              
              December
      31,
                2008Conversion
      feature:Risk-free
      interest rate
              
              
              —
              
              
              
              0.27
      – 0.76
              %Expected
      volatility
              
              
              —
              
              
              
              118
      - 134
              %Expected
      life (in years)
              
              
              —
              
              
              
              0.33
      - 1.76Expected
      dividend yield
              
              
              —
              
              
              
              —Warrants:Risk-free
      interest rate
              
              
              0.14
      – 1.45
              %
              
              
              0.11
      – 1.00
              %Expected
      volatility
              
              
              22
      - 171
              %
              
              
              28
      - 167
              %Expected
      life (in years)
              
              
              0.12
      – 3.00
              
              
              
              0.01
      – 2.74Expected
      dividend yield
              
              
              —
              
              
              
              —
 
 Fair
      value:Conversion
      feature
              
              $
              —
              
              
              $
              495,805Warrants
              
              $
              2,633,367
              
              
              $
              252,439
 
 The
risk-free interest rate was based on rates established by the Federal
Reserve.  In 2009, the Company’s expected volatility was based upon
the historical volatility for its common stock.  The expected life of
the Debentures’ conversion option was based on the maturity of the Debentures
and the expected life of the warrants was determined by the expiration date of
the warrants.  The expected dividend yield was based upon the fact
that the Company has not historically paid dividends, and does not expect to pay
dividends in the future.
 
 NOTE
8. CONTINGENCIES
 
 Securities and Exchange
Commission
 
 On
September 28, 2006, the Company received a formal order of investigation from
the SEC. The formal order only named the Company and was not specific to any
particular allegations. Through the use of subpoenas, the SEC has requested
documentation from certain officers and directors of the Company. In subsequent
subpoenas, the SEC has asked for additional documents and
information.
 
 On
October 5, 2007, the Company received a "Wells Notice" from the SEC in
connection with the SEC’s ongoing investigation of the Company. The Wells Notice
provides notification that the staff of the SEC intends to recommend to the
Commission that it bring a civil action against the Company for possible
violations of the securities laws including violations of Sections 5 and 17(a)
of the Securities Act of 1933; Sections 10(b), 13(a), and 13(b)(2)(A) & (B)
of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20,
13a-1, 13a-11, and 13a-13 thereunder; and seeking as relief a permanent
injunction, civil penalties, and disgorgement with prejudgment interest. The
Staff is also considering recommending that the SEC authorize and institute
proceedings to revoke the registration of Company’s securities pursuant to
Section 12(j) of the Exchange Act.
 
 On May 2,
2008, the Securities and Exchange Commission (“SEC”) filed a lawsuit in the
United States District Court for the Southern District of Florida against
GlobeTel Communications Corp. (the “Company”) and three former officers of the
Company, Timothy J. Huff, Thomas Y. Jimenez and Lawrence E. Lynch. The SEC
alleges, among other things, that the Company recorded $119 million in revenue
on the basis of fraudulent invoices created by Joseph Monterosso and Luis
Vargas, two individuals formerly employed by the Company who were in charge of
its wholesale telecommunications business.
  19
  The SEC
alleges that the Company violated Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933, as amended, Sections 10(b), 13(a), 13(b)(2)(A) and
13(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 under the Exchange Act.
The SEC seeks as relief a permanent injunction, civil penalties, and
disgorgement with prejudgment interest. The Commission subsequently consolidated
this action with another pending action involving former officers of the
Company. The Commission has also moved to amend its complaint against the
Company to include additional allegations of wrongdoing beginning in 2002, but
which does not add any new defendants. The Company has been vigorously defending
itself in this action.
 
 Hudson Bay Fund LP et
al.
 
 Hudson
Bay Fund LP and Hudson Bay Overseas Fund Ltd. filed an action against the
Company relating to the warrants attached to a Subscription Agreement between
those entities and the Company. The Hudson Bay entities are seeking to reprice
the warrants, increase the number of shares they can purchase pursuant to the
warrants, certain equitable remedies, and unspecified damages. The Company has
retained outside counsel and has filed an answer and affirmative defenses in the
case. The Company intends to vigorously defend the action, but the outcome of
the action cannot be predicted.
 
 Former
Consultants
 
 The
Company is a defendant in two lawsuits filed by Matthew Milo and Joseph
Quattrocchi, two former consultants, filed in the Supreme Court of the State of
New York (Richmond County, Case no. 12119/00 and 12118/00). These matters were
subsequently consolidated as a result of an Order of the court and now bear the
singular index number 12118/00. The original lawsuits were for breach of
contract. The complaint demands the delivery of 10,000,000 pre split shares of
ADGI stock to Milo and 10,000,000 to Quattrocchi. The Company was entered into
the action as ADGI was the predecessor of the Company. The suit also requests an
accounting for the sales generated by the consultants and attorneys fees and
costs for the action.
 The
lawsuits relate to consulting services that were provided by Mr. Milo and Mr.
Quattrocchi and a $50,000 loan advanced by these individuals, dated May 14,
1997, of which $35,000 has been repaid.
 
 The
Company entered into an agreement with Mr. Milo and Mr. Quattrocchi as
consultants on June 25, 1998. The agreement was amended on August 15, 1998. On
November 30, 1998, both Mr. Milo and Mr. Quattrocchi resigned from their
positions as consultants to the Company without fulfilling all of their
obligations under their consulting agreement. The Company issued 3 million pre
split shares each to Mr. Milo and Mr. Quattrocchi as consideration under the
consulting agreement. The Company has taken the position that Mr. Milo and Mr.
Quattrocchi received compensation in excess of the value of the services that
they provided and the amounts that they advanced as loans.
 
 Mr. Milo
and Mr. Quattrocchi disagreed with the Company’s position and commenced action
against us that is pending in the Supreme Court of the State of New York. Mr.
Milo and Mr. Quattrocchi claim that they are entitled to an additional
24,526,000 pre split shares of common stock as damages under the consulting
agreement and to the repayment of the loan balance. The Company believes that it
has meritorious defenses to the Milo and Quattrocchi action, and the Company has
counterclaims against Mr. Milo and Mr. Quattrocchi.
 
 With
regard to the issues related to original index number 12119/00, as a result of a
summary judgment motion, the plaintiffs were granted a judgment in the sum of
$15,000. The rest of the plaintiff's motion was denied. The court did not order
the delivery of 24,526,000 pre split shares of ADGI common stock as the decision
on that would be reserved to time of trial.
 
 An Answer
and Counterclaim had been interposed on both of these actions. The Answer denies
many of the allegations in the complaint and is comprised of eleven affirmative
defenses and five counterclaims alleging damages in the sum of $1,000,000. The
counterclaims in various forms involve breach of contract and breach of
fiduciary duty by the plaintiffs.  For the most part, the summary
judgment motions that plaintiffs brought clearly stated that their theories of
recovery and the documents that they will rely on in prosecuting the action. The
case was assigned to a judicial hearing officer and there was one week of trial.
The trial has been since adjourned with no further trial dates having been
set.
  20
  It is
still difficult to evaluate the likelihood of an unfavorable outcome at this
time in light of the fact that there has been no testimony with regard to the
actions. However, the plaintiffs have prevailed with regard to their claim of
$15,000 as a result of the lawsuit bearing the original index Number
12119/00.
 
 This case
went before a Judicial Hearing Officer on July 6 and 7, 2006. No resolution
occurred during the July hearing and the Judicial Hearing Officer has asked for
written statements of facts and law. The outcome cannot be projected with any
certainty.  However, the Company does not believe that it will be
materially adversely affected by the outcome of the proceeding. The Company has
not been informed of any further developments since the hearing.
 
 Joseph
Monterosso
 
 In
October 2007 the Company filed a lawsuit in the Circuit Court for Broward
County, Florida against Joseph J. Monterosso alleging Libel, Slander and
Defamation, Tortuous Interference, Violations of FS § 836.05 (Threats
Extortion)  and violations of FS §517 (Securities Fraud). Mr.
Monterosso has not yet been served with the complaint pending additional
information arising from the SEC lawsuit.  This action has been
dismissed for lack of prosecution but may be refilled by the Company in the
future.
 
 Mitchell Siegel v.
GlobeTel
 
 On
February 2, 2007, The Company was sued in the Circuit Court for Broward County,
Florida entitled Mitchell Siegel v. GlobeTel Communications Corp. , Case no.
0702456 (“the Siegel Lawsuit”). In this action, Siegel sued the Company for
breach of contract in regards to a Key Executive Employment
Agreement.  On February 15, 2008, both parties entered into a
settlement agreement whereas Mr. Siegel would receive $175,000 worth of stock,
payable over 12 months, and 50% of the gross proceeds, up to a total amount of
$300,000, received from an October 2006 agreement. During 2009, the Company paid
the remaining $43,750 in the Company’s common stock.
 
 Trimax
Wireless
 
 On April
6, 2009, the Company entered into a settlement agreement with Ulrich Altvater, a
former employee, and his company, Trimax Wireless.  As per the terms
of the settlement, Mr. Altvater will return 1,640,000 shares of the Company’s
common stock and certain equipment that was held by Trimax Wireless. The Company
has received the shares and certain equipment pursuant to the settlement and the
matter has been dismissed.
 
 NOTE
9. COMMON STOCK TRANSACTIONS
 
 During
the nine month period ended September 30, 2009, the Company issued an aggregate
of 64,286,887 shares of common stock for cash, debt, board compensation, and
consulting agreements including 1,000,000 shares for the replacement of shares
lost when an investor foreclosed on its lien and security interest based on the
previously entered into pledge agreement. Of the shares issued, 12,050,000
shares, or 30.1% were issued to insiders and affiliates as restricted securities
and in accordance with SEC Rule 144. The common stock issued was valued at
prices ranging from $0.038 to $0.14 per share, based on the closing market
prices on the date the board of directors authorized the issuances. Subsequent
to September 30, 2009, the Company issued an aggregate of 125,000 shares of
common stock for previously entered into agreements.
  On
November 2, 2009, holders of a majority of our voting shares of our company,
Sanswire Corp., acted by written consent in lieu of a special meeting of
shareholders to an adopt amendment to our articles of incorporation to increase
the number of shares of common stock which we are authorized to issue from
250,000,000 shares to 500,000,000 shares.
  NOTE
10. STOCK OPTIONS AND WARRANTS
 
 STOCK
OPTIONS
 
 During
the nine months ended September 30, 2009, the Company issued 19,672,222 options
to acquire common stock.  The Company recorded $0 and $1,707,780 of
compensation expense related to these options to acquire common stock in the
three and nine months ended September 30, 2009, respectively.
  21
  The fair
value of grants issued in the three and nine months ended September 30, 2009
were determined using a Black-Scholes option pricing model with the following
assumptions: 1.5% average risk-free interest rate; 184% expected volatility;
three year expected term, and 0% dividend yield.
 
 Employee
options vest according to the terms of the specific grant and expire from 3 to
5 years from date of grant. As of September 30, 2009, all options issued
and outstanding have fully vested. Stock option activity as of September 30,
2009 was as follows:
 
 Number
      of Options
                (in
      shares)
              
              
              Weighted
      Average
                Exercise
                PriceOutstanding
      at December 31, 2008
              
              
              15,982,752
              
              
              $
              .350Options
      Granted
              
              
              19,672,222
              
              
              
              .059Options
      Exercised
              
              
              (250,000
              )
              
              
              .105Options
      Cancelled
              
              
              (293,760
              )
              
              
              1.773Outstanding
      at September 30, 2009
              
              
              35,111,214
              
              
              $
              .177
 
 The
following table summarizes information about stock options outstanding as of
September 30, 2009:
  Options
      Outstanding
                
                
                Options ExercisableRange of Exercise
                    Prices
                
                
                Number of
                    Shares
                
                
                Weighted Average
                    Exercise Price
                
                
                Weighted Average
                    Remaining Contractual
                    Life (in years)
                
                
                Number of
                    Shares
                
                
                Weighted Average
                    Exercise Price$
                0.045 to $0.37
                
                
                
                35,111,214
                
                
                $
                0.177
                
                
                
                1.58
                
                
                
                35,111,214
                
                
                $
                0.17735,111,214
                
                
                
                
                
                
                
                
                
                
                
                35,111,214
 
 WARRANTS
 
 The
following table summarizes certain information about the Company’s stock
purchase warrants (including the warrants discussed in note 4).
 
 Warrants
                Class
      A
              
              
              Warrants
                Class
      B
              
              
              Weighted
      Average
                Exercise
                PriceOutstanding
      at December 31, 2008
              
              
              13,987,204
              
              
              
              9,634,763
              
              
              $
              0.253Warrants
      Granted
              
              
              4,444,998
              
              
              
              4,413,252
              
              
              
              0.252Warrants
      Expired
              
              
              (3,305,382
              )
              
              
              (2,203,588
              )
              
              
              (0.252
              )Outstanding
      at September 30, 2009
              
              
              15,126,820
              
              
              
              11,844,427
              
              
              $
              0.253
 
 The
aggregate intrinsic value of 35,111,214options and
15,126,820 Class A and 11,844,427 Class B warrants outstanding and exercisable
as of September 30, 2009 was $5,321,551. The aggregate intrinsic value for the
options is calculated as the difference between the price of the underlying
awards and quoted price of the Company’s common shares for the options that were
in-the-money as of September 30, 2009. At September 30, 2009, all warrant
shares were vested. Therefore there is no unamortized cost to be recognized in
future periods.
 
 NOTE
11. PREFERRED STOCK
 
 On May 3,
2009, the Board of Directors approved the creation of a Series E Preferred
Stock.  The terms of the Series E Preferred Stock were subsequently
amended on May 14, 2009. The Series E Preferred Stock, as amended, does not pay
dividends but each holder of Series E Preferred Stock shall be entitled to 21.5
votes for each share of common stock that the Series E Preferred Stock shall be
convertible into.  The Series E Preferred Stock, as amended, has a
conversion price of $0.105 and a stated value of $6.26.  Each share of
Series E Preferred Stock is convertible, at the option of the holder, into such
number of shares of common stock of the Company as determined by dividing the
Stated Value by the Conversion Price.  The Series E Preferred Stock
has no liquidation preference.  The Company also cancelled all the
authorized shares associated with the Series A, B, C, and D of Preferred
Stock.
 
 As of
September 30, 2009, the Company has 100,000 shares of Series E Preferred Stock
outstanding.
  22
  NOTE
12. INCOME TAXES
 
 The
Company has accumulated net operating losses, which can be used to offset future
earnings. Accordingly, no provision for income taxes is recorded in the
financial statements. A deferred tax asset for the future benefits of net
operating losses and other differences is offset by a 100% valuation allowance
due to the uncertainty of the Company's ability to utilize the losses. These net
operating losses begin to expire in the year 2021.
 
 NOTE
13. SUBSEQUENT EVENTS
 
 The
Company has evaluated subsequent events from the balance sheet date through
November 16, 2009, the date the accompanying financial statements were
issued.
 
 The
following are material subsequent events:
 
 Changes in Registrant’s
Certifying Accountant
 
 On
October 19, 2009, the Company dismissed Weinberg & Co., as its independent
certifying accountant. The Company’s Board of Directors approved of the
dismissal on October 20, 2009. There were no disputes or disagreements between
Weinberg & Co. and the Company during the previous two fiscal years. Except
for the provision of a “Going Concern” opinion, the reports of Weinberg &
Co. on the Company’s financial statements for the years ended December 31, 2008
and 2007 did not contain an adverse opinion or disclaimer of opinion, and such
reports were not qualified or modified as to uncertainty, audit scope, or
accounting principle.
 
 Change in Independent
Registered Public Accounting Firm
 
 On
October 20, 2009, the Company engaged Rosen Seymour Shapss Martin & Company
LLP (“RSSM”), as its independent registered public accounting firm, to audit the
Company’s financial statements. The decision to engage RSSM was approved by the
Company’s Board of Directors at a Board meeting called for such
purpose.
 
 Majority Shareholder
Action
  On August
6, 2009, our Board of Directors authorized and approved, subject to shareholder
approval, an increase in our authorized common stock from 250,000,000 shares to
500,000,000 shares, which our Board of Directors deemed to be in the best
interests of our company and our shareholders. Our Board of Directors further
authorized the preparation and circulation of this Information Statement and a
shareholders' consent to the holders of a majority of our outstanding voting
capital stock.
  On
November 2, 2009, holders of a majority of our voting shares of our company,
Sanswire Corp., acted by written consent in lieu of a special meeting of
shareholders to an adopt amendment to our articles of incorporation to increase
the number of shares of common stock which we are authorized to issue from
250,000,000 shares to 500,000,000 shares.
 
 23
  Item
2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
 
 Forward-looking
Information
 
 This
quarterly report contains forward-looking statements. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. These statements relate to future
events or to our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. There are a number of factors that could cause our actual
results to differ materially from those indicated by such forward-looking
statements. See our annual report on Form 10-K for the year ended December 31,
2008.
 
 Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance,
or achievements. Moreover, we do not assume responsibility for the accuracy and
completeness of such forward-looking statements. We are under no duty to update
any of the forward-looking statements after the date of this report to conform
such statements to actual results.
 
 General
 
 Sanswire
Corp. ("Sanswire," "GlobeTel", “we”, “us”, “our”, or the “Company”) is focused
on the design, construction and marketing of various aerial vehicles most of
which would be capable of carrying payloads that provide persistent surveillance
and security solutions at various altitudes. The airships and auxiliary products
are intended for end users that include military, defense and government-related
entities.
 
 From 2002
to 2007, the Company was involved in the following business
sectors:
 
 ·
              stored
      value card services;
 ·
              wholesale
      telecommunications services;
 ·
              voice
      over IP;
 ·
              wireless
      broadband; and
 ·
              high
      altitude airships.
 
 These
businesses were run through various subsidiaries. The Company discontinued
operations in all but the high altitude airship sector.
 
 In 2007, we began focusing exclusively on
opportunities through our wholly-owned subsidiary at the time, Sanswire
Networks. The opportunities associated with Sanswire Networks were related to
the Lighter Than Air (LTA) Unmanned Aerial Vehicle (UAV) market, and we, through
the subsidiary, sought to build and run a UAV business that includes low-, mid-
and high-altitude, lighter-than-air vehicles intended to provide customers
advanced seamless wireless broadband capabilities and surveillance sensor
suites.
 
 On
September 22, 2008, we effected a name change to Sanswire Corp. in recognition
of the entity that contained our sole business focus. Thus, moving forward, the
Company is Sanswire Corp., whose primary business is the design, construction
and marketing of a variety of aerial vehicles through a joint venture with TAO
Technologies, Stuttgart, Germany, named Sanswire-TAO Corp.
 
 The High
Altitude class of prospective airships are generally referred to as HAAs
(High Altitude Airships) but have also been called HAPs and HALEs (High Altitude
Platforms, High Altitude Long Endurance). They have been designed to be able to
keep a station in one location in the Stratosphere, at approximately 65,000 ft
for durations of 30 days or more.
 
 RESULTS
OF OPERATIONS
 
 The
following discussion and analysis summarizes the results of operations of the
Company for the three and nine month periods ended September 30, 2009 and
2008.
 
 COMPARISON
OF THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
 REVENUES.
The Company had no revenue for the three months ended September 30, 2009 and
2008.
  24
  OPERATING
EXPENSES. Our operating expenses consist primarily of payroll and related taxes,
professional and consulting services, expenses for executive and administrative
personnel and insurance, telephone and communications, facilities expenses,
travel and related expenses, and other general corporate expenses. Our operating
expenses for the three month period ended September 30, 2009 were $1,546,560
compared to the three month period ended September 30, 2008 which had operating
expenses of $766,819 an increase of $779,741 or 101.7%. The increase was
primarily due to charges associated with stock and employee stock options
issuances.
 
 During
the three month period ended September 30, 2009 and 2008, Sanswire and its
subsidiaries incurred payroll tax liabilities during the normal course of
business. During 2008, the Company has reported its payroll tax liabilities on a
timely basis; however the Company failed to deposit the appropriate withholding
amounts during 2008. For 2009, the Company has engaged a third party to process
its payroll information, including appropriate payroll taxes and has thus has
been timely and is current in its payroll tax payments. In addition, the Company
has recognized its past issue and contacted the IRS accordingly to make
arrangement to pay any taxes due, which is currently estimated to be at least
$200,000 including liabilities associated with the Company’s subsidiaries that
are classified in discontinued operations. The Company may be subject to
penalties and interest from the IRS.
 
 LOSS FROM
OPERATIONS. We had an operating loss of $1,546,560 for the three month period
ended September 30, 2009 as compared to an operating loss of $766,819 for the
three month period ended September 30, 2008, primarily due to charges associated
with stock and employee option issuances as described above, including lower
operating costs and reductions of our various programs.
 
 OTHER
INCOME (EXPENSE). We had net other income totaling $53,886 during the three
month period ended September 30, 2009 compared to other income of $333,136 for
the three month period ended September 30, 2008. This variance was due primarily
to the non cash gains related to derivatives of $251,031 during 2009 compared to
$751,833 during 2008.
  Interest
expense for the three month period ended September 30, 2009 was $197,145
compared to $418,697 for the three month period ended September 30, 2008.
Interest expense decrease was primarily due to an decrease in non cash charges
related to the Company’s convertible debentures as well as note conversions that
occurred during 2009.
 
 LOSS FROM
DISCONTINUED OPERATIONS. During the three month periods ended September 30, 2009
and 2008, we had no activity related to our discontinued
operations.
 
 NET LOSS.
We had a net loss of $1,492,674 in the three month period ended September 30,
2009 compared to $433,683 in the three month period ended September 30, 2008.
The increase in net loss is primarily attributable to the increase in the
operating expenses as discussed above.
 
 COMPARISON OF NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
 REVENUES.
The Company had no revenue for the nine months ended September 30, 2009 and
2008.
 
 OPERATING
EXPENSES. Our operating expenses consist primarily of payroll and related taxes,
professional and consulting services, expenses for executive and administrative
personnel and insurance, telephone and communications, facilities expenses,
travel and related expenses, and other general corporate expenses. Our operating
expenses for the nine month period ended September 30, 2009 were $6,272,789
compared to the nine month period ended September 30, 2008 which had operating
expenses of $2,515,386 an increase of $3,757,403 or 149.4%. The increase was
primarily due to charges associated with stock and employee stock options
issuances.
 
 During
the three month period ended September 30, 2009 and 2008, Sanswire and its
subsidiaries incurred payroll tax liabilities during the normal course of
business. During 2008, the Company has reported its payroll tax liabilities on a
timely basis; however the Company failed to deposit the appropriate withholding
amounts during 2008. For 2009, the Company has engaged a third party to process
its payroll information, including appropriate payroll taxes and has thus has
been timely and is current in its payroll tax payments. In addition, the Company
has recognized its past issue and contacted the IRS accordingly to make
arrangement to pay any taxes due, which is currently estimated to be at least
$200,000 including liabilities associated with the Company’s subsidiaries that
are classified in discontinued operations. The Company may be subject to
penalties and interest from the IRS.
  25
  LOSS FROM
OPERATIONS. We had an operating loss of $6,272,789 for the nine month period
ended June 30, 2009 as compared to an operating loss of $2,515,386 for the nine
month period ended September 30, 2008, primarily due to charges associated with
stock and employee option issuances as described above, including lower
operating costs and reductions of our various programs.
 
 OTHER
INCOME (EXPENSE). We had net other expenses totaling $2,969,064 during the nine
month period ended September 30, 2009 compared to $1,244,160 for the nine month
period ended September 30, 2008. This variance was due primarily to the non cash
charges related to the modifications of warrants of $443,305 and non cash
charges related to derivatives of $1,885,123 during 2009 compared to the non
cash charges related to the modifications of our convertible debentures of
$1,096,650 in 2008.
 
 Interest
expense for the nine month period ended September 30, 2009 was $1,083,941
compared to $856,218 for the nine month period ended September 30, 2008.
Interest expense increase was primarily due to an increase in non cash charges
related to the Company’s convertible debentures.
 
 LOSS FROM
DISCONTINUED OPERATIONS. During the nine month period ended September 30, 2009
we had no activity related to our discontinued operations compared to a loss of
$196 during the nine month period ended September 30, 2008.
 
 NET LOSS.
We had a net loss of $9,241,853 in the nine month period ended September 30,
2009 compared to $3,759,742 in the nine month period ended September 30, 2008.
The increase in net loss is primarily attributable to the increase in the
operating expenses as discussed above.
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 ASSETS.
At September 30, 2009, the Company had total assets of $3,557,698 compared to
total assets of $3,240,215 as of December 31, 2008.
 
 Current
assets at September 30, 2009, were $1,124,798 compared to $11,215 at December
31, 2008 which were comprised of $7,692 in cash and cash equivalents and
$1,110,700 in work in process/inventory.
 
 The
Company had $2,421,750 in intangible assets as of September 30, 2009 compared to
none as of December 31, 2008.
 
 LIABILITIES.
At September 30, 2009, the Company had total liabilities of $19,366,637 compared
to total liabilities of $18,692,369 as of December 31, 2008.  The
increase of $674,268 was principally due to $1,885,123 in changes associated
with the derivative liabilities (see note 7 of the financial
statements.)
 
 CASH
FLOWS. Our cash used in operating activities was $1,454,006 compared to $397,736
for the comparative period. The increase was primarily due to the increased
level of operations and operating activities and changes in our current assets
and liabilities.
 
 Net cash
provided by financing activities was $1,468,039 principally from the proceeds of
the sale of common stock, as compared to $757,140 for the nine months ended
September 30, 2008.
 
 The
accompanying condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As
reflected in the accompanying condensed consolidated financial statements, the
Company had a net loss of $9,241,853 and used cash in operating activities of
$1,454,006 for the nine months ended September 30, 2009, and had a working
capital deficit of $18,241,839 and a stockholders’ deficit of $15,808,939
at September 30, 2009.  These factors raise substantial doubt about
the Company’s ability to continue as a going concern. The ability of the Company
to continue as a going concern is dependent upon the Company’s ability to raise
additional funds and implement its business plan. The condensed consolidated
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. The Company anticipates
that a net loss will continue for the balance of 2009.
  26
  Throughout
2008 and continuing into 2009, the Company has been dependent upon monthly
funding from its existing debt holders. Funding decisions have typically not
extended beyond thirty days at any given time, and the Company does not
currently have a defined funding source. Funding delays and uncertainties have
seriously damaged vendor relationships, new product development and revenues. In
the absence of continued monthly funding by its current debt holders, the
Company would have insufficient funds to continue operations. There is no
assurance that additional funding from the current debt holders will be
available or available on terms and conditions acceptable to the
Company.
 
 Subsequent
to September 30, 2009, the Company has raised $100,000 from investors; however
this is not adequate funding to cover the Company’s working capital deficit or
the operating loss for the three month period ended September 30, 2009 of
approximately $1,546,560.
 
 As
reflected in the accompanying financial statements, during the nine month period
ended September 30, 2009 we had a net loss of $9,241,853 compared to a net loss
of $3,759,742 during the three month period ended September 30, 2008.
Consequently, there is an accumulated deficit of $134,544,435 at September 30,
2009 compared to $125,302,582 at December 31, 2008.
  The
Company's Articles of Incorporation currently allow for issuance of a maximum of
250,000,000 shares of common stock. As of November 3, 2009, the Company has
approximately 249,115,902 shares outstanding, leaving an unissued balance of
authorized shares that is not sufficient to service the maximum requirements of
all of its convertible securities. On November 2, 2009, holders of a majority of
our voting shares of our company, Sanswire Corp., acted by written consent in
lieu of a special meeting of shareholders to an adopt amendment to our articles
of incorporation to increase the number of shares of common stock which we are
authorized to issue from 250,000,000 shares to 500,000,000 shares.  As
of November 2, 2009, we had 249,115,902 shares of our common stock outstanding.
The Company is obligated under various existing agreements, options and warrants
to issue additional shares of our common stock.
 
 Critical
Accounting Policies and Use of Estimates
 
 Estimates
 
 The
preparation of condensed consolidated financial statements requires us to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities, the reported amounts and classification of expense, and the
disclosure of contingent assets and liabilities. We evaluate our estimates and
assumptions on an ongoing basis. We base our estimates on historical experience
and various other assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.
 
 Accounting
for stock options
 
 We
believe that it is important for investors to be aware that there is a high
degree of subjectivity involved in estimating the fair value of stock-based
compensation, that the expenses recorded for stock-based compensation in the
Company’s financial statements may differ significantly from the actual value
(if any) realized by the recipients of the stock awards, and that the expenses
recorded for stock-based compensation will not result in cash payments from the
Company.
 
 Item
3.  Quantitative and Qualitative Disclosures About Market
Risk
 
 As a
“smaller reporting company” as defined by Regulation S-K, the Company is not
required to provide information required by this Item.
  27
  Item
4. Controls and Procedures
 
 Evaluation
of Disclosure Controls and Procedures
 
 As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company carried out an evaluation under the
supervision and with the participation of the Company’s Chief Executive Officer
and Chief Financial Officer (the “Reviewing Officers”), of the effectiveness of
the Company's disclosure controls and procedures as of September 30, 2009 (the
“Quarter”). In designing and evaluating the Company's disclosure controls and
procedures, the Company and its management recognize that there are inherent
limitations to the effectiveness of any system of disclosure controls and
procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of
achieving their desired control objectives. Additionally, in evaluating and
implementing possible controls and procedures, the Company's management was
required to apply its reasonable judgment. Furthermore, in the course of this
evaluation, management considered certain internal control areas, including
those discussed below, in which we have made and are continuing to make changes
to improve and enhance controls. Based upon the required evaluation, the
Reviewing Officers concluded that as of the end of the Quarter, the Company's
disclosure controls and procedures were not effective to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms,
except for the establishment of the audit committee as contemplated
below.
 
 Initially,
on May 4, 2007 the Company determined that the Company had ineffective controls
over revenue recognition.   On September 3, 2009, the Company
then also determined that it has not properly accounted for various derivative
liabilities resulting in this restatement.
 
 We have
categorized our efforts to address our material weaknesses into two
phases.  In the first phase of the program, already completed as of
September 30, 2007, we hired consultants and accounting consultants to review
our financial statements and prepare the restatement of our financial
statements.  Our remediation measures relating to revenue recognition
include a review by management of revenue items other than normal sales and also
the discontinuation of the operations of our Centerline Communications LLC
subsidiary for which we had previously restated revenue.
 
 In the
second phase of the program, we have commenced to and continue to implement
certain new policies and procedures such as:
 
 a.  
Seeking to recruit board members independent of management;
 
 b.  
Granting Board committees standing authority to retain counsel and special or
expert advisors of their own choice;
 
 c. Seeking
outside review of acquisition transactions
 
 d. Establishment
of an audit committee
 
 e. Upon
adequate funding, hiring additional staff leading to the segregation of duties
to enable a better control environment
  Our
remediation efforts in light of the improper accounting of our derivative
liabilities include restating our financial statements for March 31, June 30,
September 30 and December 31, 2008 as well as March 31, 2009.
 
 Changes
in Internal Control Over Financial Reporting
 
 Except as
set forth above, there have been no changes in our internal control over
financial reporting that occurred during the Quarter that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.
  28
  PART
II - OTHER INFORMATION
  Item
1. Legal Proceedings
 
 Securities and Exchange
Commission
 
 On
September 28, 2006, the Company received a formal order of investigation from
the SEC. The formal order only named the Company and was not specific to any
particular allegations. Through the use of subpoenas, the SEC has requested
documentation from certain officers and directors of the Company. In subsequent
subpoenas, the SEC has asked for additional documents and
information.
 
 On
October 5, 2007, the Company received a "Wells Notice" from the SEC in
connection with the SEC’s ongoing investigation of the Company. The Wells Notice
provides notification that the staff of the SEC intends to recommend to the
Commission that it bring a civil action against the Company for possible
violations of the securities laws including violations of Sections 5 and 17(a)
of the Securities Act of 1933; Sections 10(b), 13(a), and 13(b)(2)(A) & (B)
of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20,
13a-1, 13a-11, and 13a-13 thereunder; and seeking as relief a permanent
injunction, civil penalties, and disgorgement with prejudgment interest. The
Staff is also considering recommending that the SEC authorize and institute
proceedings to revoke the registration of Company’s securities pursuant to
Section 12(j) of the Exchange Act.
 
 On May 2,
2008, the Securities and Exchange Commission (“SEC”) filed a lawsuit in the
United States District Court for the Southern District of Florida against
GlobeTel Communications Corp. (the “Company”) and three former officers of the
Company, Timothy J. Huff, Thomas Y. Jimenez and Lawrence E. Lynch. The SEC
alleges, among other things, that the Company recorded $119 million in revenue
on the basis of fraudulent invoices created by Joseph Monterosso and Luis
Vargas, two individuals formerly employed by the Company who were in charge of
its wholesale telecommunications business.
 
 The SEC
alleges that the Company violated Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933, as amended, Sections 10(b), 13(a), 13(b)(2)(A) and
13(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 under the Exchange Act.
The SEC seeks as relief a permanent injunction, civil penalties, and
disgorgement with prejudgment interest. The Commission subsequently consolidated
this action with another pending action involving former officers of the
Company. The Commission has also moved to amend its complaint against the
Company to include additional allegations of wrongdoing beginning in 2002, but
which does not add any new defendants. The Company has been vigorously defending
itself in this action.
 
 Hudson Bay Fund LP et
al.
 
 Hudson
Bay Fund LP and Hudson Bay Overseas Fund Ltd. filed an action in Supreme Court
of the State of New York, New York County (Case No.650366/09 against the
Company claiming declaratory judgment, specific performance, and breach of
contract relating to the warrants it acquired in connection with its
investment.  The Hudson Bay entities are seeking to reprice the
warrants, increase the number of shares they can purchase pursuant to the
warrants, certain equitable remedies, and unspecified damages. The Company has
retained outside counsel and has filed an answer and affirmative defenses in the
case. The Company intends to vigorously defend the action, but the outcome of
the action cannot be predicted.
 
 Former
Consultants
 
 The
Company is a defendant in two lawsuits filed by Matthew Milo and Joseph
Quattrocchi, two former consultants, filed in the Supreme Court of the State of
New York (Richmond County, Case no. 12119/00 and 12118/00). These matters were
subsequently consolidated as a result of an Order of the court and now bear the
singular index number 12118/00. The original lawsuits were for breach of
contract. The complaint demands the delivery of 10,000,000 pre split shares of
ADGI stock to Milo and 10,000,000 to Quattrocchi. The Company was entered into
the action as ADGI was the predecessor of the Company. The suit also requests an
accounting for the sales generated by the consultants and attorneys fees and
costs for the action. The
lawsuits relate to consulting services that were provided by Mr. Milo and Mr.
Quattrocchi and a $50,000 loan advanced by these individuals, dated May 14,
1997, of which $35,000 has been repaid.
  29
  The
Company entered into an agreement with Mr. Milo and Mr. Quattrocchi as
consultants on June 25, 1998. The agreement was amended on August 15, 1998. On
November 30, 1998, both Mr. Milo and Mr. Quattrocchi resigned from their
positions as consultants to the Company without fulfilling all of their
obligations under their consulting agreement. The Company issued 3 million pre
split shares each to Mr. Milo and Mr. Quattrocchi as consideration under the
consulting agreement. The Company has taken the position that Mr. Milo and Mr.
Quattrocchi received compensation in excess of the value of the services that
they provided and the amounts that they advanced as loans.
 
 Mr. Milo
and Mr. Quattrocchi disagreed with the Company’s position and commenced action
against us that is pending in the Supreme Court of the State of New York. Mr.
Milo and Mr. Quattrocchi claim that they are entitled to an additional
24,526,000 pre split shares of common stock as damages under the consulting
agreement and to the repayment of the loan balance. The Company believes that it
has meritorious defenses to the Milo and Quattrocchi action, and the Company has
counterclaims against Mr. Milo and Mr. Quattrocchi.
 
 With
regard to the issues related to original index number 12119/00, as a result of a
summary judgment motion, the plaintiffs were granted a judgment in the sum of
$15,000. The rest of the plaintiff's motion was denied. The court did not order
the delivery of 24,526,000 pre split shares of ADGI common stock as the decision
on that would be reserved to time of trial.
 
 An Answer
and Counterclaim had been interposed on both of these actions. The Answer denies
many of the allegations in the complaint and is comprised of eleven affirmative
defenses and five counterclaims alleging damages in the sum of $1,000,000. The
counterclaims in various forms involve breach of contract and breach of
fiduciary duty by the plaintiffs.
 
 For the
most part, the summary judgment motions that plaintiffs brought clearly stated
that their theories of recovery and the documents that they will rely on in
prosecuting the action. The case was assigned to a judicial hearing officer and
there was one week of trial. The trial has been since adjourned with no further
trial dates having been set.
 
 It is
still difficult to evaluate the likelihood of an unfavorable outcome at this
time in light of the fact that there has been no testimony with regard to the
actions. However, the plaintiffs have prevailed with regard to their claim of
$15,000 as a result of the lawsuit bearing the original index Number
12119/00.
 
 This case
went before a Judicial Hearing Officer on July 6 and 7, 2006. No resolution
occurred during the July hearing and the Judicial Hearing Officer has asked for
written statements of facts and law. The outcome cannot be projected with any
certainty.  However, the Company does not believe that it will be
materially adversely affected by the outcome of the proceeding. The Company has
not been informed of any further developments since the hearing.
 
 Joseph
Monterosso
 
 In
October 2007 the Company filed a lawsuit in the Circuit Court for Broward
County, Florida against Joseph J. Monterosso alleging Libel, Slander and
Defamation, Tortuous Interference, Violations of FS § 836.05 (Threats
Extortion)  and violations of FS §517 (Securities Fraud). Mr.
Monterosso has not yet been served with the complaint pending additional
information arising from the SEC lawsuit.  This action has been
dismissed for lack of prosecution but may be refilled by the Company in the
future.
 
 Mitchell Siegel v.
GlobeTel
 
 On
February 2, 2007, GlobeTel was sued in the Circuit Court for Broward County,
Florida entitled Mitchell Siegel v. GlobeTel Communications Corp. , Case no.
0702456 (“the Siegel Lawsuit”). In this action, Siegel sued the Company for
breach of contract in regards to a Key Executive Employment
Agreement.  On February 15, 2008, both parties entered into a
settlement agreement whereas Mr. Siegel would receive $175,000 worth of stock,
payable over 12 months, and 50% of the gross proceeds, up to a total amount of
$300,000, received from an October 2006 agreement. During 2008, the Company paid
$131,250 in the Company’s common stock associated with the settlement agreement.
During 2009, the Company paid the remaining $43,750 in the Company’s common
stock.
  30
  Trimax
Wireless
 
 On July
3, 2007 the Company filed suit against its former employee Ulrich Altvater and
his company Trimax Wireless seeking the return of certain equipment held at the
former GlobeTel Wireless offices and for the return of $175,000 lent to Altvater
by the Company. The replevin action against Trimax was dismissed on the basis of
venue. In August 2007, Altvater and Trimax filed suit against the Company
alleging, defamation, conversion, breach of contract and seeking injunctive
relief.  On April 6, 2009, the parties entered into a settlement
agreement.  As per the terms of the settlement, Mr. Altvater will
return 1,640,000 shares of the Company’s common stock and certain equipment that
was held by Mr. Altvater’s company, Trimax Wireless.
 
 Item
1A. Risk Factors
 
 As a
“smaller reporting company” as defined by Regulation S-K, the Company is not
required to provide information required by this Item.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 During
the three month period ended September 30, 2009, the Company issued an aggregate
of 24,307,127 shares of common stock for cash, debt, and consulting
agreements.  Of the shares issued, no shares were issued to insiders
and affiliates as restricted securities and in accordance with SEC Rule 144. The
common stock issued was valued at prices ranging from $0.105 to $0.14 per share,
based on the closing market prices on the date the board of directors authorized
the issuances. Subsequent to September 30, 2009, the Company issued an aggregate
of 125,000 shares of common stock for previously entered into
agreements.
 
 The above
securities were issued pursuant to an exemption under Section 4(2) of the
Securities Act of 1933.
 
 Item
3. Defaults Upon Senior Securities
 
 None.
  Item
4. Submission of Matters to a Vote of Security Holders
 
 None.
 
 Item
5. Other Information
 
 None.
 
 Item
6. Exhibits
 
  Exhibit 31.1
              Certification
      of the Chief Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley
      Act of 2002Exhibit 31.2
              Certification
      of the Chief Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley
      Act of 2002
 
 Exhibit 32.1
              Certification
      of the Chief Executive Officer pursuant to U.S.C. Section 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002Exhibit 32.1
              Certification
      of the Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002
 
 31
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
  SANSWIRE
      CORP.Dated:
      November 16, 2009
                By:
                /s/ David
      A. ChristianDavid
      A. Christian, Chief Executive Officer  and
                  Chairman
      of theBoard
      ofDirectors
                  (Principal
      Executive Officer)
  SANSWIRE
      CORP.By:
                /s/ Thomas
      SeifertThomas
      Seifert, Chief Financial Officer
                  (Principal
      Accounting and Financial Officer)
  32