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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED December 31, 2004
                       Securities and Exchange Commission
                                   File Number
                                    000-26369


                         Reality Wireless Networks, Inc.
             (Exact name of registrant as specified in its charter)

                  Nevada                                      88-0422026
     (State or other jurisdiction of                        (I.R.S. Employer
      incorporation or organization)                     Identification Number)

                        4906 Point Fosdick Dr., Suite 102
                          Gig Harbor, Washington 98335
          (Address of principal executive offices, including zip code)

                                 (253) 853-3632
              (Registrant's Telephone Number, Including Area Code)


      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
requirements for the past 90 days.

                                  YES  X        NO  ___

The number of issued and outstanding shares of the Registrants Common Stock,
$0.001 par value, as of February 04, 2005, was 437,497,636 issued and 95,170,702
outstanding


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<PAGE>

                         Reality Wireless Networks, Inc.


                                                                            Page

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Consolidated Balance Sheet at December 31, 2004 (Unaudited)
         Consolidated Statements of Operations for the three months ended
         December 31, 2004 and 2003 (Unaudited) Consolidated Statements of Cash
         Flows for the three months December 31, 2004 and 2003 (Unaudited) Notes
         to Consolidated Financial Statements (Unaudited)

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

Item 3.  Controls and Procedures

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

Item 2.  Changes in Securities.

Item 3.  Defaults Upon Senior Securities.

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K.

Signatures


                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements-


                                       3
<PAGE>

                         REALITY WIRELESS NETWORKS, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                December 31,
                                                                                   2004
                                                                                (unaudited)
                                                                                ------------
<S>                                                                             <C>
ASSETS

           Current assets:
             Cash                                                               $          0
                                                                                ------------
               Total current assets                                                        0

           Debt Issuance Cost, net                                                     5,635
           Investment in non-marketable securities                                    32,063
                                                                                ------------
                                                                                $     37,698
                                                                                ============

                                 LIABILITIES AND STOCKHOLDERS' DEFICIT

           Current liabilities:
             Accounts payable                                                   $    304,087
             Accounts payable, related party                                          73,611
             Accrued payroll                                                         190,196
             Accrued payroll taxes                                                   241,573
             Accrued interest                                                        261,515
             Accrued expenses                                                         18,633
             Current portion of notes                                              1,238,974
                                                                                ------------
               Total current liabilities                                           2,328,589
                                                                                ------------

           Convertible Debentures, net of discount                                    27,412

                                                                                ------------
               Total liabilities                                                   2,356,001

           Stockholders' deficit:

             Preferred stock, $.001 par value, 100,000,000 shares authorized:
               none issued and outstanding Series A Preferred stock, $.001
               par value, 5,000,000 authorized: 51,020 issued and outstand51g
             Common stock, $.001 par value, 500,000,000 shares authorized:
               437,497,636 shares issued an95,17170,702 outstanding Common
               stock issuable (1 share) - Additional paid in capital
                                                                                  14,144,991
             Subscription Receivable Promissory Note and Interest (101,509)
             Deferred Expense (1,601,459) Accumulated deficit (14,855,548)
                                                                                ------------
               Total stockholders' deficit                                        (2,318,303)
                                                                                ------------
                                                                                $     37,698
                                                                                ============
</TABLE>


See accompanying summary of accounting policies and notes to financials

<PAGE>

                         REALITY WIRELESS NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Three months ended
                                                  ------------------
                                              December 31,    December 31,
                                                  2004            2003
                                              ------------    ------------
<S>                                           <C>             <C>
Revenue                                       $         --    $     23,830
Cost of sales                                           --          22,205
                                              ------------    ------------

Gross margin                                            --           1,625

Engineering and development                             --             787
General and administrative                          50,617       2,040,469
Consulting                                         349,060         577,087
Legal                                              599,738         442,620

                                              ------------    ------------
Operating Expenses                                 999,415       3,060,963
                                              ------------    ------------

Loss from operations                              (999,415)     (3,059,338)

Other income (expense):
Gain (loss) on disposition of assets                    --           3,989
Interest income                                        504              --
Interest expense                                   (31,544)        (25,446)
                                              ------------    ------------
                                                   (31,040)        (21,457)
                                              ------------    ------------

                                              ------------    ------------
Net loss                                      $ (1,030,455)   $ (3,080,795)
                                              ============    ============

Basic and diluted net loss per common share   $      (2.93)   $      (3.58)
                                              ============    ============

Weighted Average Shares                            351,164         859,719
                                              ============    ============
</TABLE>

See accompanying summary of accounting policies and notes to financials

<PAGE>

                         REALITY WIRELESS NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Three months ended December 31,
                                                                   -------------------------------
                                                                       2004                 2003
                                                                    ------------    ------------
<S>                                                                   <C>             <C>
Cash flows from operating activities:
       Net loss                                                       (1,030,455)     (3,080,795)
         Adjustments to reconcile net income to net cash
               used in operating activities:
         Depreciation and amortization                                        --             787
         Beneficial conversion and debt issue cost amortization            1,517              --
         Common stock issued for services                              1,055,750       3,118,920
         Settlement of accounts payable included in legal expense             --
         Interest income on subscription receivable                         (504)
         Company expense paid by other than Company                        1,088          19,225
     Changes in operating assets and liabilities
         Prepaids and other current assets                                    --              --
         Accounts payable                                                  4,410        (120,850)
         Accounts payable, related party                                 (65,262)             --
         Accrued compensation, officer                                        --              --
         Accrued interest                                                 25,622          25,446
         Accrued payroll and payroll taxes                                 7,834              --
                                                                    ------------    ------------
                 Net cash used in operating activities                        --         (37,267)
                                                                    ------------    ------------

     Cash flows from investing activities:
         Investment purchase                                                  --        (147,500)
                                                                    ------------    ------------
                 Net cash used in investing activities                        --        (147,500)
                                                                    ------------    ------------

     Cash flows from financing activities:
         Stock issued for cash

         Proceeds from convertible debenture, net                             --         200,000
         Proceeds from notes payable                                          --              --
         Contributed capital                                                  --
         Principal payments notes payable and capital leases             (17,200)
                                                                    ------------    ------------
                 Net cash provided by financing activities                    --         182,800
                                                                    ------------    ------------

     Net increase in cash and cash equivalents                                --          (1,967)
     Cash and cash equivalents at beginning of period                         --           2,148
                                                                    ------------    ------------
     Cash and cash equivalents at end of period                               --             181
                                                                    ============    ============

         Cash paid for:
           Interest                                                           --              --
           Taxes                                                              --              --
         Schedule of non cash investing and financing activites:
</TABLE>

     See accompanying summary of accounting policies and notes to financials

<PAGE>

                            REALITY WIRELESS NETWORKS
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1:Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited interim financial statements of Reality Wireless
Networks, Inc. ("Reality") have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission ("SEC"), and should be read in
conjunction with the audited financial statements and notes thereto contained in
the Company's Annual Report filed with the SEC on Form 10-KSB for the year ended
September 30, 2004. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for fiscal year end September 30,
2004 as reported in the 10-KSB have been omitted.

Note 2 - Going Concern

The financial statements have been prepared assuming that Reality will continue
as a going concern. Reality has a significant accumulated deficit and working
capital deficiency at December 31, 2004, is not active, is in default on various
loans and notes payable and is unable to meet its obligations as they come due,
all of which raise substantial doubt about Reality's ability to continue as a
going concern. The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts or to the
amounts and classification of liabilities that might be necessary should Reality
be unable to continue as a going concern.

The continued support of Reality's creditors, lenders and shareholders is
required in order for Reality to continue as a going concern. Management's plans
to support Reality's operations include borrowing additional funds, raising
additional capital and seeking a merger candidate. (See Note 3 for merger
agreement). Reality's inability to obtain additional capital or obtain such
capital on favorable terms could have a material adverse effect on its financial
position, results of operations and its ability to continue operations.

Note 3 -Commitments

In the last quarter of 2004, the Company announced that the non-binding letter
of intent to merge entered into August 2003 with IElement was terminated. The
Board of Directors of both Reality Wireless and IElement approved the
termination, without cause, of the non-binding letter of intent to merge. As a
result of the termination of the agreement, both companies will bear their own
expenses in connection with the merger and neither company will owe to the other
either break-up fees or other costs and expenses.

On November 10, 2004 the Company and Genesis Electronics, Inc. ("Genesis")
entered into an agreement to merge Genesis with and into Reality Wireless
Networks and to rename the Company Genesis Electronics, Inc. (the "reverse
merger"). The agreement provides that all of the shares of common stock of
Genesis issued and outstanding at the time the merger becomes effective under
applicable state law (the "Effective Time") will be converted into common stock
of Registrant such that the current holder of Genesis common stock will hold 97%
of all shares of Registrant's common stock outstanding immediately after the
closing of this merger transaction. The obligation of Genesis to close is
conditioned on, among other things, the satisfactory completion of due diligence
review and the reduction of Registrant's liabilities to $50,000 or less. The
agreement may be terminated at any time prior to the Effective Time by written
agreement; by Genesis for breach of any of the representations and warranties or
covenants of Registrant if such breach is not cured within thirty days of
written notice; by Registrant for breach of any Genesis representations and
warranties or covenants if such breach is not cured within thirty days of
written notice.


                                       4
<PAGE>

Note 4 - Accounts Payable - related party

Approximately $150,000 was applied during the three months ended December 31,
2004, against outstanding accounts payable balance with a related party legal
services vendor. The payment was applied through stock issued to vendor and,
upon liquidation of stock, vendor applied sale proceeds against outstanding
balance.

Note 5 - Debt

Convertible Debentures



Convertible debentures at December 31, 2004 were as follows:


            Convertible debenture        $     43,526
                                         ------------
            Less: Debt discount               (16,114)
                                         ------------
            Convertible debenture, net   $     27,412
                                         ============

Amortization of debt discount and of debt issue costs for the three months ended
December 31, 2004 were $1,124 and $393, respectively. The remaining debenture
balance of $43,526 was converted in January 2005. (see note 7)

Note 5 -Common Stock

On November 16, 2004 3,350,000 shares of common stock were issued for consulting
services, of which 850,000 shares will be cancelled due to termination of
consulting agreement. The value of the 2,500,000 shares on that date for
services was at $.07/share or $175,000, of which $29,167 was expensed for year
to date for consulting services. The remaining $145,833 is deferred on the
balance sheet as a contra-equity. These shares are registered pursuant to the
Company's Registration Statement on Form S-8.

On November 19, 2004, 25,000,000 shares of common stock were issued for
consulting services, employment agreements and legal work. The value of the
stock, based on the quoted trading price on date of grant which was $.05-$.08,
was $1,400,000 in total of which $500,000 was expensed for legal work and
$176,666 was expensed for consulting and employment services. The remaining
$723,334 is on the balance sheet as a contra-equity deferred expense and will be
expensed over the life of the various consulting agreements. These shares are
registered pursuant to the Company's Registration Statement on Form S-8.

On December 10, 2004, 25,500,000 shares of common stock were issued for
consulting services and legal work. The value of the stock on that date for
these shares was between $.007 and $.0012 per share or $186,000 of which $70,000
was expensed for legal work and $9,667 was expensed to date for consulting
services. The remaining $106,333 is deferred on the balance sheet as a
contra-equity. These shares are registered pursuant to the Company's
Registration Statement on Form S-8.

On December 17, 2004, 37,500,000 shares of common stock were issued for
consulting services and legal work. The value of the stock on that date for
these shares was $.007 per share or $262,500 of which $105,000 was expensed for
legal work and $13,125 was expensed to date for consulting services. The
remaining $144,375 is deferred on the balance sheet as a contra-equity. These
shares are registered pursuant to the Company's Registration Statement on Form
S-8.

During the quarter ended December 31, 2004, amortization of deferred fees that
existed at September 30, 2004 was $152,125 with $482,917 remaining deferred at
December 31, 2004.

From October 1, 2003 through December 31, 2004, 343,610,000 shares have been
issued to escrow for convertible debenture discussed in Note 5. Of the


                                       5
<PAGE>

343,610,000 shares, 1,283,065 have been converted and 342,326,935 remain in
escrow account to be issued upon conversion at a later date, and are not
included in earnings per share, as discussed in Note 5.

Note 6 - Subscription Receivable Promissory Note

On August 23, 2004 the Company signed a promissory note with Nelana Holdings,
Ltd., for $100,000. The maker promised to pay $10,000 to the Company by October
15, 2004 and $7,500, plus any accrued interest, by the 5th of each month
thereafter, in exchange for 51,020 newly issued Series A Convertible Preferred
Stock. To date no payments have been received by the Company. The promissory
note is valid consideration for stock at Company's option in the state of
Nevada. Technically, the note receivable is in default pursuant to terms of
promissory note, but to date, the Company has not asserted right to file default
notice. Accrued interest income was $504 for the three months ended December 31,
2004.

Note 7 - Subsequent Events

On January 20, 2005, the entire remaining $43,525 convertible debenture was
converted into 14,609,631 common shares in three transactions. $5,635 of
deferred issuance cost and the $16,114 of debt discount recorded will be
expensed in the second quarter. Convertible debenture is described in more
detail in Note 5 "Convertible Debentures."



Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

Forward-looking Statements

Certain statements in this Quarterly Report on Form 10-QSB, as well as
statements made by Reality Wireless Networks, Inc. ("Reality" or "the Company")
in periodic press releases, oral statements made by the company's officials to
analysts and shareholders in the course of presentations about the company,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
the actual results, performance or achievements of the company to be materially
different from any future results, performance or achievements expressed or
implied by the forward looking statements. Such factors include, among other
things, (1) general economic and business conditions; (2) interest rate changes;
(3) the relative stability of the debt and equity markets; (4) competition; (5)
demographic changes; (6) government regulations; (7) required accounting
changes; and (8) other factors over which Reality has little or no control.

GENERAL OVERVIEW

Reality was incorporated in the state of Nevada on March 17, 1999. On March 5,
2002 the Company entered into an asset purchase agreement with Reality Networks,
Inc. a Delaware corporation.

Until September 2004, the Company was a service provider of fixed, wireless,
high-speed, broadband Internet access to principally residential homes and small
businesses. The Company provided this service as an alternative to digital
subscriber line ("DSL") or cable Internet access service. The Company provided
its service primarily in geographical areas of northern California where DSL and
cable services are not available.

On February 1, 2004 the Company and IElement (privately held national
communications service provider) began exchanging services among their clients
and began to provide their joint venture services to current and new business
and household customers. Besides leveraging infrastructure assets, Reality
Wireless began to leverage IElement's management and billing resources. IElement
is a subsidiary of Integrated Communications Consulants Internet ("ICCI") with
whom Reality Wireless entered into a non-binding letter of intent to merge
announced the beginning of August 2003. ICCI and IElement are used throughout
10QSB interchangeably; ICCI is the parent company with whom the LOI is signed
and the promissory note referred to in the LOI (see Note 13 to the September 30,
2004 financials) is executed with IElement. By mutual consent of both the
Company and IElement, the LOI has been terminated.


                                       6
<PAGE>

In September 2004, the Company changed its strategy due to poor operating
conditions and operating results coupled with difficulties in raising capital
through debt and equity sources. The Company adopted a new strategy during the
fiscal fourth quarter of 2004 that committed to the shutting down of its current
business and to seek a merger or acquisition transaction with a Company having
better financial resources. As of September 2004, the Company ceased providing
services to customers and has disposed of most of its assets. The Company has
entered a new development phase, while formulating a plan to improve its
financial position.


On November 10, 2004 the Company and Genesis Electronics, Inc. ("Genesis"),
entered into an agreement to merge Genesis with and into Reality Wireless
Networks and to rename the Company Genesis Electronics, Inc., (the "reverse
merger"). The agreement provides that all of the shares of common stock of
Genesis issued and outstanding at the time the merger becomes effective under
applicable state law (the "Effective Time"), will be converted into common stock
of Registrant such that the current holder of Genesis common stock will hold 97%
of all shares of Registrant's common stock outstanding immediately after the
closing of this merger transaction. The obligation of Genesis to close is
conditioned on, among other things, the satisfactory completion of due diligence
review and the reduction of Registrant's liabilities to $50,000 or less. The
agreement may be terminated at any time prior to the Effective Time by written
agreement; by Genesis for breach of any of the representations and warranties or
covenants of the Company if such breach is not cured within thirty days of
written notice; by the Company for breach of any Genesis representations and
warranties or covenants if such breach is not cured within thirty days of
written notice.


RESULTS OF OPERATIONS

Retail sales for the three months ended December 31, 2004 and 2003 were $0 and
$23,830, respectively. Effective August 31, 2004, the Company no longer provides
services to customers, and therefore, no revenue has been collected since this
date.

The Company's cost of sales for the three months ended December 31, 2004 and
2003 were $0 and $22,205, respectively. No cost of sales were incurred due to
cessation of services provided to customers.

Gross margin for the three months ended December 31, 2004 and 2003 was $0 and
$1,625, respectively. Until the merger with Genesis is closed, gross margin will
be $0, as there are currently no cost of sales on related inactivity of services
provided to customers.

Engineering and development costs for the three months ended December 31, 2004
and 2003 were $0 and $787, respectively. 2004 costs were exclusively
depreciation of node head end and bandwidth software. All assets were
written-off as abandoned as of September 1, 2004, and therefore, no depreciation
was incurred in first quarter of 2005.

Operating expenses for the three months ended December 31, 2004 and 2003 were
$999,415 and $3,060,176, respectively. 90,500,000 shares valued at $2,023,500,
fair market value on grant date of $.007-$.08/share, were issued in the three
months ended December 31, 2004 of which as of December 31, 2004, $903,625 has
been expensed. The total amount expensed on deferred contracts in the first
quarter of 2005 was $1,055,750 on remaining balance of $2,657,209, leaving
$1,601,459 to be expensed over life of contracts and is recorded on balance
sheet as a contra-equity. Legal expenses was reduced by $150,000 in the quarter
ended December 31, 2004, due to sale of stock issued to vendor. At the time of
issuance, legal expenses were increased for the value of stock issued, then, at
time of stock sale, legal expenses were decreased and payment applied against
outstanding account payable balance. The prior year consulting and legal
expenses recorded on issuance of stock totaled $3,118,920, less $160,000 applied
on sale of some stock against legal invoices.

Interest expense for the three months ended December 31, 2004 and 2003 was
$31,544 and $25,446, respectively. Current year expense included $4,797 accrual
for interest on outstanding payroll taxes. The remaining $25,623 was accrual of
interest on outstanding notes payable and amortization of debt discount. For the
three months ended December 31, 2003 the entire amount was accrued interest on
outstanding notes payable.


                                       7
<PAGE>

Net loss for the three months ended December 31, 2004 and 2003 was $1,030,455
and $3,080,795, respectively.

Liquidity and Capital Resources

At December 31, 2004, the Company had negative working capital of $2.4 million.
$1.24 million of this is attributable to bridge financing short-term notes, of
which the Company hopes the majority will convert into equity upon funding.

Net cash used in investing activities was $0 and $147,500 for the three months
ended December 31, 2004 and 2003, respectively. The $147,500 represents a note
receivable and deposit from IElement, a privately held corporation, in
conjunction with potential merge, that has been subsequently terminated and in
August 2004 shares related to this deposit were converted into 71,154 shares of
I-Element, who later merged with a publicly held company, Mailkey.

Net cash provided by financing activities was $0 and $182,800 for the nine
months ended December 31, 2004 and 2003, respectively. The Company has been
funding business operations through bridge financing. Management is actively
pursuing significant funding to allow for execution of business plan. The
Company hopes the majority of bridge loans will convert to equity at time of
funding.

Critical Accounting Policies

Impairment

The Company records impairment losses on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount.

Beneficial Conversion Feature in Convertible Debentures and Convertible
Preferred Stock

In accordance with EITF Issue 98-5, as amended by EITF 00-27, we must evaluate
the potential effect of any beneficial conversion terms related to convertible
instruments such as convertible debt or convertible preferred stock. The Company
has issued convertible debentures and convertible preferred stock. A beneficial
conversion may exist if the holder, upon conversion, may receive instruments
that exceed the value of the convertible instrument. Valuation of the benefit is
determined based upon various factors including the valuation of equity
instruments, such as warrants, that may have been issued with the convertible
instruments, conversion terms, value of the instruments to which the convertible
instrument is convertible, etc. Accordingly, the ultimate value of the
beneficial feature is considered an estimate due to the partially subjective
nature of valuation techniques.

Accounting for Stock-Based Compensation

The Company accounts for stock options and warrants issued to employees in
accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
issued to Employees. For financial statement disclosure purposes and issuance of
options and warrants to non-employees for services rendered, the Company follows
statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation.

The company did not issue any options during the three months ended December 31,
2004 or 2003 and as of December 31, 2004 there were no options outstanding.


                                       8
<PAGE>

Factors That May Affect Future Results

Competition: The broadband internet access industry is highly competitive and
requires constant investment in research and development expenditures in order
to keep pace with technology and competitors' products. The success of the
Company depends upon its ability to go into markets and establish a base level
of customers that will cover costs of opening and maintaining a market. If the
Company is unable to compete effectively or acquire additional financing to fund
future research and development and deployment expenditures, it would have a
materially adverse effect on the company's business operations and the Company
would not be unable to continue marketing and developing products

Dependence Upon External Financing: The Company has been building its business
through revenues generated from operations supplemented by the sale of its
common stock. The ability of the Company to continue its growth and expand its
business is dependent upon the ability of the Company to raise additional
financing either through the issuance of additional stock or the incurrence of
debt.

Item 3. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer/Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

At the end of the period covered by this Quarterly Report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer/Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief \Financial Officer concluded that
the Company's disclosure controls and procedures were effective to ensure that
all material information required to be filed in this Quarterly Report has been
made known to them in a timely fashion.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

On July 16, 2004 counsel to Reality received Notices of Hearing and Amended
Complaints from the State of California, Department of Industrial Relations,
Division of Labor Standards Enforcement, for State Case Number 12-54273 JM, in
which, Mr. Arnaud Guerrand ("Mr. Guerrand") claims that Reality owes (1) unpaid
wages in the amount of $1,240, (2) unpaid reimbursable business expenses of
$950.00, and (3) additional wages accrued as a penalty of up to $155.00 per day
for "an indeterminate number of days not to exceed thirty days." Reality
subsequently failed to reach a settlement and, at hearing on July 16, 2004,
judgment was entered against Reality in an amount that has not yet been
disclosed but is expected to be approximately $6,840.00.

On October 13, 2004, Lyn Rowbotham-Ameche, note holder of the Company, filed a
complaint in the Superior Court of the State of California, Los Angeles County,
alleging that the Company breached its contract under a promissory note. The
Company has entered into settlements negotiations and anticipates an imminent
settlement.

On January 13, 2005, Brent M. Haines, note holder of the Company, filed a
complaint in the Superior Court of the State of Washington, Kings County,
alleging that the Company breached its contract under a promissory note. The
Company plans to contest the claim and is preparing to file an answer to Mr.
Haine's complaint.


                                       9
<PAGE>

Item 2. Changes in Securities.

On September 22, 2004, the Company sold 5,102,041 shares of newly designated
Series A Convertible Preferred Stock to one purchaser in a transaction exempt
from registration under section 4 (2) of the Securities Act. On October 4, 2004,
the Company reverse-split the Company's issued and outstanding common stock,
options, warrants, and any other securities convertible, bringing the total of
outstanding preferred shares from 5,102,041 to 51,020 shares.

On October 1, 2003, the Company entered into agreements with HEM Mutual
Assurance, LLC to secure certain financing for the Company: (i) Agreement and
Plan of Merger, (ii) Convertible Debenture Purchase Agreement, and (iii) 1%
Convertible Debentures in the aggregate amount of Nine Hundred Ninety Four
Thousand Dollars ($994,000). The Company chose to amend the Agreements to
provide for the issuance of an additional 600,000 shares (adjusted as per
October 4, 2004 reverse stock split), thereby increasing the number of shares
from 600,00 to 1,200,000 (adjusted as per October 4, 2004 reverse stock split),
to HEM Mutual Assurance, LLC and to secure additional financing for the Company
(the "Amendments"). Copies of the Amendments are made exhibits to the 10-QSB
filed May 24, 2004. These securities were issued on May 6, 2004, pursuant to the
exemption provided by section 3(a)(9) of the Securities Act of 1933. On December
2, 2004, the Company issued an additional 340,000,000 shares to HEM Mutual
Assurance, LLC to provide for the conversion of the outstanding Convertible
Debentures as provided in the Convertible Debenture Agreement.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Submission of Matters to a Vote of Security Holders.

On September 1, 2004, the Board submitted to shareholders holding in excess of
50% of voting capital stock a proposal for a reverse stock split on a 100:1
basis. Reality received consent in excess of 50% of voting capital stock, as
detailed in the Information Statement filed September 14, 2004 on Schedule 14C
and the reverse split became effective October 4, 2004

Item 5. Other Information.

The following actions were taken by the Board of Directors of the Company (the
"Board") during the period ended December 31, 2004. Where agreements are
referenced, such agreements are incorporated herein by reference.

On November 10, 2004, the Board ratified a prior consulting agreement with Kevin
Evans and authorized issuance of 2,500,000 shares common stock of the Company on
Form S-8 to Kevin Evans.

On November 15, 2004, the Board entered into new consulting agreements with
Michael Park and Steve Careaga, ratified a prior amendment to a consulting
agreement with Terry Byrne, and ratified an existing engagement agreement with
The Otto Law Group, PLLC, for legal services rendered to the company, and
authorized issuance of 4,000,000 shares, 1,000,000 shares, 10,000,000 shares and
10,000,000 shares of common stock the Company of Form S-8 to Michael Park, Steve
Careaga, Terry Byrne, and David M. Otto of The Otto Law Group, respectively.

In a resolution dated December 2, 2004, the Board authorized the Company to
issue additional 340,000,000 shares to HEM Mutual Assurance, LLC to provide for
the conversion of the outstanding Convertible Debentures as provided in the
Convertible Debenture Agreement between the Company and HEM Mutual Assurance,
LLC.

On December 5, 2004, the Board entered into new consulting agreements with
Bradford Van Siclen, Sean Patton and Fabiola Campbell, ratified prior amendments
to exisitng consulting agreement with Terry Byrne and Michael Park, and ratified
an existing engagement agreement with The Otto Law Group, PLLC, for legal
services rendered to the company, and authorized issuance of 5,000,000 shares,
1,000,000 shares, 500,000 shares, 5,000,000 shares, 4,000,000 shares and
10,000,000 of common stock the Company of Form S-8 to Bradford Van Siclen, Sean
Patton, Fabiola Campbell, Terry Byrne, Michael Park, and David M. Otto of The
Otto Law Group, respectively.


                                       10
<PAGE>

On December 16, 2004, the Board ratified a prior amendments to existing
consulting agreements with Terry Byrne, Kevin Evans, and Bradford Van Siclen and
ratified an existing engagement agreement with The Otto Law Group, PLLC, for
legal services rendered to the company, and authorized issuance of 7,500,000
shares, 7,500,000 shares, 7,500,000 shares and 15,000,000 shares of common stock
the Company of Form S-8 to Terry Byrne, Kevin Evans, Bradford Van Siclen, and
David M. Otto of The Otto Law Group, PLLC, respectively.


                                       11
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K.

(a) Exhibits.

-------------------------------------------------------------------------------
Exhibit
Number         Title of Document                   Location of Document
-------------------------------------------------------------------------------
3              Articles of Incorporation           Incorporated by reference
                                                   to the 10-SB Filed on June
                                                   15, 1999
-------------------------------------------------------------------------------
3.1            Bylaws                              Incorporated by reference
                                                   to the 10-SB Filed on June
                                                   15, 1999
-------------------------------------------------------------------------------
3.2            Certificate of Amendment to         Incorporated by reference
               Articles of Incorporation           to the 10-KSB Filed on
                                                   April 15, 2002
-------------------------------------------------------------------------------
3.3            Certificate of Amendment to         Incorporated by reference
               Articles of Incorporation           to the 8-K Filed on May 3,
                                                   2002
-------------------------------------------------------------------------------
3.4            Certificate of Amendment to         Incorporated by reference
               Articles of Incorporation           to the 10-QSB filed on
                                                   August 25,2003
-------------------------------------------------------------------------------
4.1            Engagement Agreement with The       Incorporated by reference
               Otto Law Group, PLLC                to the S8 filed December 1,
                                                   2003
-------------------------------------------------------------------------------
4.2            Amendment No. 3 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed November
               Kevin Evans and Reality             12, 2004
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.3            Amendment No. 7 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed November
               Bartholomew International           18, 2004
               Investments, LLC and Reality
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.4            Consulting Services Agreement       Incorporated by reference
               between Michael Park and            to the S8 filed November
               Reality Wireless Networks, Inc.     18, 2004
-------------------------------------------------------------------------------
4.5            Consulting Services Agreement       Incorporated by reference
               between Michael Park and            to the S8 filed November
               Reality Wireless Networks, Inc.     18, 2004
-------------------------------------------------------------------------------
4.6            Consulting Services Agreement       Incorporated by reference
               between Sean Patton and Reality     to the S8 filed December 2,
               Wireless Networks, Inc.             2004
-------------------------------------------------------------------------------
4.7            Consulting Services Agreement       Incorporated by reference
               between Fabiola Campbell and        to the S8 filed December 2,
               Reality Wireless Networks, Inc.     2004
-------------------------------------------------------------------------------
4.8            Amendment No. 8 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed December
               Bartholomew International           10, 2004
               Investments and Reality
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.9            Amendment No. 1 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed December
               Michael Park and Reality            10, 2004
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.10           Consulting Services Agreement       Incorporated by reference
               between Bradford Van Siclen and     to the S8 filed December
               Reality Wireless Networks, Inc.     10, 2004
-------------------------------------------------------------------------------


                                       12
<PAGE>

-------------------------------------------------------------------------------
4.11           Amendment No. 9 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed December
               Bartholomew International           17, 2004
               Investments and Reality
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.12           Amendment No. 4 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed December
               Kevin Evans and Reality             17, 2004
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
4.13           Amendment No. 1 to Consulting       Incorporated by reference
               Services Agreement between          to the S8 filed December
               Bradford Van Siclenand Reality      17, 2004
               Wireless Networks, Inc.
-------------------------------------------------------------------------------
31.1           Certification by Principal          Attached
               Executive Officer
-------------------------------------------------------------------------------
31.2           Certification by Principal          Attached
               Financial Officer
-------------------------------------------------------------------------------
32             Certification Pursuant to 906       Attached
-------------------------------------------------------------------------------


                                       13
<PAGE>

(b) Reports on Form 8-K.

During the period ended December 31, 2004, the Company filed the following
reports on Form 8-K:

-----------------------------------------------------
Date of Event Reported            Items Reported
-----------------------------------------------------
11/12/04                          Items 1, 3, and 9
-----------------------------------------------------


                                   SIGNATURES

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

                           REALITY WIRELESS NETWORKS, INC.

Dated:  March 2, 2005      /s/ Steve Careaga
                           ----------------------
                           By: Steve Careaga
                           Its:  Chief Executive Officer, Principal Financial
                           Officer/Acting Chief Financial Officer, Director


                                       14