| | Form 10-QSB | 
| | ----------- | 

|
|

| | SECURITIES AND EXCHANGE COMMISSION Washington, D.C. | 
| | --------------------------------------------------- | 

|
|

| | [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2004 | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------- | 

|OR
|--

| | [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______ to _______. | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------- | 

|
|

| | Commission File No. 33-19961 | 
| | ---------------------------- | 

|
|

| | AirRover Wi-Fi Corp.                                              | 
| | ----------------------------------------------------------------- | 
| | (Exact Name of Small Business Issuer as Specified in its Charter) | 

| | DELAWARE |  | 01-0623010 | 
| | -------- |  | ---------- | 

| | (State or Other Jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number) | 
| | -------------------------------------------------------------- |  | --------------------------------------- | 

| | 5555 Hilton Avenue, Suite 207, Baton Rouge, Louisiana 70808 | 
| | ----------------------------------------------------------- | 

| | (Address of Principal Executive Offices, including Zip Code) | 
| | ------------------------------------------------------------ | 

| | (225) 923-1034 | 
| | -------------- | 

| | (Issuers telephone number, including area code) | 
| | ------------------------------------------------ | 

|
|

|Indicate by check mark whether 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 Registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [ X ] No [ ]
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date:
|----------------------------------------------------------------------------------------------------------------------------

| | Class |  | Outstanding as of 11-19-04 | 
| | ----- |  | -------------------------- | 

| | Common Stock, $.001 par value |  | 95,522,946 | 
| | ----------------------------- |  | ---------- | 

|PART I - FINANCIAL INFORMATION
|------------------------------

|
|

|Item 1. Financial Statements. | 
|----------------------------- | 

|
|

|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|------------------------------------------
|AirRover Wi-Fi Corp. and Subsidiaries     

| |  | Page
| |  | ----

| | Balance Sheet as of September 30, 2004 (unaudited) | 3
| | -------------------------------------------------- | -

| | Statement of Revenues and Expenses for the Three Months and Nine Months Ended September 30, 2004, and for the Period from June 17, 2003 (Inception), Through September 30, 2004 (unaudited) | 4
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -

| | Statement of Cash Flows for the Nine Months Ended September 30, 2004, and for the Period from June 17, 2003 (Inception), Through September 30, 2004 (unaudited) | 5
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | -

| | Notes to Financial Statements | 7
| | ----------------------------- | -

| | AIRROVER WI-FI CORP. AND SUBSIDIARIES | 
| | ------------------------------------- | 

| | (Formerly Air-Q Wi-Fi Corporation and formerly Covenant Financial Corporation) (A DEVELOPMENT STAGE COMPANY) | 
| | ------------------------------------------------------------------------------------------------------------ | 

| | BALANCE SHEET September 30, 2004 (Unaudited) | 
| | -------------------------------------------- | 

|ASSETS
|------

|Current assets: |  | 
|--------------- |  | 

| | Cash | $15,536 | 
| | ---- | ------- | 

| | Total Current Assets | 15,536 | 
| | -------------------- | ------ | 

|Equipment, net of accumulated depreciation | 83,315 | 
|------------------------------------------ | ------ | 

|Intangibles: |  | 
|------------ |  | 

| | Acquired customer base, net of accumulated amortization of $5,000 | 95,000 | 
| | ----------------------------------------------------------------- | ------ | 

| | Goodwill, net of accumulated amortization of $14,055 | 266,951 | 
| | ---------------------------------------------------- | ------- | 

| | Total Assets | $460,802 | 
| | ------------ | -------- | 

|LIABILITIES AND STOCKHOLDERS' EQUITY
|------------------------------------

|Current Liabilities: |  | 
|-------------------- |  | 

| | Accounts payable | $4,736 | 
| | ---------------- | ------ | 

| | Notes payable | 54,488 | 
| | ------------- | ------ | 

| | Total current liabilities | 59,224 | 
| | ------------------------- | ------ | 

|Stockholders equity: |  | 
|--------------------- |  | 

| | Preferred stock, $.001 par value, 50,000,000 shares authorized, 500,000 Series A shares issued and outstanding | 500 | 
| | -------------------------------------------------------------------------------------------------------------- | --- | 

| | Common stock, $.001 par value; 200,000,000 shares authorized, 85,904,740 shares issued and outstanding | 85,905 | 
| | ------------------------------------------------------------------------------------------------------ | ------ | 

| | Additional paid-in capital | 4,908,659 | 
| | -------------------------- | --------- | 

| | Deficit accumulated during the development stage | (4,593,486) | 
| | ------------------------------------------------ | ----------- | 

| | Total Stockholders' Equity | 401,578 | 
| | -------------------------- | ------- | 

|Total Liabilities and Stockholders Equity | $460,802 | 
|------------------------------------------ | -------- | 

|
|

|The accompanying notes are an integral part of these statements.
|----------------------------------------------------------------

|
|

| | AIRROVER WI-FI CORP. AND SUBSIDIARIES | 
| | ------------------------------------- | 

| | (Formerly Air-Q Wi-Fi Corporation and formerly Covenant Financial Corporation) (A DEVELOPMENT STAGE COMPANY) | 
| | ------------------------------------------------------------------------------------------------------------ | 

|
|

| | STATEMENT OF REVENUE AND EXPENSES Three Months and Nine Months Ended September 30, 2004, and Period from June 17, 2003 (Inception), through September 30, 2004 (Unaudited) | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | Three Months Ended September 30, 2004 |  | Nine Months Ended September 30, 2004 |  | Inception through September 30, 2004
| | ------------------------------------- |  | ------------------------------------ |  | ------------------------------------

|Revenues | $4,371 |  | $5,996 |  | $5,996
|-------- | ------ |  | ------ |  | ------

|General and administrative | 253,760 |  | 2,024,609 |  | 4,434,040
|-------------------------- | ------- |  | --------- |  | ---------

|Net loss | (249,389) |  | (2,018,613) |  | (4,428,044)
|-------- | --------- |  | ----------- |  | -----------

|Deemed dividend on preferred stock | 0 |  | (165,442) |  | (165,442)
|---------------------------------- | - |  | --------- |  | ---------

|Net loss available to common stockholders | $(249,389) |  | $(2,184,055) |  | $(4,593,486)
|----------------------------------------- | ---------- |  | ------------ |  | ------------

|Net loss per share: |  |  | 
|------------------- |  |  | 

| | Basic and diluted | $(0.003) |  | $(0.026) |  | 
| | ----------------- | -------- |  | -------- |  | 

| |  | 
| |  | 

|Weighted number shares outstanding: |  |  | 
|----------------------------------- |  |  | 

| | Basic and diluted | 84,791,253 |  | 84,506,517 |  | 
| | ----------------- | ---------- |  | ---------- |  | 

|
|

|The accompanying notes are an integral part of these statements.
|----------------------------------------------------------------

|
|

| | AIRROVER WI-FI CORP. AND SUBSIDIARIES | 
| | ------------------------------------- | 

| | (Formerly Air-Q Wi-Fi Corporation and formerly Covenant Financial Corporation) (A DEVELOPMENT STAGE COMPANY) | 
| | ------------------------------------------------------------------------------------------------------------ | 

| | STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2004, and Period from June 17, 2003 (Inception), through September 30, 2004 (Unaudited) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------- | 

| | Nine Months Ended September 30, 2004 |  | Inception through September 30, 2004
| | ------------------------------------ |  | ------------------------------------

|CASH FLOWS FROM OPERATING ACTIVITIES: |  |  | 
|------------------------------------- |  |  | 

|Net loss | $(2,184,055) |  | $(4,593,486)
|-------- | ------------ |  | ------------

| | Adjustments to reconcile net loss to cash used in operating activities: |  |  | 
| | ----------------------------------------------------------------------- |  |  | 

| | Depreciation and amortization | 32,756 |  | 36,984
| | ----------------------------- | ------ |  | ------

| | Stock issued for services | 1,547,059 |  | 3,571,885
| | ------------------------- | --------- |  | ---------

| | Changes in assets and liabilities: |  |  | 
| | ---------------------------------- |  |  | 

| | Accounts payable | 5,987 |  | 12,693
| | ---------------- | ----- |  | ------

|CASH FLOWS USED IN OPERATING ACTIVITIES | (598,253) |  | (971,924)
|--------------------------------------- | --------- |  | ---------

|
|

|CASH FLOWS FROM INVESTING ACTIVITIES: |  |  | 
|------------------------------------- |  |  | 

| | Purchase of equipment | (62,956) |  | (95,576)
| | --------------------- | -------- |  | --------

|
|

|CASH FLOWS FROM FINANCING ACTIVITIES: |  |  | 
|------------------------------------- |  |  | 

| | Issuance of note payable | 0 |  | 55,000
| | ------------------------ | - |  | ------

| | Payment of note payable | (512) |  | (512)
| | ----------------------- | ----- |  | -----

| | Issuance of preferred shares | 209,558 |  | 209,558
| | ---------------------------- | ------- |  | -------

| | Issuance of warrants | 290,442 |  | 290,442
| | -------------------- | ------- |  | -------

| | Issuance of options | (11,452) |  | (11,452)
| | ------------------- | -------- |  | --------

| | Sale of common stock, net | 90,000 |  | 540,000
| | ------------------------- | ------ |  | -------

|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 578,036 |  | 1,083,036
|------------------------------------------- | ------- |  | ---------

|
|

|NET INCREASE (DECREASE) IN CASH | (83,173) |  | 15,536
|------------------------------- | -------- |  | ------

|Cash, beginning of period | 98,709 |  | 0
|------------------------- | ------ |  | -

|Cash, end of period | $15,536 |  | $15,536
|------------------- | ------- |  | -------

|
|

|Supplemental information:
|-------------------------

| | Income taxes paid | $0 |  | $0
| | ----------------- | -- |  | --

| | Interest paid | $0 |  | $0
| | ------------- | -- |  | --

|
|

|Non-cash Financial Activities:
|------------------------------

| | Liabilities assumed in merger | $0 |  | $8,922
| | ----------------------------- | -- |  | ------

| | Stock issued in acquisition | $381,100 |  | $381,100
| | --------------------------- | -------- |  | --------

|
|

|The accompanying notes are an integral part of these statements.
|----------------------------------------------------------------

| | AIRROVER WI-FI CORP. AND SUBSIDIARIES | 
| | ------------------------------------- | 

| | (Formerly Air-Q Wi-Fi Corporation and formerly Covenant Financial Corporation) (A DEVELOPMENT STAGE COMPANY) | 
| | ------------------------------------------------------------------------------------------------------------ | 

|
|

| | NOTES TO FINANCIAL STATEMENTS September 30, 2004 (Unaudited) | 
| | ------------------------------------------------------------ | 

|
|

|Note 1. Basis of Presentation | 
|----------------------------- | 

|The accompanying unaudited interim financial statements of AirRover Wi-Fi Corp. (formerly Air-Q Wi-Fi Corporation) (AirRover), formerly Covenant Financial Corporation (Covenant), 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 audited financial statements filed with the SEC on Form 8-K/A and Form 10-KSB. 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 2003 as reported in the 10-KSB have been omitted.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recent Accounting Pronouncements | 
| | -------------------------------- | 

| | The Company accounts for its stock-based compensation plans under Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees. Statement of Financial Accounting Standard ("FAS") No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, issued in December 2002 requires pro forma net income (loss) and pro forma net income (loss) per share to be disclosed in interim financial statements. For the period ended June 30, 2004, AirRovers pro form net loss and net loss per share are equal to the net loss and net loss per share reported herein.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 2. Common Stock | 
|-------------------- | 

|During the nine months ended September 30, 2004, AirRover issued 753,870 shares of common stock for services. The services were valued using the market price on the date issued, resulting in $1,547,060 in compensation expense.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In May 2004, AirRover issued 206,000 shares of common stock in connection with the acquisition of AirRover Networks, Inc. As of June 30, 2004, AirRover had not taken control of the acquired entity, and the amount for shares outstanding are treated as a deposit on the acquisition.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 3. Preferred Stock | 
|----------------------- | 

|AirRover is authorized to issue 50,000,000 shares of preferred stock, $.001 par value. On March 2, 2004, AirRover issued 500,000 shares of a newly created Series A convertible preferred stock (the preferred stock), and issued 250,000 warrants to purchase 250,000 shares of our common stock at an exercise price of $3.50 per share and 250,000 warrants to purchase 250,000 shares of our common stock at an exercise price of $4.50 per share for cash proceeds totaling $500,000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The shares of Series A preferred stock are convertible at any time into 100,000 shares of AirRover common stock. The shares of common stock underlying the Series A preferred stock and the warrants possesses certain demand registration rights.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The warrants issued to the holders of the Preferred Stock were assigned a value of $290,442, which decreased the carrying value of the Preferred Stock. The warrants were valued using the Black-Scholes method with the following assumptions: a risk-free interest rate of 3.5%, and expiration date of March 1, 2007, a volatility factor of 53% and a dividend yield of 0%. In connection with the issuance of the Preferred stock and warrants, AirRover recorded $165,442 related to the beneficial conversion feature on the Preferred Stock as a deemed dividend, which will be reflected in the income or loss applicable to common stockholders in the calculation of basic and diluted net loss per share. A beneficial conversion feature is present because the effective conversion price of the Preferred Stock was less that the fair value of the common stock on the commitment date.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 4. Commitments and Contingencies | 
|------------------------------------- | 

|On April 23, 2004, AirRover reached an agreement with an investor group to restructure 20,000,000 of its outstanding warrants. Under the agreement, warrants to purchase 20,000,000 shares, with an average exercise price of $.35 per share, were cancelled and new warrants to purchase 5,000,000 shares at an average exercise price of $1.00 per share were issued. The 5,000,000 warrants will expire on April 22, 2008.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 5. Declaration of Dividend | 
|------------------------------- | 

|One June 21, 2004, AirRovers board of directors declared a dividend of units of its securities. Each unit of securities is comprised of one share of common stock and one warrant with an exercise price of $2.00 per share. Each shareholder of record on the record date, June 30, 2004, is entitled to receive one unit for each 10 shares of AirRover common stock owned.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The physical delivery of the dividend securities will not occur until a registration statement under the Securities Act of 1933, as amended, covering the dividend transaction has been declared effective by the SEC.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 6. Stock Split | 
|------------------- | 

|In August 2004, AirRovers board of directors approved a 4-for-1 forward split of our common stock, which forward split was approved by a majority of our shareholders, acting by written consent in lieu of a meeting. The record date for the forward split of AirRovers common stock was September 7, 2004.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 7. Subsequent Events | 
|------------------------- | 

| | Shares for Services | 
| | ------------------- | 

| | In October 2004, AirRover issued a total of 5,042,856 shares of common stock to its officers and directors, as a bonus for their services in such capacities, due to AirRovers lack of cash with which to pay such persons. In addition, AirRover issued 2,500,000 shares of its common stock in payment of legal services. All such shares were valued at $.08 per share, the closing price of AirRovers common stock on October 20, 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Memorandum of Understanding re: Acquisition | 
| | ------------------------------------------- | 

| | In November 2004, AirRover entered into memorandum of understanding to acquire Diamondi Technologies, Inc. (DTI), a privately-held California-based computer software developer. DTI has developed a hand-held Wi-Fi-based gaming system for on-premises use by casinos. The parties are currently engaged in their respective due diligence activities. The acquisition of DTI is expected to be made solely with shares of AirRovers common stock. AirRovers management is not aware of any impediment to its reaching a final agreement with DTI and anticipates that a definitive agreement will be signed in the near future.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|FORWARD-LOOKING STATEMENTS
|--------------------------

|This report by AirRover Wi-Fi Corp. contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words "expect", "project", "estimate", "believe", "anticipate", "intend", "plan", "forecast" and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. Some, but not all, of the important risks that could cause actual results to differ materially from those suggested by the forward-looking statements include, among other things:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Events that deprive us of the services of our president and largest shareholder, David Loflin;
|- | ----------------------------------------------------------------------------------------------

|- | Whether or not we can successfully introduce our Wi-Fi Internet access services in our chosen markets;
|- | ------------------------------------------------------------------------------------------------------

|- | Whether we are able to obtain adequate capital with which to pursue our full business plan; and
|- | -----------------------------------------------------------------------------------------------

|- | Other uncertainties, all of which are difficult to predict and many of which are beyond our control.
|- | ----------------------------------------------------------------------------------------------------

|We do not intend to update forward-looking statements.
|------------------------------------------------------

|
|

|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations. | 
|---------------------------------------------------------------------------------------------- | 

|Background. | 
|----------- | 

|On June 20, 2003, there occurred a change in control of AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation, formerly Covenant Financial Corporation. Pursuant to a stock purchase agreement, FMF Investments, Ltd., a Texas limited partnership, purchased 611,000 shares, or 54.59%, of our outstanding common stock from Eric Anderson. FMF Investments paid Mr. Anderson a total of $70,000 in cash, which funds were obtained by FMF Investments through its other business activities and not as a loan.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Following FMF Investments acquiring control, our then-directors resigned and FMF Investments, acting by written consent in lieu of a meeting of a majority of shareholders, elected David Loflin and Waddell D. Loflin as our directors.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Also, on June 20, 2003, pursuant to a stock purchase agreement, we acquired all of the outstanding capital stock of Air-Q Corp., a Nevada corporation (Air-Q NV), by issuing a total of 11,000,000 shares, or approximately 95% of the then-outstanding shares, of our common stock to the shareholders of Air-Q NV. Our board of directors did not employ any standard valuation formula or any other standard measure of value.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For accounting purposes, the reverse-merger will be treated as an acquisition of Covenant Financial Corporation (now AirRover Wi-Fi Corp.) and a recapitalization of Air-Q Corp. (now a subsidiary of AirRover Wi-Fi Corp.).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Sales of Equity. | 
|---------------- | 

| | 2004 | 
| | ---- | 

| | In March 2004, we entered into a securities purchase agreement. Under this agreement, we issued securities for cash in the amount of $500,000, as follows: 500,000 shares of our Series A preferred stock, convertible into 100,000 shares of our common stock after September 2, 2004, 250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $3.50 per share and 250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $4.50 per share. These warrants expire March 1, 2007.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2003 | 
| | ---- | 

| | In June 2003, we entered into four separate securities purchase agreements. Under each agreement, we issued securities for cash in the amount of $125,000, as follows: 1,250,000 shares of our common stock, 1,250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $.20 per share, 1,250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $.30 per share, 1,250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $.40 per share and 1,250,000 common stock purchase warrants to purchase a like number of shares at an exercise price of $.50 per share.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Critical Accounting Policies. | 
|----------------------------- | 

|There were no material changes to our critical accounting policies during the period ended September 30, 2004.
|--------------------------------------------------------------------------------------------------------------

|Management's Discussion and Analysis discusses the results of operations and financial condition as reflected in our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to accounts receivable, inventory valuation, amortization and recoverability of long-lived assets, including goodwill, litigation accruals and revenue recognition. Management bases its estimates and judgments on our historical experience and other relevant factors, 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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|While we believe that the historical experience and other factors considered provide a meaningful basis for the accounting policies applied in the preparation of our consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. If such estimates and assumptions prove to be inaccurate, we may be required to make adjustments to these estimates in future periods.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Results of Operations. | 
|---------------------- | 

|During the nine months ended September 30, 2004, we generated a total of $5,996 (unaudited) in revenues from our business operations, $4,371 (unaudited) of which was generated during the three months ended September 30, 2004. We currently lack the capital necessary to pursue our full-scale business plan, and we may never possess enough capital with which to do so. In this circumstance, it is likely that we would never earn a profit.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Due to our severe lack of capital, during the nine months ended September 30, 2004, we issued shares of our common stock to consultants in payment of their services. The fair value of the shares issued to consultants is $1,547,060 (unaudited) and is included in our statement of revenue and expenses. Issuing shares of our common stock was the only means by which we could obtain the consultants' services. The full value of the consulting services received by us under each agreement has been expensed.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|It is likely that we will incur consulting expenses during the remainder 2004, though we do not expect these expenses to be at the same level as in prior periods. The consultants may be paid in cash, shares of our common stock or a combination thereof, in the determination of our board of directors.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Subsequent to September 30, 2004, we issued a total of 5,042,856 shares of common stock to our officers and directors, as a bonus for their services in such capacities, due to AirRovers lack of cash with which to pay such persons. In addition, AirRover issued 2,500,000 shares of its common stock in payment of legal services. All such shares were valued at $.08 per share, the closing price of AirRovers common stock on October 20, 2004. AirRovers operating results for the fourth quarter of 2004 will reflect a charge of approximately $600,000 as a result of these issuances.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Liquidity and Capital Resources. | 
|-------------------------------- | 

|Since our inception, we have lacked adequate capital with which to accomplish our business objectives. Currently, we are moderately liquid; we believe that we possess enough cash, through the result of recent securities sales, to pursue more aggressively our strategies for expanding our footprint as quickly as possible. Now, in addition to internally generated growth, we are seeking individuals and companies to become Wi-Fi development partners. To date, we have entered into Wi-Fi development agreements with three entities. Our growth in Arizona and California is attributable to the efforts of our development partner there.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Until we obtain funds through the exercise of our outstanding warrants, or otherwise, we will not aggressively pursue additional development partners. Our management has made this determination because of its desire not to over-commit our resources. Our managements philosophy is to make capital and related commitments only to the extent our available capital permits. Our managements philosophy may, in the future, prove to have been flawed, to the extreme detriment to our business and, ultimately, our shareholders.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We have entered into a non-binding memorandum of understanding with respect to the acquisition of Diamond I Technologies, Inc. Currently, we do not possess adequate capital with which to permit Diamond I to pursue its full plan of development. We cannot assure you that we will acquire Diamond I or, if acquired, that we will be able to obtain adequate funding for Diamond Is use.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our Capital Needs. | 
| | ------------------ | 

| | Our current level of operations can be maintained for the next six months, as we have received approximately $1,000,000 from sales of securities during 2003 and 2004. To begin the aggressive pursuit of our business objectives, we will require an additional approximately $1 million.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Currently, we do not possess enough capital to pursue aggressively our business objectives.
| | -------------------------------------------------------------------------------------------

|Management's Plans Relating to Future Liquidity. | 
|------------------------------------------------ | 

|We possess adequate capital to sustain our current level of operations for the next twelve months.
|--------------------------------------------------------------------------------------------------

|In March 2004, we obtained $500,000 from the sale of units of our securities to a private investor. The proceeds from this sale of securities will be used to purchase needed Wi-Fi equipment, for marketing and for working capital. These funds are sufficient permit us to continue our current level of operations for at least twelve months.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We have a note payable totaling $55,000 at December 31, 2003. The proceeds from this note were used for working capital. This note, including accrued interest, will be repaid out of proceeds derived from the exercise of our outstanding warrants.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our best opportunity for obtaining funds needed to pursue aggressively our business objectives is through the exercise of the 9,500,000 outstanding warrants, which, if exercised, would provide a total of approximately $8,000,000. There is no assurance that these warrants will be exercised. We do not currently possess another potential source of capital on a similar scale.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Capital Expenditures. | 
|--------------------- | 

|For the nine months ended September 30, 2004, we made only small expenditures for needed equipment. We currently have limited capital with which to make any significant capital expenditures. Should we obtain significant funding, of which there is no assurance, we would be able to make significant expenditures on equipment. The amount of these equipment purchases cannot be predicted due to the uncertainty of funding levels and timing. However, without additional capital, we will make no capital expenditures.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Item 3. Controls and Procedures. | 
|-------------------------------- | 

|Our Chief Executive Officer and Acting Chief Financial Officer has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 240.13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and has concluded that such disclosure controls and procedures are effective in timely alerting him and other members of management to material information about our company required to be disclosed by us in our periodic reports that we file or submit under the Securities Exchange Act of 1934.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|There have not been any significant changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|PART II - OTHER INFORMATION
|---------------------------

|Item 1. Legal Proceedings. | 
|-------------------------- | 

|We are not currently involved in any legal proceeding.
|------------------------------------------------------

|
|

|Item 2. Changes in Securities. | 
|------------------------------ | 

|During the three months ended September 30, 2004, we did not issue any restricted securities.
|---------------------------------------------------------------------------------------------

|Subsequent to September 30, 2004, we have issued restricted securities, as follows:
|-----------------------------------------------------------------------------------

|1. | (a) | Securities Sold. In October 2004, a total of 7,542,856 shares of Company Common Stock were issued.                                                                                                                                                                                                                                                            
|-- | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (b) | Underwriter or Other Purchasers. Such shares of Common Stock were issued to David Loflin (2,857,142 shares), Waddell D. Loflin (1,785,714 shares), Gregory A. Bonner (200,000 shares), Ira R. Witkin (200,000 shares) and Newlan & Newlan, Attorneys at Law (2,500,000 shares).                                                                               
|   | (c) | Consideration. Such shares of Common Stock were issued either as a bonus or for services rendered and were valued, in the aggregate, at $603,428.                                                                                                                                                                                                             
|   | (d) | Exemption from Registration Claimed. These securities are exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not involving a public offering. This purchaser was a sophisticated investor capable of evaluating an investment in the Company.

|
|

|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 and Reports on Form 8-K. | 
|----------------------------------------- | 

|(a) Exhibits. | 
|------------- | 

| | Exhibit No. |  | Description | 
| | ----------- |  | ----------- | 

| | 31.1 |  | Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(b) | 
| | ---- |  | ------------------------------------------------------------------------------------- | 

| | 31.2 |  | Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(b) | 
| | ---- |  | ------------------------------------------------------------------------------------- | 

| | 32.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 | 
| | ---- |  | --------------------------------------------------------------------------- | 

| | 32.2 |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 | 
| | ---- |  | --------------------------------------------------------------------------- | 

|(b) Reports on Form 8-K. | 
|------------------------ | 

| | During the three months ended September 30, 2004, we filed Current Reports on Form 8-K or Form 8-K/A, as follows:
| | -----------------------------------------------------------------------------------------------------------------

|- | Date of Event: May 21, 2004, wherein we amended a previously filed report, to include the required financial statements of AirRover Networks, Inc.; this Current Report on Form 8-K/A is incorporated herein by this reference.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Date of Event: August 20, 2004, wherein we reported a change in our independent auditor; this Current Report on Form 8- K is incorporated herein by this reference.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Date of Event: August 24, 2004, wherein we reported the forward split of our common stock; this Current Report on Form 8- K is incorporated herein by this reference.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Since September 30, 2004, we have not filed a Current Report on Form 8-K.
| | -------------------------------------------------------------------------

|
|

|SIGNATURES
|----------

|In accordance with the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | Date: November 22, 2004 | AIRROVER WI-FI CORP.
| | ----------------------- | --------------------

|
|

| |  | By: | /s/ DAVID LOFLIN | 
| |  | --- | ---------------- | 

| | David Loflin | 
| | ------------ | 

| | President and Acting Chief Financial Officer [Principal Accounting Officer] | 
| | --------------------------------------------------------------------------- |