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

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x ~~X ]~~ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of ~~1934For the quarterly period ended April 30, 2011~~1934

~~[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~ For the ~~transition~~quarterly period ~~from~~ended ~~__________~~July to31, ~~__________~~2011

¨	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 000-53799

NEXAIRA WIRELESS INC.~~(Exact~~ ~~name of registrant as specified in its charter)~~

Nevada	20-8748507
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

(Exact name of registrant as specified in its charter)

1404 510 West Hastings Street
Nevada		20-8748507
Vancouver, B.C. Canada	V6B 1L8
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(Address of principal executive offices)	(Postal Code)
1404 510 West Hastings Street Vancouver, B.C. Canada		V6B 1L8
(Address of principal executive offices)		(Postal Code)

Registrant’s telephone number, including area code (604) 682-5629

(Former name, former address and former fiscal year, if changed since last report) N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

~~Yes~~Indicate [by Xcheck ]mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ~~[ ]~~ ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ ] (Not applicable)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [¨ ] Accelerated filer [¨ ] Non-accelerated filer [¨ ~~] Smaller reporting company [ X ]~~ (Do not check if a smaller reporting company) Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

Yes [ ] No [ X ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer'’s classes of common stock, as of the latest practicable date: 7880,~~350~~727,~~217~~569 common shares issued and outstanding as of ~~June 14~~September 20, 2011.

INDEX

		~~Page~~	Page
PART I.	~~FINANCIAL INFORMATION~~	FINANCIAL INFORMATION
ITEM 1.	~~Financial Statements~~	3Financial Statements		3
	Condensed Consolidated Balance Sheets as at April 30, 2011 (unaudited) with comparative figures as at October 31, 2010 (audited)	4
		Condensed Consolidated Balance Sheets as at July 31, 2011 (unaudited) with comparative figures as at October 31, 2010 (audited)		4
	Condensed Consolidated Statement of Operations (unaudited) for the three months ended April 30, 2011 and 2010 and the six months ended April 30, 2011 and 2010	5
		Condensed Consolidated Statement of Operations (unaudited) for the three months ended July 31, 2011 and 2010 and the nine months ended July 31, 2011 and 2010		5
	Condensed Consolidated Statement of Cash Flows (unaudited) for the six months ended April 30, 2011 and 2010	6
		Condensed Consolidated Statement of Cash Flows (unaudited) for the nine months ended July 31, 2011 and 2010		6
	Condensed Consolidated Statement of Shareholders’ Deficit and Other Comprehensive Loss for the year ended October 31, 2010 (audited) and the six months ended April 30, 2011 (unaudited)	7
		Condensed Consolidated Statement of Shareholders’ Deficit and Other Comprehensive Loss for the year ended October 31, 2010 (audited) and the nine months ended July 31, 2011 (unaudited)		7
	~~Notes to the Condensed Consolidated Financial Statements.~~	8Notes to the Condensed Consolidated Financial Statements.		8
ITEM 2.	~~Management’s Discussion and Analysis or Plan of Operation~~	18Management’s Discussion and Analysis or Plan of Operation		19
ITEM 3.	~~Quantitative and Qualitative Disclosures About Market Risk~~	36Quantitative and Qualitative Disclosures About Market Risk		38
ITEM 4T.	Controls and Procedures	36
ITEM 4.		Controls and Procedures		38
PART II.	~~OTHER INFORMATION~~	38OTHER INFORMATION		40
ITEM 1.	~~Legal Proceedings~~	38Legal Proceedings		40
ITEM 1A.	~~Risk Factors~~	38Risk Factors		40
ITEM 2.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	45Unregistered Sales of Equity Securities and Use of Proceeds		47
ITEM 3.	~~Defaults Upon Senior Securities~~	45Defaults Upon Senior Securities		47
ITEM 4.	~~Removed and Reserved~~	45Removed and Reserved		47
ITEM 5.	~~Other Information~~	45Other Information		47
ITEM 6.	~~Exhibits~~	46Exhibits		48
	~~SIGNATURES~~	SIGNATURES

PART I - —FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

While the information presented in the accompanying interim condensed consolidated financial statements for the quarter ended ~~April 30~~July 31, 2011 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period. These interim condensed consolidated financial statements follow the same accounting policies and methods of their application as our October 31, 2010 annual audited condensed consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim condensed financial statements be read in conjunction with our October 31, 2010 annual audited consolidated financial statements.

NEXAIRA WIRELESS INC. AND SUBSIDIARIES ~~Condensed Consolidated Balance Sheets~~

		April 30,
		2011			October 31,
		(unaudited)			2010
ASSETS
Current assets:
Cash and cash equivalents	$	31,182		$	107,727
Accounts receivable, net		160,296			200,416
Inventories, net		144,336			162,525
Prepaids and other current assets		104,558			94,406
Total current assets		440,372			565,074
Property and equipment, net		168,174			205,599
Other assets:
Software development costs, net		837,230			917,417
Patents and trademarks, net		89,428			100,616
Total other assets		926,658			1,018,033
TOTAL ASSETS	$	1,535,204		$	1,788,706
Current liabilities:
Short-term promissory notes payable	$	990,396		$	950,000
Note payable to vendor, net		-			576,449
Accounts payable		640,339			729,854
Accrued payroll and related liabilities		176,984			453,625
Convertible note payable, net		354,591			281,319
Derivative liabilities		285,245			154,615
Promissory notes payable to related parties		412,000			412,000
Interest payable		258,707			195,796
Note payable to bank		43,201			56,666
Accrued board of directors fees		91,000			73,000
Deferred consulting fees		952,255			562,769
Accrued expenses and other current liabilities		298,947			280,564
Total current liabilities		4,503,664			4,726,657
Commitments and contingencies
Shareholders’ deficit:
Preferred stock, $0.001 par value:
Authorized shares – 100,000,000
Issued and outstanding – Nil		-			-
Common stock, $0.001 par value:
Authorized shares — 600,000,000
Issued and outstanding – 78,350,217and 59,811,116, respectively		78,350			59,811
Additional paid-in capital		7,506,025			5,622,753
Accumulated deficit		(10,337,841	)		(8,488,905	)
Other comprehensive loss:
Foreign exchange translation		(214,994	)		(131,610	)
TOTAL SHAREHOLDERS’ DEFICIT		(2,968,460	)		(2,937,951	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	1,535,204		$	1,788,706

Condensed Consolidated Balance Sheets

See Accompanying Notes to Consolidated Financial Statements


	July 31, 2011 (unaudited)			October 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	13,369		$	107,727
Accounts receivable, net		315,829			200,416
Inventories, net		139,694			162,525
Prepaid financing costs		1,020,950			—
Prepaids and other current assets		93,427			94,406

Total current assets		1,583,269			565,074

Property and equipment, net		136,609			205,599
Other assets:
Software development costs, net		790,381			917,417
Patents and trademarks, net		83,272			100,616

Total other assets		873,653			1,018,033

TOTAL ASSETS	$	2,593,531		$	1,788,706

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Short-term promissory notes payable	$	988,871		$	950,000
Note payable to vendor, net		—			576,449
Accounts payable		731,745			729,854
Accrued payroll and related liabilities		187,010			453,625
Convertible notes payable, net		722,718			281,319
Derivative liabilities		1,753,062			154,615
Debt discount		(175,000	)		—
Promissory notes payable to related parties		412,000			412,000
Interest payable		324,102			195,796
Note payable to bank		34,225			56,666
Accrued board of directors fees		67,000			73,000
Deferred consulting and management fees		1,090,584			562,769
Accrued expenses and other current liabilities		448,035			280,564

Total current liabilities		6,584,352			4,726,657

Commitments and contingencies
Shareholders’ deficit:
Preferred stock, $0.001 par value:
Authorized shares – 100,000,000
Issued and outstanding – Nil		—			—
Common stock, $0.001 par value:
Authorized shares – 600,000,000
Issued and outstanding – 80,350,217 and 59,811,116, respectively		80,350			59,811
Additional paid-in capital		7,679,269			5,622,753
Accumulated deficit		(11,482,923	)		(8,488,905	)
Other comprehensive loss:
Foreign exchange translation		(267,518	)		(131,610	)

TOTAL SHAREHOLDERS’ DEFICIT		(3,990,821	)		(2,937,951	)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	2,593,531		$	1,788,706

4See Accompanying Notes to Consolidated Financial Statements

~~NEXAIRA~~4 ~~WIRELESS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited)~~

		Three Months Ended						Six Months Ended
		April 30,						April 30,
		2011			2010			2011			2010
Revenues	$	247,558		$	525,053		$	539,058		$	1,031,391
Cost of product revenues		159,781			464,777			318,752			835,872
Amortization expense		55,267			41,245			109,904			57,743
Total cost of revenues		215,048			506,022			428,656			893,615
Gross profit		32,510			19,031			110,402			137,776
Operating expenses:
Research and development		139,608			193,157			291,864			421,876
Selling, general and administrative		744,892			953,622			1,598,109			1,882,933
Total operating expenses		884,499			1,146,779			1,889,972			2,304,809
Loss from operations		(851,989	)		(1,127,748	)		(1,779,570	)		(2,167,033	)
Other (expense) income:
Gain on settlement of note payable and accounts payable		-			-			253,570			-
Interest income		35,979			1,140			35,979			1,140
Interest and other expense		(111,809	)		(37,894	)		(358,115	)		(140,559	)
Total other (expense) income		(75,830	)		(36,754	)		(68,566	)		(139,419	)
Loss from operations before income taxes		(927,819	)		(1,164,502	)		(1,848,136	)		(2,306,452	)
Income tax provision		-			-			800			800
Net Loss	$	(927,819	)	$	(1,164,502	)	$	(1,848,936	)	$	(2,307,252	)
Per share data:
Weighted average shares outstanding used in computation of basic and diluted net loss per share:
Basic and diluted		75,627,533			58,400,638			70,022,605			56,261,417
Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.04	)

NEXAIRA WIRELESS INC. AND SUBSIDIARIES

~~See Accompanying Notes to~~ Condensed Consolidated ~~Financial~~ Statements of Operations

5(Unaudited)

NEXAIRA WIRELESS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
Revenues	$	408,768		$	270,305		$	947,826		$	1,301,696

Cost of product revenues		182,841			119,535			501,593			971,905
Amortization expense		46,849			33,387			156,753			74,632

Total cost of revenues		229,690			152,921			658,346			1,046,536

Gross profit		179,078			117,384			289,480			255,160
Operating expenses:
Research and development		145,236			285,707			437,100			707,583
Selling, general and administrative		867,020			863,513			2,465,128			2,746,446

Total operating expenses		1,012,256			1,149,220			2,902,228			3,454,446

Loss from operations		(833,178	)		(1,031,836	)		(2,612,748	)		(3,198,869	)

Other (expense) income:
Gain on settlement of note payable and accounts payable		—			—			253,569			—
Interest income		—			1,163			35,981			2,303
Interest, amortization of debt fees and other expense		(311,905	)		(39,424	)		(670,020	)		(179,983	)

Total other (expense) income		(311,905	)		(38,261	)		(380,470	)		(177,680	)

Loss from operations before income taxes		(1,145,083	)		(1,070,097	)		(2,993,218	)		(3,376,549	)

Income tax provision		—			1,145			800			1,945

Net Loss	$	(1,145,083	)	$	(1,071,242	)	$	(2,994,018	)	$	(3,378,494	)

Per share data:
Weighted average shares outstanding used in computation of basic and diluted net loss per share:
Basic and diluted		78,545,869			59,528,328			72,863,693			57,343,062

Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.06	)

		Six Months Ended
		April 30,
		2011			2010
Cash flows from operating activities:
Net loss	$	(1,848,936	)	$	(2,307,252	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		192,075			110,429
Loss on disposal of fixed assets		-			650
Provision for bad debts		1,054			-
Provision for inventory obsolescence		-			46,051
Warranty reserve		2,064			13,331
Stock-based compensation expense		189,434			65,542
Gain on settlement of note payable to vendor and disputed accounts payable		(210,182	)		-
Gain on derivative liabilities		(33,178	)		-
Accretion of discount on debt		185,733			19,173
Issuance of common stock warrants in connection with extension of convertible debt		27,763			-
Changes in operating assets and liabilities:
Accounts receivable		39,066			128,779
Inventories		18,189			472,450
Prepaids and other current assets		(10,152	)		55,281
Accounts payable		(89,515	)		115,059
Accrued expenses and other current liabilities		267,641			306,108
Net cash used in operating activities		(1,268,944	)		(974,399	)
Cash flows from investing activities:
Purchases of property and equipment		(29,557	)		(65,727	)
Software development costs		(27,020	)		(3,350	)
Patents and trademarks		(2,250	)		(15,887	)
Net cash used in investing activities		(58,827	)		(84,964	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,085,000			1,100,000
Net proceeds from convertible debenture		263,075			-
Proceeds from promissory note payable to related party		-			174,000
Repayment of note payable to vendor		-			(260,354	)
Proceeds from short-term note payable		-			300,000
Repayment of note payable to bank		(7,317	)		(10,968	)
Advances from shareholder		(6,148	)		9,743
Net cash provided by financing activities		1,334,610			1,312,421
Effect of exchange rate changes on cash		(83,384	)		(26,859	)
Net increase (decrease) in cash and cash equivalents		(76,545	)		226,199
Cash and cash equivalents at beginning of period		107,727			260,067
Cash and cash equivalents at end of period	$	31,182		$	486,266

See Accompanying Notes to Condensed Consolidated Financial Statements

~~See~~5 ~~Accompanying Notes to Condensed Consolidated Financial Statements~~

6NEXAIRA WIRELESS INC. AND SUBSIDIARIES

~~NEXAIRA WIRELESS INC. AND SUBSIDIARIES~~ Condensed Consolidated Statements of ~~Changes~~Cash inFlows ~~Shareholders’ Deficit and Other Comprehensive Loss For the Year Ended October 31, 2010 and the Six Months Ended April 30, 2011 (Unaudited)~~

								Accumulated
						Additional		Other
	Common					Paid-in		Comprehensive			Accumulated						Comprehensive
		Stock		Amount		Capital		Loss			Deficit			Total			Loss
BALANCE OCTOBER 31, 2009		36,329,262	$	36,329	$	1,504,289	$	(75,264	)	$	(3,824,143	)	$	(2,358,789	)
Conversion of convertible debentures into common stock		19,950,000		19,950		1,930,050								1,950,000
Conversion of promissory notes payable to related party into common stock		423,674		424		211,413								211,837
Conversion of promissory notes payables to third parties into common stock		580,849		581		289,844								290,425
Issuance of common stock in connection with private placements		2,025,000		2,025		1,297,975								1,300,000
Issuance of common stock in connection with consulting agreements		183,330		183		79,817								80,000
Issuance of common stock in connection with settlement of accounts payable		94,001		94		21,391								21,485
Issuance of warrants in connection with convertible note payable						49,458								49,458
Purchase price adjustment in connection with Share Exchange Agreement with Technology Publishing, Inc.						41,801								41,801
Exercise of stock options		225,000		225		33,525								33,750
Stock-based compensation						163,190								163,190
Net loss											(4,664,762	)		(4,664,762	)	$	(4,664,762	)
Foreign exchange translation								(56,346	)					(56,346	)		(56,346	)
Total comprehensive loss																$	(4,721,108	)
BALANCE OCTOBER 31, 2010		59,811,116		59,811		5,622,753		(131,610	)		(8,488,905	)		(2,937,951	)
Issuance of common stock in connection with private placements		10,850,000		10,850		910,342								921,192
Issuance of common stock in connection with settlement of note payable to vendor		3,857,406		3,858		381,884								385,742
Issuance of warrants for replacement of options previously issued in connection with the amended convertible debenture						81,615								81,615
Issuance of common stock in connection with consulting agreements		900,000		900		89,100								90,000
Issuance of common stock in connection with conversion of debt		2,931,695		2,931		293,134								296,065
Issuance of warrants in connection with extension of note payable maturity date						27,763								27,673
Stock-based compensation						99,434								99,434
Net loss											(1,848,936	)		(1,848,936	)	$	(1,848,936	)
Foreign exchange translation								(83,384	)					(83,384	)		(83,384	)
Total comprehensive loss																$	(1,932,320	)
BALANCE APRIL 30, 2011		78,350,217	$	78,350	$	7,506,025	$	(214,994	)	$	(10,337,841	)	$	(2,968,460	)

(Unaudited)

See Accompanying Notes to Consolidated Financial Statements


	Nine Months Ended July 31,
	2011			2010
Cash flows from operating activities:
Net loss	$	(2,994,018	)	$	(3,378,494	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		291,269			169,894
Loss on disposal of fixed assets		—			650
Provision for bad debts		71,950			(13,000	)
Provision for inventory obsolescence		—			46,051
Warranty reserve		2,064			22,199
Stock-based compensation expense		239,107			112,921
Stock issued to consultants		—			74,000
Gain on settlement of note payable to vendor and disputed accounts payable		(210,182	)		—
Gain on derivative liabilities		(229,411	)		—
Accretion of discount on debt		201,144			19,173
Issuance of common stock warrants in connection with extension of convertible debt		27,762			—
Changes in operating assets and liabilities:
Accounts receivable		(187,362	)		17,454
Inventories		22,831			452,009
Prepaid financing costs		(1,020,950	)		—
Debt discount in connection with convertible debt		(175,000	)		—
Prepaids and other current assets		979			104,418
Accounts payable		1,890			13,897
Accrued expenses and other current liabilities		606,481			466,279

Net cash used in operating activities		(3,351,446	)		(1,892,549	)

Cash flows from investing activities:
Purchases of property and equipment		(29,545	)		(74,599	)
Software development costs		(40,530	)		(3,350	)
Patents and trademarks		(3,375	)		(14,551	)

Net cash used in investing activities		(73,450	)		(92,500	)

Cash flows from financing activities:
Proceeds from issuance of common stock		1,285,000			1,100,000
Increase in paid-in capital relating to loan commitment fees		1,589,621			—
Net proceeds from promissory note payable to third party		263,075			—
Proceeds from promissory note payable to related party		—			362,000
Repayment of promissory note from related party		—			(200,000	)
Repayment of note payable to vendor		—			(308,696	)
Proceeds from loan agreement		345,399			850,000
Repayment of note payable to bank		(8,976	)		(20,947	)
Advances from shareholder		(6,148	)		9,609

Net cash provided by financing activities		3,467,971			1,791,966

Effect of exchange rate changes on cash		(137,433	)		(13,945	)

Net decrease in cash and cash equivalents		(94,358	)		(207,028	)
Cash and cash equivalents at beginning of period		107,727			260,067

Cash and cash equivalents at end of period	$	13,369		$	53,039

7See Accompanying Notes to Condensed Consolidated Financial Statements

~~Notes~~6 ~~to Condensed Consolidated Financial Statements For the Six Months Ended April 30, 2011 and 2010 (Unaudited)~~

1NEXAIRA WIRELESS INC. ~~THE~~AND ~~COMPANY~~SUBSIDIARIES

~~Nexaira~~Condensed ~~Wireless~~Consolidated ~~Inc.~~Statements ~~(“the Company”), formerly known as Technology Publishing, Inc. (“TPI”) was incorporated in the State~~ of ~~Nevada~~Changes ~~on March 19, 2007. The Company is headquartered~~ in ~~Vancouver,~~Shareholders’ ~~British~~Deficit ~~Columbia Canada~~ and ~~its~~Other Comprehensive ~~principal~~Loss operations are located in San Diego, California. The Company develops and distributes 3G/4G wireless broadband routing solutions, as well as communications software to wireline and wireless carriers, Managed Service Providers (MSPs), Value Added Resellers (VARs) and distributors. The Company also provides customization services, marketing tools, provision and airtime activations based on individual customer needs. The Company is publicly traded on the Over-the-Counter Bulletin Board (OTCBB) under the symbol “NXWI” and can be found on the worldwide web at www.nexaira.com.

2.For ~~BASIS~~the OFYear ~~PRESENTATION~~Ended October 31, 2010 and the Nine Months Ended July 31, 2011

~~The~~(Unaudited) accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of management, contain all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position as of April 30, 2011, and the results of operations and cash flows for the six months ended April 30, 2011 and 2010. The balance sheet as of October 31, 2010 is derived from the Company’s audited financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto incorporated by reference in the Company's Annual Report on Form 10-K for the year ended October 31, 2010.

Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2010, as filed with the Securities and Exchange Commission.


	Common				Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total			Comprehensive Loss
	Stock		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total			Comprehensive Loss
BALANCE OCTOBER 31, 2009		36,329,262	$	36,329	$	1,504,289		$	(75,264	)	$	(3,824,143	)	$	(2,358,789	)

Conversion of convertible debentures into common stock		19,950,000		19,950		1,930,050									1,950,000
Conversion of promissory notes payable to related party into common stock		423,674		424		211,413									211,837
Conversion of promissory notes payables to third parties into common stock		580,849		581		289,844									290,425
Issuance of common stock in connection with private placements		2,025,000		2,025		1,297,975									1,300,000
Issuance of common stock in connection with consulting agreements		183,330		183		79,817									80,000
Issuance of common stock in connection with settlement of accounts payable		94,001		94		21,391									21,485
Issuance of warrants in connection with convertible note payable						49,458									49,458
Purchase price adjustment in connection with Share Exchange Agreement with Technology Publishing, Inc.						41,801									41,801
Exercise of stock options		225,000		225		33,525									33,750
Stock-based compensation						163,190									163,190
Net loss												(4,664,762	)		(4,664,762	)	$	(4,664,762	)
Foreign exchange translation									(56,346	)					(56,346	)		(56,346	)

Total comprehensive loss																	$	(4,721,108	)

BALANCE OCTOBER 31, 2010		59,811,116		59,811		5,622,753			(131,610	)		(8,488,905	)		(2,937,951	)

Issuance of common stock in connection with private placements		12,850,000		12,850		1,272,150									1,285,000
Issuance of common stock in connection with settlement of note payable to vendor		3,857,406		3,858		381,884									385,742
Issuance of warrants for replacement of options previously issued in connection with the amended convertible debenture						81,615									81,615
Issuance of common stock in connection with consulting agreements		900,000		900		89,100									90,000
Issuance of common stock in connection with conversion of debt		2,931,695		2,931		293,134									296,066
Issuance of warrants in connection with private placement						(163,808	)								(163,808	)
Issuance of warrants in connection with extension of note payable maturity date						27,763									27,763
Issuance of warrants in connection with loan agreement						(1,664,050	)								(1,664,050	)
Warrant derivative liability in connection with convertible note payable						1,589,621									1,589,621
Stock-based compensation						149,107									149,107
Net loss												(2,994,018	)		(2,994,018	)	$	(2,994,018	)
Foreign exchange translation									(135,908	)					(135,908	)		(135,908	)

Total comprehensive loss																	$	(3,129,926	)

BALANCE JULY 31, 2011		80,350,217	$	80,350	$	7,679,269		$	(267,518	)	$	(11,482,923	)	$	(3,990,821	)

~~The~~See ~~preparation~~Accompanying ofNotes ~~financial statements in conformity with accounting principles generally accepted in the United States of America requires management~~ to ~~make~~Consolidated ~~estimates~~Financial ~~and~~Statements assumptions that affect the reported amounts of assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates made by management include revenue recognition estimates, the valuation of deferred income tax assets, the valuation of equity instruments, allowance for doubtful accounts, inventory obsolescence, the fair value of derivative liabilities, and warrants issued in connection with debt.

~~The~~7 functional currency of the Company’s Canadian operations is the Canadian dollar. Assets and liabilities of the Company’s Canadian operations are translated into U.S. dollars at end-of-period exchange rates. Revenues and expenses are translated at average exchange rates in effect for the period. Net currency exchange gains or losses resulting from such translations are excluded from net income and are accumulated in a separate component of shareholders’ deficit as accumulated other comprehensive loss. Gains and losses resulting from foreign currency, which are not significant, are included in the consolidated statements of operations.

3.Notes ~~GOING~~to ~~CONCERN~~Condensed Consolidated Financial Statements

~~The~~For accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the ~~normal~~Nine ~~course~~Months ofEnded business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has experienced a decline in revenuesJuly 31, ~~and~~2011 ~~has negative cash flows from operations, negative working capital~~ and ~~capital~~2010 deficits, which raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion.

8(Unaudited)

~~Ongoing unfavorable economic conditions worldwide have led to a low level of liquidity in many financial markets and extreme volatility in the credit and equity markets available to the Company~~1. THE ~~The~~COMPANY Company has obtained funds from both related and unrelated parties since its inception. Management believes this funding will continue, and is actively seeking new investors. Management believes the existing shareholders and prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business. The Company has plans to raise up to $5 million by the third quarter of fiscal 2011 through equity and favorable debt financing.

IfNexaira ~~signs~~Wireless ofInc. ~~improvement in~~ (“the ~~global~~Company”), ~~economy~~formerly doknown ~~not progress~~ as ~~expected~~Technology ~~and~~Publishing, ~~the~~Inc. ~~economic~~(“TPI”) ~~slowdown~~was ~~continues~~incorporated ~~or worsens,~~ in the ~~Company’s~~State ~~business, financial condition, cash flows and results~~ of ~~operations~~Nevada ~~will~~on beMarch 19, ~~adversely affected~~2007. IfThe ~~that happens, the~~ Company’s ~~ability~~is toheadquartered ~~access~~in ~~the~~Vancouver, ~~capital~~British orColumbia ~~credit~~Canada ~~markets may worsen~~ and ~~it may not be able to obtain sufficient capital to satisfy or refinance all of~~ its ~~outstanding~~principal ~~debt~~operations ~~obligations as the obligations~~ are ~~required~~located toin beSan ~~paid~~Diego, California. IfThe ~~the~~ Company isdevelops ~~unable~~and todistributes ~~achieve projected operating results and~~3G/or4G ~~obtain~~wireless ~~the~~broadband ~~additional contemplated financing~~routing solutions, ~~management~~as ~~will~~well beas ~~required~~communications tosoftware ~~curtail growth plans and reduce development activities. The Company will be required~~ to ~~consider~~wireline ~~strategic~~ and ~~other~~wireless ~~alternatives~~carriers, ~~including,~~Managed ~~among~~Service ~~other~~Providers ~~things~~(MSPs), ~~the~~Value ~~sale~~Added ofResellers ~~assets~~(VARs) ~~to generate funds, the negotiation of revised terms of its indebtedness, additional exchanges of its existing indebtedness obligations for new securities~~ and ~~additional equity offerings~~distributors. The Company ~~has~~also ~~retained~~provides ~~financial~~customization ~~advisors~~services, tomarketing ~~assist it in considering these strategic~~tools, ~~restructuring~~provision orand airtime ~~other~~activations ~~alternatives.~~based ~~There~~on isindividual nocustomer ~~assurance that the Company will be successful in completing any of these alternatives~~needs. The Company’s ~~failure~~is topublicly ~~satisfy~~traded oron ~~refinance~~the ~~any~~Over-the-Counter ofBulletin ~~its~~Board ~~indebtedness~~(OTCBB) ~~obligations~~under asthe ~~they~~symbol ~~come~~“NXWI” ~~due, including through additional exchanges of new securities for existing indebtedness obligations or additional equity offerings, will result in a default~~ and ~~potential~~can ~~acceleration~~be offound ~~its remaining indebtedness obligations and will have a material adverse effect~~ on ~~its~~the ~~business~~worldwide ~~and~~web ~~continuance~~at ~~as a going concern~~www.nexaira.com.

42. BASIS ~~SIGNFIICANT~~OF ~~ACCOUNTING~~PRESENTATION ~~POLICIES~~

~~Revenue~~The ~~Recognition~~accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of management, contain all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position as of July 31, 2011, and the results of operations and cash flows for the nine months ended July 31, 2011 and 2010. The balance sheet as of October 31, 2010 is derived from the Company’s audited financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended October 31, 2010.

~~The~~Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and the notes thereto included in the Company’s ~~revenues~~Annual ~~comprise~~Report ofon Form 10-K for the ~~following:~~fiscal year ended October 31, 2010, as filed with the Securities and Exchange Commission.

~~distribution~~The preparation of ~~third~~financial ~~party~~statements ~~mobile~~in ~~wireless~~conformity ~~broadband,~~with ~~modules~~accounting principles generally accepted in the United States of America requires management to make estimates and ~~router~~assumptions ~~solutions~~that affect the reported amounts of assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates made by management include revenue recognition estimates, asthe ~~well~~valuation asof ~~related~~deferred ~~accessories;~~income tax assets, the valuation of equity instruments, allowance for doubtful accounts, inventory obsolescence, the fair value of derivative liabilities, and warrants issued in connection with debt.

The functional currency of the Company’s ~~proprietary~~Canadian ~~wireless~~operations ~~router~~is ~~solutions~~the ~~that~~Canadian ~~are~~dollar. ~~integrated~~Assets ~~with~~and liabilities of the Company’s ~~internally~~Canadian operations ~~developed~~are ~~software~~translated ~~that~~into isU.S. ~~essential~~dollars toat end-of-period exchange rates. Revenues and expenses are translated at average exchange rates in effect for the ~~functionality~~period. Net currency exchange gains or losses resulting from such translations are excluded from net income and are accumulated in a separate component of ~~the~~shareholders’ ~~equipment;~~deficit as accumulated other comprehensive loss. Gains and losses resulting from foreign currency, which are not significant, are included in the consolidated statements of operations.

~~customization~~3. GOING ~~services,~~CONCERN ~~marketing tools, provisioning and airtime activations based on individual customer needs.~~

The ~~Company~~accompanying ~~recognizes~~consolidated ~~revenue,~~financial ~~net~~statements ofhave ~~sales~~been ~~tax,~~prepared inon ~~accordance~~a ~~with~~going ~~ASC~~concern ~~605-10,~~basis ~~Revenue~~of ~~Recognition~~accounting, ~~when~~which ~~all~~contemplates continuity ~~four~~of ~~basic~~operations, ~~criteria~~realization ~~are~~of ~~met:~~assets 1)and ~~there~~liabilities isand ~~evidence~~commitments ~~that~~in anthe ~~arrangement~~normal ~~exists;~~course 2)of ~~delivery~~business. ~~has~~The ~~occurred;~~accompanying 3)consolidated ~~the~~financial ~~fee~~statements isdo ~~fixed~~not orreflect ~~determinable;~~any ~~and~~adjustments 4)that ~~collectability~~might isresult ~~reasonably~~if ~~assured. In addition,~~ the Company ~~does~~is ~~not~~unable ~~recognize~~to continue ~~revenue~~as ~~until~~a ~~all~~going ~~customers’ acceptance criteria have been met~~concern. The ~~criteria~~Company ~~are~~has ~~usually~~experienced ~~met~~a atdecline ~~the~~in ~~time of product shipment~~revenues, ~~except~~and ~~for~~has ~~shipments~~negative tocash ~~distributors~~flows ~~with rights of return. The portion of revenue~~ from ~~shipments~~operations, tonegative ~~distributors~~working ~~subject~~capital toand ~~rights~~capital ~~of return is deferred until the agreed upon percentage of return or cancellation privileges lapse. The Company considered ASC 985-605~~deficits, ~~Software~~which ~~Revenue~~raise ~~Recognition~~substantial ~~applied~~doubt toabout the ~~revenue recognition of the~~ Company’s ~~newly~~ability ~~developed~~to ~~products~~continue ~~sold~~as a ~~during~~going ~~the six months ended April 30, 2011 and 2010~~concern. The ~~Company~~ability ~~does~~of ~~not~~the ~~currently~~Company ~~sell~~to ~~its~~continue ~~proprietary~~as ~~router~~a ~~product~~going ~~and~~concern ~~internally developed software separately,~~ and noappropriateness ~~services~~of ~~are~~using ~~provided~~the ~~after~~going ~~the~~concern ~~product~~basis is ~~shipped.~~dependent ~~Therefore~~upon, ~~normal~~among ~~ASC~~other ~~605-10~~things, ~~revenue~~an ~~recognition~~additional ~~guidance~~cash ~~applies as noted above~~infusion.

~~Computation~~8 ~~of Income and Loss per Share~~

~~The~~Ongoing ~~Company~~unfavorable ~~computes~~economic ~~income~~conditions ~~and~~worldwide ~~loss~~have ~~per~~led ~~share~~to ina ~~accordance~~low ~~with~~level ~~ASC~~of ~~260,~~liquidity ~~Earnings~~in ~~per~~many ~~Share.~~financial markets ~~ASC~~and ~~260~~extreme ~~requires~~volatility ~~presentation~~in ofthe ~~both~~credit ~~basic~~ and ~~diluted~~equity ~~earnings~~markets ~~per~~available ~~share~~to ~~(“EPS”) on~~ the ~~face~~Company. ofThe ~~the~~Company ~~statements~~has ofobtained ~~operations.~~funds ~~Basic~~from ~~EPS~~both isrelated ~~computed~~and byunrelated ~~dividing~~parties ~~net~~since ~~income~~its ~~(loss)~~inception. ~~available~~Management tobelieves ~~common~~this ~~shareholders~~funding ~~(numerator)~~will bycontinue, ~~the~~and ~~weighted~~is ~~average~~actively seeking ~~number~~new ofinvestors. ~~shares~~Management ~~outstanding~~believes ~~(denominator) during~~ the ~~period.~~existing ~~Diluted~~shareholders ~~EPS~~and ~~gives~~prospective ~~effect~~new toinvestors ~~all~~will ~~dilutive~~provide ~~potential~~the ~~common~~additional ~~shares~~cash ~~outstanding~~needed ~~during~~to meet the ~~period~~Company’s ~~using~~obligations ~~the~~as ~~treasury~~they ~~stock~~become ~~method~~due, and ~~convertible~~will ~~preferred~~allow ~~stock~~the ~~using~~development ~~the~~of ~~if-converted~~its ~~method~~core business. InDepending ~~computing~~upon ~~diluted~~market ~~EPS~~conditions, the ~~average~~Company ~~stock~~has ~~price~~plans ~~for~~to ~~the~~raise ~~period~~between is$2-4 million ~~used~~by ~~in determining~~ the ~~number~~end of ~~shares assumed to be purchased from~~ the ~~exercise~~calendar ofyear ~~stock~~2011 ~~options~~through orequity ~~warrants.~~and ~~Diluted~~favorable ~~EPS~~debt ~~excludes all dilutive potential shares if their effect is anti dilutive~~financing.

9If signs of improvement in the global economy do not progress as expected and the economic slowdown continues or worsens, the Company’s business, financial condition, cash flows and results of operations will be adversely affected. If that happens, the Company’s ability to access the capital or credit markets may worsen and it may not be able to obtain sufficient capital to satisfy or refinance all of its outstanding debt obligations as the obligations are required to be paid. If the Company is unable to achieve projected operating results and/or obtain the additional contemplated financing, management will be required to curtail growth plans and reduce development activities. The Company will be required to consider strategic and other alternatives, including, among other things, the sale of assets to generate funds, the negotiation of revised terms of its indebtedness, additional exchanges of its existing indebtedness obligations for new securities and additional equity offerings. The Company has retained financial advisors to assist it in considering these strategic, restructuring or other alternatives. There is no assurance that the Company will be successful in completing any of these alternatives. The Company’s failure to satisfy or refinance any of its indebtedness obligations as they come due, including through additional exchanges of new securities for existing indebtedness obligations or additional equity offerings, will result in a default and potential acceleration of its remaining indebtedness obligations and will have a material adverse effect on its business and continuance as a going concern.

~~Derivative~~4. SIGNFIICANT ~~Financial~~ACCOUNTING ~~Instruments~~POLICIES

~~The~~Revenue ~~Company~~Recognition accounts for derivative instruments in accordance with the provisions of ASC 815-10, Derivatives Hedging, and its related literature. ASC 815-10 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities.

The Company’s ~~does~~revenues ~~not~~comprise ~~use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms~~ of ~~convertible debt and equity instruments are reviewed to determine whether or not they contain embedded derivatives that are required under ASC 815-10 to be accounted for separated from~~ the ~~host~~following: contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.

~~Fair~~• ~~Value~~distribution of ~~Financial~~third ~~Instruments~~party mobile wireless broadband, modules and router solutions, as well as related accessories;

~~The~~• the Company’s ~~has~~proprietary ~~adopted~~wireless ~~and~~router ~~follows~~solutions ~~ASC~~that ~~820-10,~~are ~~Fair~~integrated ~~Value~~with Measurements and Disclosures, for measurement and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the ~~inputs~~Company’s tointernally ~~valuation~~developed ~~techniques~~software ~~used~~that tois ~~measure~~essential ~~fair value into three (3) broad levels. The fair value hierarchy gives the highest priority~~ to ~~quoted prices (unadjusted) in active markets for identical assets or liabilities and~~ the ~~lowest~~functionality ~~priority to unobservable inputs. The three (3) levels~~ of ~~fair~~the ~~value~~equipment; ~~hierarchy defined by ASC 820-10 are:~~and

~~Level~~• 1customization —services, ~~Inputs~~marketing ~~are unadjusted~~tools, ~~quoted~~provisioning ~~prices~~and inairtime ~~active~~activations ~~markets~~based ~~for~~on ~~identical~~individual ~~assets~~customer ~~or liabilities at the measurement date~~needs.

~~Level~~The 2Company —recognizes ~~Inputs~~revenue, ~~(other~~net ~~than~~of ~~quoted~~sales ~~market~~tax, ~~prices~~in ~~included~~accordance inwith ~~Level~~ASC 605-10, Revenue Recognition, when all four basic criteria are met: 1) there ~~are~~is ~~either~~evidence ~~directly~~that oran ~~indirectly~~arrangement ~~observable~~exists; ~~for~~2) delivery has occurred; 3) the ~~asset~~fee is fixed or ~~liability~~determinable; ~~through~~and ~~correlation~~4) collectability ~~with~~is ~~market~~reasonably ~~data~~assured. In addition, the Company does not recognize revenue until all customers’ acceptance criteria have been met. The criteria are usually met at the ~~measurement~~time ~~date~~of ~~and~~product shipment, except for shipments to distributors with rights of return. The portion of revenue from shipments to distributors subject to rights of return is deferred until the ~~duration~~agreed upon percentage of return or cancellation privileges lapse. The Company considered ASC 985-605, Software Revenue Recognition applied to the ~~instrument~~revenue recognition of the Company’s ~~anticipated~~newly ~~life~~developed products sold during the nine months ended July 31, 2011 and 2010. The Company does not currently sell its proprietary router product and internally developed software separately, and no services are provided after the product is shipped. Therefore, normal ASC 605-10 revenue recognition guidance applies as noted above.

~~Level~~Computation ~~3 — Inputs reflect management’s best estimate~~ of ~~what~~Income ~~market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique~~ and ~~the~~Loss ~~risk~~per ~~inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.~~Share

AsThe ~~defined~~Company bycomputes income and loss per share in accordance with ASC ~~820-10~~260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the ~~fair~~face ~~value~~of the statements of aoperations. ~~financial~~Basic ~~instrument~~EPS is ~~the~~computed ~~amount~~by atdividing ~~which~~net income (loss) available to common shareholders (numerator) by the ~~instrument~~weighted ~~could~~average benumber ~~exchanged~~of inshares outstanding a(denominator) ~~current~~during ~~transaction~~the ~~between~~period. ~~willing~~Diluted ~~parties,~~EPS ~~other~~gives ~~than~~effect into aall ~~forced~~dilutive orpotential ~~liquidation~~common ~~sale,~~shares ~~which~~outstanding ~~was~~during ~~further~~the ~~clarified~~period asusing the ~~price~~treasury ~~that~~stock ~~would~~method beand ~~received~~convertible topreferred ~~sell~~stock anusing ~~asset~~the orif-converted ~~paid~~method. toIn ~~transfer~~computing diluted aEPS, ~~liability~~the ~~(“an~~average ~~exit~~stock price”) for the period is used in andetermining ~~orderly~~the ~~transaction~~number ~~between~~of ~~market~~shares ~~participants~~assumed atto be purchased from the ~~measurement~~exercise ~~date~~of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

~~The~~9 reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of April 30, 2011 or that will be recognized in the future and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaids and other current assets, and other assets, accounts payable, accrued expenses, accrued interest, taxes payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The Company’s notes payable to shareholders, long-term debt, and convertible note approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at April 30, 2011 and October 31, 2010. The Company’s embedded derivative liability measured at fair value on a recurring basis was determined using the following inputs:

10Derivative Financial Instruments

				Fair Market Measurement at April 30, 2011
				Quoted
				Prices
				in Active		Significant
				Markets for		Other		Significant
				Identical		Observable		Unobservable
				Assets		Inputs		Inputs
		Total		(Level 1)		(Level 2)		(Level 3)
Embedded derivative liability – convertible note payable	$	159,224	$	-	$	-	$	159,224
Warrant derivative liability – private placement	$	126,021	$	-	$	-	$	126,021
Total derivatives	$	285,245	$	-	$	-	$	285,245

The Company accounts for derivative instruments in accordance with the provisions of ASC 815-10, Derivatives Hedging, and its related literature. ASC 815-10 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities.

The Company ~~fair~~does ~~value~~not ofuse ~~the~~derivative ~~embedded~~instruments ~~derivative~~to ~~related~~hedge exposures to ~~the~~cash ~~issuance~~flow, ofmarket ~~the~~or ~~convertible~~foreign ~~note~~currency ~~payable~~risk. asTerms of ~~April~~convertible ~~30,~~debt ~~2011~~and ~~was~~equity ~~$159,224.~~instruments ~~The~~are ~~Company’s~~reviewed ~~stock~~to ~~price~~determine ~~was~~whether ~~$0.08,~~or ~~risk-free~~not ~~discount~~they ~~rate~~contain ofembedded ~~4.15%~~derivatives ~~and~~that ~~volatility~~are required ofunder ~~125%~~ASC ~~was~~815-10 ~~used~~ to ~~obtain~~be ~~fair~~accounted ~~value~~for separated from the host contract, ~~resulting~~and inrecorded on the ~~change~~balance insheet at fair value. ofThe ~~$12,568~~fair ~~recorded~~value asof ~~other~~derivative ~~income~~liabilities inis ~~the~~required ~~Company’s~~to ~~Consolidated~~be ~~Statements~~revalued ofat ~~Operations~~each ~~for~~reporting date, with the ~~six~~corresponding changes ~~months~~in ~~ended~~fair ~~April~~value ~~30,~~recorded ~~2011~~in current period operating results.

~~The~~Fair ~~fair~~Value ~~value~~ of ~~the~~Financial ~~derivative~~Instruments related to the price protection of warrants in connection with the issuance of common stock in a private placement as of April 30, 2011 was $126,021. The Company’s stock price was $0.08, risk-free discount rate of 1.01% and volatility of 125% was used to obtain fair value, resulting in the change in fair value of $37,787 recorded as other income in the Company’s Consolidated Statements of Operations for the six months ended April 30, 2011.

AThe ~~reconciliation~~Company has adopted and follows ASC 820-10, Fair Value Measurements and Disclosures, for measurement and disclosures about fair value of ~~the~~its financial ~~Company’s~~instruments. ~~liabilities~~ASC ~~measured~~820-10 atestablishes a framework for measuring fair value onin generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a ~~recurring~~fair ~~basis~~value ~~using~~hierarchy ~~significant~~which ~~unobservable~~prioritizes the inputs to valuation techniques used to measure fair value into three (~~Level~~3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels isof asfair ~~follows~~value hierarchy defined by ASC 820-10 are:

		Fair Value Measurements Using
		Significant Unobservable Inputs
		(Level 3)
		Derivative Liabilities
		April 30,			October 31
		2011
		(unaudited)			2010
Balance beginning of period	$	154,615		$	-
Warrant derivative in connection with price placement		163,808			121,249
Total unrealized loss (income) included in earnings		(33,178	)		33,366
Balance end of period	$	285,245		$	154,615

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

~~Concentration~~Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of ~~Credit~~the ~~Risk~~instrument’s anticipated life.

~~The~~Level ~~Company~~3 ~~provides~~— ~~products~~Inputs ~~and~~reflect ~~services~~management’s tobest aestimate ~~variety~~ of ~~customers~~what ~~worldwide.~~market ~~Concentration~~participants ofwould ~~credit~~use ~~risk~~in ~~with~~pricing ~~respect to revenues and trade receivables is limited due to~~ the asset ~~geographic~~or ~~and~~liability ~~industry~~at ~~dispersion of~~ the ~~Company’s~~measurement ~~customer base~~date. ~~The~~Consideration ~~Company~~is ~~has~~given ~~not~~to ~~experienced~~the ~~significant~~risk ~~credit~~inherent ~~losses~~in ~~on its customer accounts. A small number of customers has typically accounted for a large percentage of~~ the ~~Company’s~~valuation ~~annual~~technique ~~revenues~~ and ~~trade~~the ~~accounts~~risk ~~receivable.~~inherent ~~For~~in the ~~three~~inputs ~~months~~to ~~ended April 30, 2011, three customers accounted for 21%, 18% and 12% respectively, of~~ the ~~Company’s revenues~~model. ~~Two~~Valuation ~~customers~~of ~~accounted~~instruments ~~for~~includes ~~30%,~~unobservable ~~and~~inputs ~~10%,~~to ~~respectively, of~~ the ~~Company’s~~valuation ~~revenues~~methodology that ~~for~~are ~~the~~significant ~~six~~to ~~months ended April 30, 2011. For~~ the ~~three~~measurement ~~months~~of ~~ended~~fair ~~April~~value ~~30, 2010, three customers accounted for 42%, 16% and 10%, respectively and three customers accounted for 40%, 15% and 11%, respectively,~~ of ~~the~~assets ~~Company’s~~or ~~revenues for the six months ended April 30, 2010~~liabilities.

11As defined by ASC 820-10, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

~~Three customers accounted for19%, 17% and~~ 10%, ~~respectively, of trade accounts receivable as of April 30, 2011. As of April 30, 2010, two customers accounted for 40% and 17% of outstanding trade accounts receivable.~~

The ~~Company~~reported ~~relied~~fair onvalues ~~two~~for ~~suppliers~~financial instruments that use Level 2 and Level 3 inputs to ~~provide~~determine ~~89%~~fair value are based on a variety of ~~total~~factors ~~inventory~~and ~~purchases~~assumptions. ~~for~~Accordingly, certain fair values may not represent actual values of the ~~three~~Company’s ~~months~~financial ~~ended~~instruments ~~April~~that 30could have been realized as of July 31, 2011. ~~For~~or that will be recognized in the ~~Six~~future ~~months~~and ~~ended~~do ~~April~~not ~~30,~~include ~~2011,~~expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s ~~relied~~financial onassets ~~inventory~~and ~~purchases~~liabilities, ofsuch ~~11%~~as cash and cash equivalents, ~~18%~~prepaids and ~~62%~~other ~~from~~current ~~three~~assets, ~~suppliers~~and other assets, ~~respectively~~accounts payable, accrued expenses, accrued interest, taxes payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The Company’s ~~relied~~notes onpayable ~~one~~to ~~supplier~~shareholders, tolong-term debt, ~~provide~~and ~~82%~~convertible note approximates the fair value of ~~total~~such ~~inventory~~instrument ~~purchases~~based ~~for~~upon management’s best estimate of interest rates that would be available to the ~~three~~Company ~~and~~for ~~six~~similar ~~months~~financial ~~ended~~arrangements ~~April~~at 30July 31, ~~2010~~2011 and October 31, ~~respectively~~2010. The Company’s embedded derivative liability measured at fair value on a recurring basis was determined using the following inputs:

Research and Development Costs


	Fair Market Measurement at July 31, 2011
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Embedded derivative liability – convertible note payable	$	181,347	$	—	$	—	$	181,347
Warrant derivative liability – private placement	$	63,329	$	—	$	—	$	63,329
Embedded derivative liability – convertible note payable	$	115,660	$	—	$	—	$	115,660
Warrant derivative liability – loan agreement	$	1,333,881	$	—	$	—	$	1,333,881
Warrant derivative liability – private placement	$	58,845	$	—	$	—	$	58,845

Total derivatives	$	1,753,062	$	—	$	—	$	1,753,062

~~Internal~~The ~~costs~~fair ~~relating~~value of the embedded derivative related to ~~research~~the ~~and~~issuance ~~development~~of ~~costs~~the ~~incurred~~convertible ~~for~~note ~~new~~payable ~~software~~as ~~products~~of July 31, 2011 was $181,347. The Company’s stock price was $0.04, risk-free discount rate of 3.77% and ~~enhancements~~volatility of 130.0% was used to ~~existing~~obtain ~~products~~fair value, resulting in the change in fair value of $22,124 recorded as other ~~than~~expense ~~certain~~in ~~software~~the ~~development~~Company’s Consolidated ~~costs~~Statements ~~that~~of ~~qualify~~Operations for ~~capitalization,~~the ~~are~~three ~~expensed~~and asnine ~~incurred~~months ended July 31, 2011.

~~Software~~The ~~Development~~fair ~~Costs~~value of the derivative related to the price protection of warrants in connection with the issuance of common stock in a private placement as of July 31, 2011 was $63,329. The Company’s stock price was $0.04, risk-free discount rate of 0.46% and volatility of 130.0% was used to obtain fair value, resulting in the change in fair value of $(62,692) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011.

The ~~Company~~fair ~~capitalizes~~value ~~software development costs in accordance with ASC 985-20, Costs~~ of ~~Computer~~the ~~Software~~embedded toderivative ~~Be Sold, Leased, or Otherwise Marketed. Software development costs consist of labor and overhead costs~~ related to ~~development of~~ the ~~Company’s~~issuance ~~suite~~ of ~~NexWare™ firmware for~~ the ~~Company’s~~convertible ~~suite~~note ofpayable ~~wireless~~as ~~routers. Software development costs are capitalized when technological feasibility and marketability~~ of ~~the~~July 31, ~~related~~2011 ~~product~~was ~~has been established~~$115,660. ~~On June 1, 2008, the~~ The Company ~~established technological feasibility upon successful completion and testing of the Company~~’s ~~first~~stock ~~working~~price ~~router~~was ~~product pilot firmware program~~$0.04, ~~Capitalized software costs are amortized on a product~~risk-~~by-product~~free ~~basis~~discount ~~over~~rate ~~five~~of ~~years,~~3.77% ~~beginning~~and ~~when~~volatility ~~the~~of ~~product~~130.0% iswas ~~available~~used ~~for general release~~ to ~~customers.~~obtain Asfair ~~of April 30~~value, ~~2011,~~resulting ~~software~~in ~~development~~the ~~costs~~change in ~~the~~fair ~~amount~~value of $~~837~~9,~~230~~186 ~~includes~~recorded ~~$109,374~~as ~~related~~other toexpense ~~the development of NexWare™ Enterprise Pro product expected to be released~~ in the ~~second~~Company’s ~~half~~Consolidated Statements of Operations ~~2011.~~for ~~Accordingly,~~the ~~amortization~~three ~~has~~and ~~not~~nine ~~begun~~months onended ~~NexWare™~~July 31, ~~Enterprise Pro to date~~2011.

~~Intangible~~The ~~Assets~~fair value of the derivative related to the price protection of warrants related to the issuance of warrants in connection with the convertible note payable as of July 31, 2011 was $1,302,463. The Company’s stock price was $0.04, risk-free discount rate of 0.55% and volatility of 130.0% was used to obtain fair value, resulting in the change in fair value of $(180,684) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011. The fair value of the derivative related to the price protection of warrants issued in connection with July 22, 2011 Private Placement as of July 31, 2011 was $58,944. The Company’s stock price was $0.04, risk-free discount rate of 0.55% and volatility of 130.0% was used to obtain fair value, resulting in the change in fair value of $(15,484) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011.

~~Intangible~~A ~~assets,~~reconciliation ~~consisting principally~~ of ~~patents~~the ~~and~~Company’s ~~trademarks,~~liabilities ~~are~~measured ~~accounted~~at ~~for~~fair invalue ~~accordance~~on ~~with~~a ~~ASC~~recurring ~~350.30,~~basis ~~Goodwill and Other Intangibles. Intangible assets that have finite lives are amortized~~ using ~~the~~significant ~~straight-line~~unobservable ~~method~~inputs ~~over~~(Level ~~their~~3) ~~estimated~~is ~~useful~~as follows: lives of fifteen years. Amortization expense for the three months and six months ended April 30, 2011 was $6,153 and $12,313, respectively. Amortization expense for the three months and six months ended April 30, 2010 was $4,858 and $9,188, respectively.

5. CERTAIN FINANCIAL STATEMENT INFORMATION


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Derivative Liabilities
	July 31, 2011 (unaudited)			October 31 2010
Balance beginning of period	$	154,615		$	—
Warrant derivative in connection with price placements and loan agreements		1,859,175			121,249
Total unrealized loss (income) included in earnings		(260,728	)		33,366

Balance end of period	$	1,753,062		$	154,615

Inventories, net
Inventories consist of the following:
		April 30,
		2011			October 31,
		(unaudited)			2010
Broadband cards	$	13,485		$	14,390
Modules		35,561			35,740
Routers		188,554			214,984
Accessories and branding collateral		77,489			77,164
		315,089			342,278
Less allowance for obsolescence		(170,753	)		(179,753	)
	$	144,336		$	162,525

12Concentration of Credit Risk

Property and equipment, net
Property and equipment consist of the following:
		April 30,
		2011			October 31,
		(unaudited)			2010
Computer equipment	$	203,911		$	201,906
Computer software and website development costs		119,093			119,093
Office and lab equipment		46,438			46,438
Furniture and fixtures		25,792			25,793
Leasehold improvements		17,947			17,947
Product tooling and moulds		115,369			87,816
		528,550			498,993
Less accumulated depreciation and amortization		(360,376	)		(293,394	)
	$	168,174		$	205,599

The Company provides products and services to a variety of customers worldwide. Concentration of credit risk with respect to revenues and trade receivables is limited due to the geographic and industry dispersion of the Company’s customer base. The Company has not experienced significant credit losses on its customer accounts. A small number of customers has typically accounted for a large percentage of the Company’s annual revenues and trade accounts receivable. For the three months ended July 31, 2011, three customers accounted for 24%, 22% and 14% respectively, of the Company’s revenues. Two customers accounted for 21%, and 11%, respectively, of the Company’s revenues for the nine months ended July 31, 2011. For the three months ended July 31, 2010, five customers accounted for 20%, 17%, 15%, 13% and 11%, respectively and two customers accounted for 36% and 12%, respectively, of the Company’s revenues for the nine months ended July 31, 2010.

~~Depreciation~~Two ~~expense~~customers accounted for ~~the~~23%, ~~three~~ and ~~six~~36%, ~~months~~respectively, ~~ended~~of ~~April~~trade accounts ~~30,~~receivable ~~2011~~as ~~totalled~~of ~~$33~~July 31,~~329~~ ~~and $66,979, respectively~~2011. ~~For~~As ~~the~~of ~~three~~July 31, ~~and~~2010, ~~six~~five ~~months~~customers ~~ended~~accounted ~~April~~for 3027%, ~~2010~~18%, ~~depreciation expense $28~~14%,~~893~~ 13% and ~~$59,995,~~10% ~~respectively~~of outstanding trade accounts receivable.

6The Company relied on one supplier to provide 92% of total inventory purchases for the three months ended July 31, 2011. ~~SUPPLEMENTAL~~For ~~CASH~~the ~~FLOW~~nine ~~INFORMATION~~months ended July 31, 2011, the Company relied on inventory purchases of 71% and 13% from two suppliers, respectively. The Company relied on two suppliers to provide 55% and 30% of total inventory purchases for the three months ended July 31, 2011 and three suppliers to provide 43%, 20% and 13% of total inventory purchases for the nine months ended July 31, 2010 and respectively.

		Six Months Ended April 30,
		2011		2010
Cash paid for interest	$	4,201	$	16,843
Cash paid for income taxes	$	-	$	800
Non-cash financing and investing activities:
Issuance of common stock in connection with settlement of note payable to vendor	$	385,742	$	-
Issuance of warrants for replacement of options previously issued in connection with the amended convertible debenture	$	81,615	$	-
Issuance of warrants in connection with private placement	$	163,808	$	-
Derivative liability for warrants issued with private placement	$	130,630	$	-
Conversion of convertible debenture into common stock	$	-	$	1,950,000
Conversion of promissory notes payable to related parties into common stock	$	-	$	211,837
Conversion of promissory notes payable to third parties into common stock	$	296,065	$	290,425
Issuance of common stock in connection with settlement of short-term borrowing advanced for subscription agreement	$	-	$	200,000

Research and Development Costs

7.Internal ~~NET~~costs ~~LOSS~~relating ~~PER~~to ~~SHARE~~research and development costs incurred for new software products and enhancements to existing products, other than certain software development costs that qualify for capitalization, are expensed as incurred.

~~Basic~~Software ~~earnings~~Development ~~per~~Costs share (“EPS”) exclude dilution and are computed by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Potentially dilutive securities, which currently comprise of options and a convertible debenture, are excluded from the diluted EPS computation in loss periods and when their exercise price is greater than the market price as their effect would be anti-dilutive.

13The Company capitalizes software development costs in accordance with ASC 985-20, Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Software development costs consist of labor and overhead costs related to development of the Company’s suite of NexWare™ firmware for the Company’s suite of wireless routers. Software development costs are capitalized when technological feasibility and marketability of the related product has been established. On June 1, 2008, the Company established technological feasibility upon successful completion and testing of the Company’s first working router product pilot firmware program. Capitalized software costs are amortized on a product-by-product basis over five years, beginning when the product is available for general release to customers. As of July 31, 2011, software development costs in the amount of $790,381 includes $109,374 related to the development of NexWare™ Enterprise Pro/Business Class III product expected to be released in the second quarter of fiscal 2012. Accordingly, amortization has not begun on NexWare™ Enterprise Pro/Business Class III to date.

AIntangible ~~reconciliation~~Assets ~~of weighted-average basic shares outstanding to weighted-average diluted shares outstanding follows:~~

	Three Months Ended			Six Months Ended
	April 30,			April 30,
		2011	2010		2011	2010
Basic weighted average common shares outstanding		75,627,533	58,400,638		70,022,605	56,261,417
Effect of dilutive securities:
Convertible debenture			-			-
Stock options			-			-
Diluted weighted average common and potential Common shares outstanding		75,627,533	58,400,638		70,022,605	56,261,417

Intangible assets, consisting principally of patents and trademarks, are accounted for in accordance with ASC 350.30, Goodwill and Other Intangibles. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of fifteen years. Amortization expense for the three months and nine months ended July 31, 2011 was $6,156 and $18,469, respectively. Amortization expense for the three months and nine months ended July 31, 2010 was $5,363 and $14,551, respectively.

As of April 30, 2011, shares reserved for the exercise of warrants totaled 12,062,723 and 15,000,000 shares are reserved for issuance upon the exercise of options granted under the Company’s Stock Option Plan, of which 9,672,917 are outstanding5. CERTAIN InFINANCIAL ~~addition,~~STATEMENT ~~116,670~~INFORMATION shares are reserved in connection with a consulting agreement entered into on March 22, 2010, and 1,000,000 shares are reserved for the convertible note payable agreement entered into on August 20, 2010. On February 25, 2011, the lender delivered a notice of conversion with respect to $10,000 of the principal amount of the note into 142,030 common shares and on March 22, 2011, the lender converted $20,000 of the principal amount of the note into 289,665 common shares. These were excluded from the calculation of diluted earnings per share as their effect was anti-dilutive.

~~As of April 30~~Inventories, ~~2010,~~net shares reserved for conversion of the convertible debenture, and the exercise of warrants to purchase common stock totaled 0 and 16,129,064, respectively. 1,129,034 shares are reserved for issuance upon the exercise of stock options granted to a lender and 15,000,000 shares are reserved for issuance upon the exercise of options granted under the Company’s Stock Option Plan, of which 10,193,750 have been granted. These were excluded from the calculation of diluted earnings per share as their effect was anti-dilutive.

8.Inventories ~~NOTE~~consist ~~PAYABLE~~of TOthe ~~VENDOR~~following:

On January 13, 2011, the Company entered into a Debt Settlement and Subscription Agreement with a vendor. Under the terms of the agreement, the Company issued to the vendor 1,500,000 and 2,357,406 shares of common stock of the Company at a price of $0.10 and $0.20 per share, respectively, as full settlement of $150,000 and $471,481, respectively, of the outstanding debt and accrued interest thereon as of January 13, 2011. The Company recorded a gain on the settlement of this note payable of $231,016, which is included in gain on settlement of note payable and accounts payable in the Company’s Condensed Consolidated Statements of Operations.6


	July 31, 2011 (unaudited)			October 31, 2010
Broadband cards	$	—		$	14,390
End of life inventory		98,742			100,207
Modules		—			35,740
Routers		100,063			101,320
Raw materials		43,107			13,457
Accessories and branding collateral		68,534			77,164

		310,446			342,278
Less allowance for obsolescence		(170,752	)		(179,753	)

	$	139,694		$	162,525

9.12 ~~CONVERTIBLE NOTE PAYABLE~~

OnProperty August 20, 2010, the Company entered into a 10% Convertible Note Agreement with an investor for total proceeds of $400,000, less $8,500 debt issuance fees which is amortized over twelve months to July 31, 2011. The Convertible Note Agreement bears interest at 10% per annum and ~~matures July 31~~equipment, ~~2011.~~net The note holder has the option after six months following the issuance date to convert the outstanding principal amount under the Convertible Note Agreement, together with unpaid interest thereon, into the Company’s common stock at a conversion price equal to the lesser of (i) $0.50 and (ii) 80% of the average of the three lowest daily dollar volume-weighted average sale price (“VWAPS”) for the Company’s common stock on any particular trading day during the twenty (20) consecutive trading days immediately preceding the applicable conversion date on which the Holder elects to convert all or part of the note. Total amortization expense in connection with the debt issuance costs for the six months ended April 30, 2011 is $4,447 and is included in interest and other expense in the Company’s Condensed Consolidated Statements of Operations.

~~The~~Property ~~Company determined that the VWAP contained certain price protection features~~ and ~~constituted~~equipment anconsist ~~embedded derivative. Using the Monte Carlo Valuation Model, the fair value~~ of the ~~embedded~~following: derivative at April 30, 2011 was determined to be $159,223. The Company’s stock price on April 30, 2011 was $0.08, risk-free discount rate of 4.15% and volatility of 125% was used to obtain fair value as of April 30, 2011, resulting in the decrease in fair value for the three month period ended April 30, 2011 of $12,568 which was offset by an increase in the fair value of $17,177 for the three month period ended January 31, 2011 for a net increase of $4,609 which was recorded as other expense in the Company’s Condensed Consolidated Statements of Operations for the six months ended April 30, 2011. Accretion of the debt discount associated with the embedded derivative totaled $72,951 for the six months ended April 30, 2011 and is included in interest and other expense in the Company’s Condensed Consolidated Statements of Operations.


	July 31, 2011 (unaudited)			October 31, 2010
Computer equipment	$	203,899		$	201,906
Computer software and website development costs		119,093			119,093
Office and lab equipment		46,438			46,438
Furniture and fixtures		25,793			25,793
Leasehold improvements		17,947			17,947
Product tooling and moulds		115,369			87,816

		528,539			498,993
Less accumulated depreciation and amortization		(391,930	)		(293,394	)

	$	136,609		$	205,599

~~Under~~Depreciation ~~the~~expense ~~scope~~for ~~of ASC 815-10,~~ the ~~freestanding~~three ~~detachable~~and ~~warrants~~nine ~~issued~~months inended ~~connection~~July 31, ~~with~~2011 ~~the~~totalled ~~issuance of the debt instrument are not considered to be derivative instruments. Under the Black-Scholes model~~$31,554 ~~the~~and ~~Company determined the fair value of the warrants is~~ $4998,~~458~~533, ~~which~~respectively. For isthe ~~recorded~~three ~~as debt discount~~ and tonine ~~be accreted to interest expense over twelve~~ months toended July 31, ~~2011.~~2010, ~~Accretion~~depreciation ofexpense ~~the~~was ~~debt discount associated with the warrants totaled~~ $2527,~~873~~704 ~~for~~and ~~the six months ended April 30~~$87,700, ~~2011 and is included in interest and other expense in the Company’s Condensed Consolidated Statements of Operations~~respectively.

~~On February 25, 2011, the note holder executed a Form of Conversion Notice for conversion of $10,000, plus accrued interest thereon totaling $518, into 142,030 shares of common stock of the Company~~6. SUPPLEMENTAL OnCASH ~~March~~FLOW ~~24,~~INFORMATION ~~2011, the note holder converted $20,000, plus accrued interest thereon totaling $21,172.60, into 289,665 shares of common stock.~~

On March 21, 2011, the Company entered into an amendment with the lender to extend the maturity date of the note payable from July 31, 2011 to October 31, 2011. In exchange for the extension, the Company issued a three-year warrant to purchase 333,333 shares of common stock with an exercise price of $0.15 per share. Using the Black-Scholes model, the Company determined the fair value of the warrants is $27,762, which is recorded as interest expense in the period in the Company’s Condensed Consolidated Statements of Operations.


	Nine months Ended July 31,
	2011		2010
Cash paid for interest	$	21,070		79,923

Cash paid for income taxes	$	800	$	1,945

Non-cash financing and investing activities:
Issuance of common stock in connection with settlement of note payable to vendor	$	385,742	$	—

Issuance of common stock in connection with settlement of accounts payable	$		$	21,485

Issuance of common stock in connection with consulting agreements	$		$	74,000

Issuance of warrants for replacement of options previously issued in connection with the amended convertible debenture	$	81,615	$	—

Issuance of warrants in connection with private placement	$	163,808	$	—

Issuance of warrants in connection with extension of maturity date of a convertible note payable	$	27,762

Issuance of warrants in connection with loan agreement	$	1,557,576

Derivative liability for warrants issued with private placement	$	130,630	$	—

Derivative liability for warrants issued with private placement	$	106,474

Conversion of convertible debenture into common stock	$	—	$	1,950,000

Conversion of promissory notes payable to related parties into common stock	$	—	$	211,837

Conversion of promissory notes payable to third parties into common stock	$	296,065	$	290,425

Issuance of common stock in connection with settlement of short-term borrowing advanced for subscription agreement	$	—	$	200,000

~~10.~~13 ~~SHAREHOLDERS’ DEFICIT~~

~~Non-brokered~~7. NET ~~Private~~LOSS ~~Placements~~PER SHARE

OnBasic ~~December~~earnings ~~17,~~per ~~2010,~~share ~~the~~(“EPS”) ~~Company~~exclude ~~closed~~dilution aand ~~private~~are ~~placement~~computed ofby ~~8,600,000~~dividing ~~shares~~net ofincome ~~common~~or ~~stock~~loss atby athe ~~purchase~~weighted ~~price~~average number of ~~$0.10~~common ~~per~~shares ~~share~~outstanding for ~~aggregate~~the ~~proceeds~~period. ofDiluted ~~$860,000.~~EPS ~~The~~reflects ~~Company~~the ~~issued~~potential ~~3,000,000~~dilution ~~shares~~that tocould ~~two~~occur ~~non-U.S.~~if ~~persons~~securities ~~(as~~or ~~that~~other ~~term~~contracts isto ~~defined~~issue incommon ~~Regulation~~stock Swere ofexercised ~~the~~or ~~Securities~~converted ~~Act~~into ofcommon ~~1933,~~stock. asPotentially ~~amended)~~dilutive insecurities, which ancurrently ~~offshore~~comprise ~~transaction~~of ~~relying~~options ona ~~Regulation~~convertible Sdebenture and~~/or~~ ~~Section~~warrants, ~~4(2)~~are ofexcluded from the ~~Securities~~diluted ~~Act~~EPS ofcomputation ~~1933,~~in asloss ~~amended~~periods ~~(the “Act”)~~ and ~~5,600,000~~when ~~shares~~their toexercise ~~nine~~price ~~U.S.~~is ~~persons~~greater ~~pursuant~~than tothe ~~Rule~~market ~~506~~price ofas ~~Regulation~~their Deffect ~~and/or~~would ~~Section~~be ~~4(2)~~anti-dilutive.

~~Additionally,~~A ~~1,400,000~~reconciliation ~~warrants were issued as a placement fee and for ongoing investment banking and other financial advisory services to three U.S. persons pursuant to Rule 506~~ of ~~Regulation~~weighted-average Dbasic ~~and/or~~shares ~~Section~~outstanding ~~4(2). The warrants are exercisable at a strike price equal~~ to ~~US$0.28~~weighted-average ~~per~~diluted ~~share~~shares ~~until~~outstanding ~~November~~follows: ~~18, 2013.~~

On March 23, 2011, the Company closed a private placement consisting of 2,250,000 units at a purchase price of $0.10 per unit for aggregate gross proceeds of $225,000. Each Unit consists of one common share in the capital of the Company and one common share purchase warrant exercisable at a strike price of $0.15 per share at any time until March 23, 2014. The 2,250,000 units were issued to four U.S. persons pursuant to Rule 506 of Regulation D and/or Section 4(2).


	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
Basic weighted average common shares outstanding		78,545,869		59,528,328		72,863,693		57,343,062
Effect of dilutive securities:
Convertible debenture		—		—		—		—
Stock options		—		—		—		—

Diluted weighted average common and potential Common shares outstanding		78,545,869		59,528,328		72,863,693		57,343,062

~~The~~As ~~Company~~of ~~determined~~July 31, ~~that~~2011, ~~the~~shares ~~adjustment~~reserved ~~feature~~for ~~within~~ the ~~warrants~~exercise ~~require~~of ~~the Company to grant additional~~ warrants tototaled ~~each~~19,537,723 ~~warrant~~and ~~holder~~15,000,000 inshares ~~the~~are reserved ~~case~~for ~~that~~issuance ~~any~~upon ~~future grants by~~ the ~~Company have an~~ exercise ~~price~~of ~~below~~options ~~$0.15~~granted ~~constituted~~under ~~a derivative. Using~~ the ~~Monte~~Company’s ~~Carlo~~Stock ~~Valuation~~Option ~~Model~~Plan, ~~the fair value~~ of ~~the~~which ~~derivative was determined to be $163~~9,~~080 at the March 23~~410,417 ~~2011~~are ~~issuance date~~outstanding. AtIn ~~April 30~~addition, ~~201~~1,000,000 ~~the~~shares ~~value~~are ~~was~~reserved ~~determined~~for tothe beconvertible ~~$126,020.~~note ~~The~~payable ~~Company’s~~agreement ~~stock~~entered ~~price~~into on ~~April 30~~ August 20, ~~2011 was $0~~2010.~~08,~~ ~~risk-free~~These ~~discount~~were ~~rate~~excluded offrom ~~1.01%~~the ~~and~~calculation ~~volatility~~ of ~~125%~~diluted ~~was~~earnings ~~used~~per toshare ~~obtain fair value~~ as oftheir ~~April~~effect ~~30,~~was ~~2011, resulting in the decrease in fair value of $37,787 recorded as other income in the Company’s Condensed Consolidated Statements of Operations for the six months ended April 30, 2011~~anti-dilutive.

158. NOTE PAYABLE TO VENDOR

~~Short~~On ~~Term~~January 13, ~~Note~~2011, ~~Payable~~the Company entered into a Debt Settlement and Subscription Agreement with a vendor. Under the terms of the agreement, the Company issued to the vendor 1,500,000 and 2,357,406 shares of common stock of the Company at a price of $0.10 and $0.20 per share, respectively, as full settlement of $150,000 and $471,481, respectively, of the outstanding debt and accrued interest thereon as of January 13, 2011. The Company recorded a gain on the settlement of this note payable of $231,016, which is included in gain on settlement of note payable and accounts payable in the Company’s Condensed Consolidated Statements of Operations.

~~On February 2, 2011, the Company entered into short-term promissory note agreement in the amount of $263,075 with an unrelated party, for working capital purposes~~9. CONVERTIBLE ~~The~~NOTE ~~promissory~~PAYABLE ~~note agreement is due on demand and bears interest at 12% per annum.~~

On August 20, 2010, the Company entered into a 10% Convertible Note ~~Payable~~Agreement with an investor for total proceeds of $400,000, less $8,500 debt issuance fees which was is amortized over twelve months to July 31, 2011. The Convertible Note Agreement bore interest at 10% per annum and was due to mature July 31, 2011. In connection with the Agreement, the Company issued 333,333 three year warrants to purchase shares of common stock with an exercise price of $0.15 per share. On March 21, 2011, the Company entered into an amendment with the lender to extend the maturity date of the note payable from July 31, 2011 to October 31, 2011. In exchange for the extension, the Company issued an additional 333,333 three year warrants to purchase shares of common stock with an exercise price of $0.15 per share. Using the Black-Scholes model, the Company determined the fair value of the 666,666 warrants is $27,762 which is recorded as interest expense in the period in the Company’s Condensed Consolidated Statements of Operations.

OnThe ~~February~~note ~~25,~~holder ~~2011,~~has athe ~~convertible~~option ~~note~~after ~~holder~~nine ~~delivered~~months afollowing ~~notice~~the ofissuance ~~conversion~~date ~~with respect~~ to ~~$10,000~~convert of the outstanding principal amount ofunder athe ~~note~~Convertible Note Agreement, ~~dated~~together ~~August~~with ~~20,~~unpaid ~~2010~~interest thereon, ininto the ~~principal~~Company’s ~~amount~~common ofstock ~~$400,000~~at ~~issued~~a byconversion ~~the~~price ~~company~~equal to the ~~note~~lesser ~~holder~~of (i) $0.50 ~~Effective~~and ~~February~~(ii) 80% ~~25,~~of ~~2011,~~ the ~~$10,000,~~average ~~and~~of ~~$518~~the ~~accrued~~three ~~interest~~lowest ~~thereon,~~daily ~~were~~dollar ~~converted~~volume-weighted ~~into~~average ~~142,030~~sale ~~common~~price (“VWAP”) ~~shares~~for of the Company’s common stock aton aany particular trading day during the twenty (20) consecutive trading days immediately preceding the applicable conversion ~~price~~date on which the Holder elects to convert all or part of $0the note.~~074053~~ ~~per~~Total ~~share~~amortization expense in connection with the debt issuance costs for the nine months ended July 31, 2011 is $6,706 and is included in interest and other expense in the Company’s Condensed Consolidated Statements of Operations.

On14 March 22, 2011, the convertible note holder delivered a notice of conversion with respect to $20,000 of the principal amount of the note, dated August 20, 2010. Effective March 23, 2011, the $20,000, and $1,172.60 accrued interest thereon, were converted into 289,665 common shares of the Company’s stock at a conversion price of $0.0731 per share. See Note 9 – Convertible Note Payable.

~~Conversion~~The Company determined that the VWAP contained certain price protection features and constituted an embedded derivative. Using the Monte Carlo Valuation Model, the fair value of ~~Short~~the embedded derivative at July 31, 2011 was determined to be $181,347. The Company’s stock price on July 31, 2011 was $0.04. A risk-~~Term~~free ~~Promissory~~discount ~~Note~~rate ~~Payable~~of 3.77% and volatility of 130.0% was used to obtain fair value as of July 31, 2011, resulting in the increase in fair value for the three month period ended July 31, 2011 of $22,124, which was which was recorded as other expense in the Company’s Condensed Consolidated Statements of Operations for the nine months ended July 31, 2011. Accretion of the debt discount associated with the embedded derivative totaled $72,951 for the nine months ended July 31, 2011 and is included in interest and other expense in the Company’s Condensed Consolidated Statements of Operations.

OnUnder ~~February~~the ~~25,~~scope ~~2011~~of ASC 815-10, the ~~Company~~333,333 warrants ~~entered~~issued ~~into~~on aAugust 20, ~~debt~~2010 ~~settlement~~in ~~and~~connection ~~subscription~~with ~~agreement~~the ~~with~~issuance ~~one~~of ~~investor~~the ~~whereby~~debt instrument, as well as the ~~Company~~333,333 ~~agreed~~warrants toissued ~~issue~~on 2March 21,~~500~~ 2011,~~000~~ ~~shares~~are ofnot considered to be derivative instruments. Under the Black-Scholes model, the Company’s ~~common~~determined ~~stock~~the infair ~~settlement~~value of ~~$250,000~~the ofwarrants ais $~~300~~49,~~000~~458, ~~short-term~~which ~~promissory~~is ~~notes~~recorded ~~payable~~as ~~owing~~debt bydiscount usand to ~~the~~be ~~investor.~~accreted ~~The~~to ~~shares~~interest ~~were~~expense ~~issued~~over attwelve amonths ~~price~~to ofJuly 31, $02011.10 ~~per~~Accretion ~~share.~~of Onthe ~~February~~debt ~~25,~~discount ~~2010~~associated ~~the~~with ~~Company issued~~ the ~~investor~~warrants atotaled $39,023 ~~note~~for in the ~~principal~~nine ~~amount~~months ofended ~~$77~~July 31,~~321with~~ ~~respect~~2011 toand ~~the~~is ~~remaining~~included ~~principal~~in ~~plus~~ interest ~~payable~~and onother expense in the ~~debt~~Company’s asCondensed ofConsolidated ~~that~~Statements ~~date~~of Operations.

~~Consulting~~On ~~Agreements~~February 25, 2011, the note holder executed a Form of Conversion Notice for conversion of $10,000, plus accrued interest thereon totaling $518, into 142,030 shares of common stock of the Company. On March 24, 2011, the note holder converted $20,000, plus accrued interest thereon totaling $21,172.60, into 289,665 shares of common stock.

On February 24, 2011, the Company entered into a letter agreement with a financial advisor, whereby the advisor agreed to provide certain advisory services to the Company in consideration for the issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10. BRIDGE ~~per~~LOAN ~~share,~~AND ~~with~~REVOLVING ~~the~~LOAN shares to be issued as follows: (a) 450,000 shares upon execution of the letter agreement; and (b) 150,000 shares at the end of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement.

~~Also~~On May 16, on2011, ~~February 24~~Nexaira, ~~2011~~Inc., the Company’s US subsidiary, entered into a ~~consulting~~Loan ~~agreement~~Agreement with Centurion Credit Funding LLC (the ‘Lender”), ~~whereby~~pursuant to which the ~~consultant~~Lender ~~has~~provided ~~agreed~~a to$300,000 ~~provide~~bridge ~~certain~~loan ~~consulting~~(the ~~services~~“Bridge Loan”) and up to a $2.2 million revolving purchase order financing loan (the ~~Company~~“Revolving inLoan”). ~~consideration~~The maturity date for the ~~issuance~~Bridge Loan ofis upNovember 16, to2011 ~~1,800,000~~and ~~shares~~the ofmaturity ~~restricted~~date ~~common~~for ~~stock~~the atRevolving aLoan ~~price~~is ofMay 16, $02012.10 ~~per~~The ~~share,~~Bridge Loan and Revolving Loan are repayable without penalty prior to bematurity ~~issued~~at asthe ~~follows:~~Company’s ~~(a)~~option. ~~450,000~~The ~~shares~~Loan ~~upon~~Agreement ~~execution~~was executed solely in connection with the conversion provisions of the ~~consulting~~Loan ~~agreement;~~Agreement, ~~and~~pursuant to which any obligations (bincluding any accrued interest and fees) ~~150,000~~owing under the Loan Agreement are convertible into shares of common stock at ~~the~~a ~~beginning~~conversion price equal to 70% of ~~each~~the ~~month~~weighted ~~starting~~average onsale price per share over the ~~last~~thirty (30) day ofperiod prior to the ~~fourth~~conversion ~~month~~date. ~~through~~As ~~the~~at ~~twelfth~~July ~~month~~31, of2011 $300,000 was outstanding on the ~~term~~Bridge ofLoan and $52,716 was outstanding on the ~~agreement~~revolving loan.

OnOutstanding ~~March~~advances 2,under ~~2011,~~the inBridge ~~connection~~Loan ~~with~~and the ~~entry~~Revolving ~~into~~Loan ~~the~~bear ~~letter~~interest ~~agreements~~at ~~with~~ the ~~financial~~rate ~~advisor~~of ~~and~~36% per ~~the~~annum. ~~consultant~~Following asthe ~~described~~occurrence ~~above,~~and during the ~~Company~~continuance ~~issued~~of an ~~aggregate~~event of ~~900,000~~default ~~shares~~advances ofbear ~~common~~interest ~~stock~~at tothe ~~four~~rate ~~U.S.~~of ~~persons~~46% per annum.

OnThe ~~April~~Revolving ~~18,~~Loan ~~2011,~~provides ~~the~~for ~~Company~~advances ~~entered~~for inventory ~~into~~in aan ~~letter~~amount ~~agreement~~equal ~~with~~to the initial deposit required by a ~~financial~~supplier ~~consultant,~~in ~~whereby~~connection with the ~~consultant~~manufacture ~~agreed~~or tosupply ~~provide~~of ~~certain~~inventory ~~advisory~~(a ~~services~~“Deposit toRevolving ~~the~~Advance”). ~~Company~~Any inoutstanding ~~consideration~~balance ~~for~~of aany ~~$10,000~~Deposit ~~monthly~~Revolving ~~retainer~~Advance is due and payable on the ~~issuance~~earlier of ~~500,000~~receipt ~~options~~of tofunds ~~purchase~~from ~~shares~~the ofapplicable ~~common~~customer ~~stock~~or at120 adays ~~price~~after the making of $0such Deposit Revolving Advance.15 ~~per~~The ~~share,~~Revolving ~~with~~Loan also provides for advances in an amount equal to the ~~shares~~remaining amount due to ~~vest~~a ~~over~~supplier 18for inventory ~~months.~~manufactured ~~The~~or ~~fair~~supplied ~~value~~by ofsuch ~~the~~supplier ~~options~~(a ~~earned~~“Balance asRevolving ofAdvance”). ~~April~~Any ~~30,~~outstanding ~~2011~~balance ~~was~~of ~~approximately~~any ~~$1,000.~~Balance ~~The~~Revolving ~~remaining~~Advance ~~unvested~~shall be due and ~~unearned~~payable ~~options~~on ~~will~~the beearlier ~~valued~~of ~~each~~receipt ~~reporting~~of ~~period~~funds infrom ~~accordance~~the ~~with~~applicable ~~ASC~~customer ~~505~~or ~~and~~60 days ~~recorded~~after ~~and~~the ~~compensation~~making ~~expense~~of such Balance Revolving Advance.

~~Shares~~Maturity ~~Reserved~~of ~~for~~the ~~Future~~Bridge ~~Issuance~~Loan and the Revolving Loan may be accelerated if there is an event of default, as that term is defined in the Loan Agreement.

~~The~~In ~~Company~~connection iswith ~~required~~the toLoan ~~reserve~~Agreement, ~~and~~the ~~keep~~Company ~~available~~granted ofsecurity ~~its~~over ~~authorized, but unissued shares~~ all of ~~common~~its ~~stock~~assets anand ~~amount~~guaranteed ~~sufficient~~repayment ~~to effect the conversion~~ of ~~the~~all ~~outstanding~~obligations ~~Convertible~~owing ~~Note Payable, warrants, plus shares granted and available for grant~~ under the ~~Company’s~~Loan ~~stock option plans, and shares due in connection with consulting agreement~~Agreement. ~~As of April 30, 2011, shares reserved for future issuance are comprised of the following:~~

Also in connection with the Loan Agreement, the Company issued share purchase warrants to the Lender to acquire up to 15 million shares of common stock, 4 million of which were immediately exercisable and 11 million of which become exercisable as the rate of 1 million per month beginning on June 16, 2011 provided that there remains unpaid amounts under the Loan Agreement. All warrants become immediately exercisable if there is an event of default, as that term is defined in the Loan Agreement. Upon repayment of all obligations under the Loan Agreement, all share purchase warrants that have not yet become exercisable will expire. All warrants will be exercisable for a period of three years from the date that such warrants become exercisable. The exercise price is equal to $0.10 subject to adjustment from time to time. As of July 31, 2011, 6,000,000 million are immediately exercisable.

		Shares
		Reserved
	Outstanding stock options under the 2009 Stock Option Plan	9,672,917
	Additional shares available under the 2009 Stock Option Plan	5,327,083
	Convertible note payable	1,666,666
	Warrants issued to related party in connection with debt	3,827,708
	Warrants issued in connection with private placements	6,255,849
	Warrants issued to vendor in connection with Promissory Note Agreement	1,312,500
		28,062,723

~~Stock~~The ~~Option~~Company ~~Plan~~determined that the VWAP contained certain price protection features and constituted an embedded derivative. Using the Monte Carlo Valuation Model, the fair value of the embedded derivative at May 16, 2011 was determined to be $1,483,147. The Company’s stock price on July 31, 2011 was $0.04. A risk-free discount rate of 3.77% and volatility of 130.0% was used to obtain fair value as of July 31, 2011, resulting in the decrease in fair value for the three month period ended July 31, 2011 of $180,684 which was recorded as other expense in the Company’s Condensed Consolidated Statements of Operations for the nine months ended July 31, 2011.

~~The~~$106,474 ~~Company’s~~relating ~~2009~~to ~~Stock~~the ~~Option~~loan ~~Plan~~conversion ~~provides~~feature ~~for~~and $193,526 related to the ~~granting~~warrants ofissued ~~equity~~were ~~awards~~treated as a debt discount amounting to $300,000. ~~including~~This ~~restricted~~discount ~~stock~~will ~~and~~be ~~incentive~~amortized ~~and~~over ~~nonqualified~~the ~~stock~~life ~~options~~of tothe ~~purchase~~Bridge upLoan towhich 15is 6 months. At July 31,~~000~~ 2011,~~000~~ ~~shares~~amortization of the ~~Company’s~~discount ~~common~~of ~~stock~~$125,000 towas included ~~employees,~~in ~~directors,~~interest ~~officers~~ and ~~independent~~other ~~consultants~~expenses. The balance outstanding of the ~~Company~~discount as at July 31, 2011 was $175,000.

A$1,289,621 ~~summary~~related ofto ~~stock~~the warrants ~~option~~issued ~~activity~~to secure the loan have been treated as prepaid financing costs in ~~connection~~relation ~~with~~to the ~~2009~~Revolving ~~Stock~~Loan. ~~Option~~These ~~Plan~~costs aswill be amortized over the 12 month term of ~~April~~the 30Revolving Loan. At July 31, 2011, isamortization of these fees of $268,671 was included in interest and other expense. The balance of the prepaid financing costs after amortization was $1,020,950 as ~~follows:~~at July 31, 2011.

				Weighted
				Average
	Number			Exercise
	Outstanding			Price
Options outstanding October 31, 2009	8,400,000		$	0.15
Granted	2,450,000		$	0.34
Exercised	(225,000	)	$	0.15
Forfeited	(518,750	)	$	0.15
Options outstanding October 31, 2010	10,106,250		$	0.20
Granted	500,000		$	0.15
Exercised	-			-
Forfeited	(933,333	)	$	0.15
Options outstanding April 30, 2011	9,672,917		$	0.20
Options exercisable April 30, 2011	8,172,917		$	018

On May 16, 2011, the Company issued 350,000 warrants as a commission in connection with the Loan Agreement. The warrants are exercisable at any time up to May 16, 2014 at an exercise price of $0.15 per share. The Company determined that the VWAP contained certain price protection features and constituted an embedded derivative. Using the Monte Carlo Valuation Model, the fair value of the embedded derivative at July 31, 2011 was determined to be $14,000. The Company’s stock price on July 31, 2011 was $0.04. A risk-free discount rate of 3.77% and volatility of 130.0% was used to obtain fair value as of July 31, 2011, resulting in the decrease in fair value for the three month period ended July 31, 2011 of $15,484 which was recorded as other expense in the Company’s Condensed Consolidated Statements of Operations for the nine months ended July 31, 2011.

~~Stock based compensation expense included in selling, general and administrative expense for the three and six months ended April 30, 2011 totalled $49,673 and $99,434, respectively~~11. SHAREHOLDERS’ ~~Stock~~DEFICIT based compensation expense included in selling, general and administrative expense for the three and six months ended April 30, 2010 totalled $64,065 and $65,542, respectively. The amount of unearned stock-based compensation currently estimated to be expensed from now through fiscal 2012 related to unvested share-based payment awards at April 30, 2011 is $89,347.

~~11.~~Non-brokered ~~RELATED~~Private ~~PARTY~~Placement ~~TRANSACTIONS~~

On ~~November 7~~December 17, 2010, ~~1,129,034~~the ~~stock~~Company ~~options~~closed ~~granted~~a toprivate aplacement ~~Lender~~of ~~and~~8,600,000 ~~related~~shares ~~party~~of incommon ~~November~~stock ~~2008~~at ina ~~connection~~purchase ~~with~~price ~~the~~of ~~Convertible~~$0.10 ~~Loan~~per ~~Agreement~~share ~~expired.~~for Onaggregate ~~January~~proceeds ~~14,~~of ~~2011~~$860,000. ~~the~~The Company ~~granted 1~~issued 3,~~129~~000,~~034~~000 ~~warrants~~shares to ~~purchase~~two ~~1,129,034~~non-U.S. ~~shares~~persons of(as ~~the~~that ~~Company’s~~term ~~common~~is ~~stock~~defined atin Regulation S of the ~~exercise~~Securities ~~price~~Act of ~~$0.20~~1933, ~~per~~as ~~share,~~amended) ~~expiring~~in onan ~~January~~offshore ~~15,~~transaction ~~2013.~~relying ~~The~~on ~~Company~~Regulation ~~recognized~~S and/or Section 4(2) of the ~~fair~~Securities ~~value~~Act of ~~the~~1933, ~~change~~as ~~under~~amended (the “Act”) ~~Black-Scholes~~and ~~model~~5,600,000 ~~totaling~~shares ~~$81,615~~to ~~effective~~nine ~~December~~U.S. ~~17,~~persons ~~2010~~pursuant to Rule 506 of Regulation D and/or Section 4(2).

~~On January 14~~Additionally, ~~2011~~ 1,400,000 ~~the Board of Directors extended the expiry dates of~~ warrants, were issued inas ~~August~~a ~~2009~~placement infee ~~connection~~and ~~with the borrowing of funds~~ for ~~working~~ongoing ~~capital~~investment ~~purposes,~~banking ~~from~~and ~~January~~other ~~15,~~financial ~~2011~~advisory services to ~~January~~three ~~15, 2013~~U.S. ~~The~~persons ~~funds~~pursuant ~~were~~to ~~provided~~Rule by506 ~~0840386~~of ~~B.C.~~Regulation ~~Ltd.~~D and/or ~~its nominees, 0793296 B~~Section 4(2).C. ~~Ltd,~~The ~~and~~warrants ~~0885084~~are ~~Alberta~~exercisable ~~Inc.,~~at a ~~company~~strike price ~~related~~equal to ~~the~~US$0.28 ~~Company’s~~per ~~Chief~~share ~~Executive~~until ~~Officer~~November 18, ~~Chief Financial Officer, and other third party investors~~2013.

12On March 23, 2011, the Company closed a private placement consisting of 2,250,000 units for aggregate gross proceeds of $225,000. ~~SUBSEQUENT~~Each ~~EVENTS~~Unit consists of one common share in the capital of the Company at a purchase price of $0.10 per share and one common share purchase warrant exercisable at a strike price of $0.15 per share at any time until March 23, 2014. The 2,250,000 units were issued to four U.S. persons pursuant to Rule 506 of Regulation D and/or Section 4(2).

The Company ~~has~~determined ~~evaluated~~that ~~subsequent~~the ~~events,~~adjustment asfeature ~~defined~~within the warrants require the Company to grant additional warrants to each warrant holder in the case that any future grants by ~~ASC~~the ~~855~~Company have an exercise price below $0.15 constituted a derivative. Using the Monte Carlo Valuation Model, ~~“Subsequent~~the ~~Events~~fair value of the derivative was determined to be $126,”021 ~~through~~at the March 23, 2011 issuance date. ~~that~~At July 31, 2011, the ~~financial~~value ~~statements~~was ~~were~~determined ~~issued~~to be $63,329. The Company’s stock price on July 31, 2011 was $0.04. A risk-free discount rate of 0.46% and volatility of 130% was used to obtain fair value as of July 31, 2011, resulting in the decrease in fair value of $62,692 recorded as other income in the Company’s Condensed Consolidated Statements of Operations for the nine months ended July 31, 2011.

17On July 22, 2011, the Company closed a non-brokered private placement consisting of 2,000,000 units for aggregate gross proceeds of $200,000. Each unit consists of one common share in the capital of the Company at a purchase price of $0.10 per share and one common share purchase warrant exercisable at a strike price of $0.15 per share at any time until July 22, 2014. The 2,000,000 units were issued to one US person pursuant to Rule 506 of Regulation D and/or Section 4(2).

OnThe ~~May~~Company ~~16,~~determined ~~2011,~~that ~~Nexaira, Inc.,~~ the ~~Company’s~~adjustment ~~subsidiary,~~feature ~~entered~~within ~~into~~the awarrants ~~Loan~~require ~~Agreement~~the ~~with~~Company ~~Centurion~~to ~~Credit~~grant ~~Funding~~additional ~~LLC~~warrants ~~(the~~to ~~‘Lender”),~~each ~~pursuant~~warrant toholder ~~which~~in the case ~~Lender~~that ~~provided~~any afuture ~~$300,000~~grants ~~bridge~~by ~~loan (~~the ~~“Bridge~~Company ~~Loan”)~~have ~~and~~an upexercise toprice abelow $20.215 ~~million~~constituted ~~revolving~~a ~~purchase~~derivative. ~~order~~Using ~~financing loan (~~the ~~“Revolving~~Monte ~~Loan”).~~Carlo ~~The~~Valuation ~~maturity~~Model, ~~date for~~ the ~~Bridge~~fair ~~Loan~~value isof ~~October~~the ~~24,~~derivative ~~2011~~was ~~and~~determined ~~the~~to ~~maturity~~be ~~date~~$74,429 ~~for~~at the ~~Revolving~~July ~~Loan~~22, is2011 ~~May~~issuance ~~16, 2012~~date. ~~The~~At ~~Company~~July 31, ~~executed~~2011, the ~~Loan~~value ~~Agreement~~was ~~solely~~determined into ~~connection~~be ~~with~~$58,944. ~~the~~The ~~conversion~~Company’s ~~provisions~~stock ofprice ~~the~~on ~~Loan~~July ~~Agreement~~31, ~~pursuant~~2011 towas ~~which~~$0.04. ~~any~~A ~~obligations~~risk-free ~~(including~~discount ~~any~~rate ~~accrued~~of ~~interest~~0.55% and ~~fees)~~volatility ~~owing~~of ~~under~~130% ~~the~~was ~~Loan~~used ~~Agreement~~to ~~are~~obtain ~~convertible~~fair ~~into~~value ~~shares~~as of ~~the~~July ~~Company’s~~31, ~~common~~2011, ~~stock~~resulting atin anthe ~~conversion~~decrease ~~price~~in fair ~~equal~~value toof ~~seventy~~$15,484 ~~(70)~~recorded ~~percent~~as ofother income in the ~~weighted~~Company’s ~~average~~Condensed ~~sale~~Consolidated ~~price~~Statements ~~per~~of ~~share~~Operations ~~over~~for the ~~thirty~~nine ~~(30)~~months ~~day~~ended ~~period~~July ~~prior~~31, ~~to the conversion date~~2011.

~~Outstanding~~16 advances under the Bridge Loan and the Revolving Loan bear interest at the rate of 36% per annum. Following the occurrence and during the continuance of an event of default advances bear interest at the rate of 46% per annum.

~~The~~Short ~~Revolving~~Term ~~Loan~~Note ~~provides~~Payable for advances for inventory in an amount equal to the initial deposit required by a supplier in connection with the manufacture or supply of inventory (a “Deposit Revolving Advance”). Any outstanding balance of any Deposit Revolving Advance is due and payable on the earlier of receipt of funds from the applicable customer or 120 days after the making of such Deposit Revolving Advance. The Revolving Loan also provides for advances in an amount equal to the remaining amount due to a supplier for inventory manufactured or supplied by such supplier (a “Balance Revolving Advance”). Any outstanding balance of any Balance Revolving Advance shall be due and payable on the earlier of receipt of funds from the applicable customer or 60 days after the making of such Balance Revolving Advance.

~~Maturity~~On ofFebruary 2, 2011, the ~~Bridge~~Company ~~Loan~~entered ~~and~~into ~~the~~short-term ~~Revolving~~promissory ~~Loan~~note ~~may~~agreement bein ~~accelerated~~the ifamount ~~there~~of is$263,075 with an ~~event~~unrelated ~~of default~~party, asfor ~~that~~working ~~term~~capital purposes. The promissory note agreement is due ~~defined~~on indemand ~~the~~and ~~Loan~~bears ~~Agreement~~interest at 12% per annum.

InConvertible ~~connection~~Note ~~with~~Payable ~~the Loan Agreement, the Company and its subsidiaries granted security over all of the Company’s assets and guaranteed repayment of all obligations owing under the Loan Agreement.~~

~~Also~~On inFebruary 25, ~~connection with the Loan Agreement~~2011, ~~the~~a ~~Company~~convertible ~~issued~~note ~~share~~holder ~~purchase~~delivered ~~warrants~~a tonotice ~~the~~of ~~Lender~~conversion towith ~~acquire~~respect up to ~~15 million shares of common stock~~$10,000 ~~4 million~~ of ~~which~~the ~~are~~principal ~~immediately~~amount ~~exercisable and 11 million~~ of ~~which~~a ~~become~~note, ~~exercisable~~dated August 20, ~~as to 1 million per month beginning on June 16~~2010, ~~2011~~in ~~provided that there remains unpaid amounts under~~ the ~~Loan~~principal ~~Agreement.~~amount ~~All warrants become immediately exercisable if there is an event~~ of ~~default~~$400,000 asissued ~~that~~by ~~term~~the iscompany ~~defined~~to in the ~~Loan~~note ~~Agreement~~holder. ~~Upon~~Effective ~~repayment~~February 25, of2011, ~~all obligations under~~ the ~~Loan Agreement~~$10,000, ~~all~~and ~~share~~$518 ~~purchase~~accrued ~~warrants~~interest ~~that~~thereon, ~~have~~were ~~not~~converted ~~yet~~into ~~become~~142,030 ~~exercisable~~common ~~will~~shares ~~expire. All warrants will be exercisable for a period~~ of ~~three years from~~ the ~~date~~Company’s stock ~~that~~at ~~such~~a ~~warrants~~conversion ~~become exercisable. The exercise~~ price isof ~~equal to~~ $0.10074053 ~~subject~~per ~~to adjustment from time to time~~share.

On ~~May 16~~March 22, ~~2010~~2011, the ~~Company~~convertible ~~issued~~note ~~350~~holder delivered a notice of conversion with respect to $20,000 ~~warrants~~of atthe anprincipal ~~exercise~~amount ~~price~~of the note, dated August 20, 2010. Effective March 23, 2011, the $020,000, and $1,172.1560 ~~per~~accrued ~~share~~interest tothereon, ~~Reedland~~were ~~Capital~~converted ~~Partners~~into 289,665 ascommon shares of the Company’s stock at a conversion ~~commission~~price inof ~~connection~~$0.0731 ~~with~~per ~~the~~share. ~~Loan~~See ~~Agreement~~Note 9 – Convertible Note Payable.

OnConversion ~~June 2, 2011, the Board~~ of ~~Directors authorized a non~~Short-~~brokered~~Term ~~private~~Promissory ~~placement~~Note offering of up to US $300,000 to US accredited investors. The Company will enter into US subscription agreements at US $0.10 per unit, each unit compromising one common share and common share purchase warrant exercisable into one common share at the exercise price of US $0.15 at any time within three years from closing date. The offering is expected to close on or before June 30, 2011. Of this offering, the Company has received proceeds of $100,000 for general working capital purposes as at June 14, 2011.Payable

~~ITEM~~On February 25, 2011, the Company entered into a debt settlement and subscription agreement with one investor whereby the Company agreed to issue 2.,500,000 ~~MANAGEMENT~~shares of the Company’Ss ~~DISCUSSION~~common ~~AND~~stock ~~ANALYSIS~~in OFsettlement ~~FINANCIAL~~of ~~CONDITION~~$250,000 ~~AND~~of ~~RESULTS~~a OF$300,000 ~~OPERATIONS~~short-term promissory note payable by us to the investor. The shares were issued at a price of $0.10 per share. On February 25, 2010 the Company issued the investor a note in the principal amount of $77,321with respect to the remaining principal plus interest payable on the debt as of that date.

~~Management’s~~Consulting ~~discussion~~Agreements and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of our operations. The MD&A is organized as follows:

~~Caution~~On ~~concerning~~February 24, ~~forward-looking~~2011, ~~statements.~~the ~~This~~Company ~~section~~entered ~~discusses~~into ~~how~~a ~~forward-looking~~letter agreement ~~statements~~with ~~made~~a byfinancial usadvisor, whereby the advisor agreed to provide certain advisory services to the Company in consideration for the ~~MD&A~~issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10 per share, with the shares to be issued as follows: (a) 450,000 shares upon execution of the letter agreement; and ~~elsewhere~~(b) 150,000 inshares ~~this~~at ~~report~~the ~~are~~end ~~based~~of each month starting on ~~management’s~~the ~~present~~last ~~expectations~~day ~~about~~of ~~future~~the ~~events~~fourth month through the twelfth month of the term of the agreement. Upon mutual agreement, the Company and ~~are~~financial ~~inherently~~advisor ~~susceptible~~agreed to ~~uncertainty~~terminate the letter agreement on July 19, 2011 and ~~changes~~entered ininto ~~circumstances~~a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. These shares were cancelled and returned to treasury on August 12, 2011. See Note 13 – Subsequent Event.

Also, on February 24, 2011, the Company ~~Overview~~entered into a consulting agreement , whereby the consultant has agreed to provide certain consulting services to the Company in consideration for the issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10 ~~This~~per ~~section~~share, ~~provides~~to anbe ~~introductory~~issued ~~overview~~as follows: (a) 450,000 shares upon execution of the consulting agreement; and ~~context~~(b) 150,000 ~~for~~shares at the ~~discussion~~beginning of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. Upon mutual agreement, the Company and ~~analysis~~consultant ~~that~~agreed ~~follows~~to interminate the ~~MD&A~~letter agreement on July 19, 2011 and entered into a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. These shares were cancelled and returned to treasury on August 12, 2011. See Note 13 – Subsequent Event.

On April 18, 2011, the Company entered into a letter agreement with a financial consultant, whereby the consultant agreed to provide certain advisory services to the Company in consideration for a $10,000 monthly retainer and the issuance of 500,000 options to purchase shares of common stock at a price of $0.15 per share, with the shares to vest over 18 months. The fair value of the options earned as of July 31, 2011 was approximately $1,000. The remaining unvested and unearned options will be valued each reporting period in accordance with ASC 505 and recorded in compensation expense.

~~Results~~17 of operations. This section provides an analysis of our results of operations for the three months ended April 30, 2011 and 2010 and the six months ended April 30, 2011 and 2010. A brief description is provided of transactions and events that impact the comparability of the results being analyzed.

~~Outstanding~~Shares ~~Share~~Reserved ~~Data. This section provides the designation and number or principal amount of (a) each class and series of voting or equity securities~~ for ~~which~~Future ~~there~~Issuance are securities outstanding; (b) each class and series of securities for which there are securities outstanding if the securities are convertible into, or exercisable or exchangeable for, voting or equity securities and (c) each class and series of voting or equity securities that are issuable on the conversion, exercise or exchange of outstanding securities.

~~Financial~~The ~~condition~~Company is required to reserve and ~~liquidity.~~keep ~~This~~available ~~section~~of ~~provides~~its authorized, but unissued shares of common stock an ~~analysis~~amount sufficient to effect the conversion of ~~our~~the ~~cash~~outstanding ~~position~~Convertible Note Payable, warrants, plus shares granted and ~~cash~~available ~~flows~~for grant under the Company’s stock option plans, asand ~~well~~shares asdue ain ~~discussion~~connection with consulting agreement. As of ~~our~~July 31, ~~financing~~2011, ~~arrangements~~shares ~~and~~reserved ~~financial~~for ~~commitments.~~future issuance are comprised of the following:

Critical accounting policies. This section discusses those accounting policies that are both considered important to our financial condition and operating results and require significant judgment and estimates on the part of management in their application.


	Shares Reserved
Outstanding stock options under the 2009 Stock Option Plan		9,410,417
Additional shares available under the 2009 Stock Option Plan		5,589,583
Convertible note payable		1,666,666
Convertible promissory note dated July 28, 2011		8,688,525
Warrants issued in connection with convertible note payable		666,666
Warrants issued to related party in connection with debt		2,952,708
Warrants issued in connection with private placements		8,255,849
Warrants issued to vendor in connection with Promissory Note Agreement		1,312,500
Warrants issued in connection with Bridge & Purchase Order Financing		15,350,000

		53,892,914

~~CAUTION~~Stock ~~CONCERNING~~Option ~~FORWARD-LOOKING~~Plan ~~STATEMENTS~~

~~This~~The ~~quarterly~~Company’s ~~report~~2009 onStock ~~Form~~Option ~~10-Q~~Plan ~~contains~~provides ~~forward-looking~~for ~~statements.~~the ~~Forward-looking~~granting ~~statements are projections~~ of ~~events,~~equity ~~revenues~~awards, ~~income,~~including ~~future~~restricted ~~economic~~stock ~~performance~~and orincentive ~~management’s plans~~ and ~~objectives~~nonqualified ~~for~~stock ~~future~~options ~~operations.~~to Inpurchase ~~some~~up ~~cases~~to 15,000,000 ~~you~~shares ~~can~~of ~~identify forward-looking statements by~~ the Company’s ~~use~~common ~~of terminology such as “may”~~stock, ~~“should”,~~to ~~“expect”~~employees, ~~“plan”~~directors, ~~“anticipate”,~~officers ~~“believe”,~~and ~~“estimate”,~~independent ~~“predict”,~~consultants ~~“potential”~~of ~~or “continue” or~~ the ~~negative of these terms or other comparable terminology~~Company. ~~Examples of forward-looking statements made in this quarterly report on Form 10-Q include statements about:~~

~~Our~~A ~~future~~summary ~~strategy~~of ~~discussed~~stock ~~under~~option activity in connection with the ~~heading~~2009 ~~“Nexaira’s~~Stock ~~Business~~Option ~~and~~Plan ~~Outlook”;~~as of July 31, 2011 is as follows:

Our belief that certain vertical sales channels may have an impact on our revenue plan;


	Number Outstanding			Weighted Average Exercise Price
Options outstanding October 31, 2009		8,400,000		$	0.15

Granted		2,450,000		$	0.34
Exercised		(225,000	)	$	0.15
Forfeited		(518,750	)	$	0.15

Options outstanding October 31, 2010		10,106,250		$	0.20

Granted		500,000		$	0.15
Exercised		—			—
Forfeited		(1,195,833	)	$	0.15

Options outstanding July 31, 2011		9,410,417		$	0.20

Options exercisable July 31, 2011		8,289,583		$	0.18

~~Our~~Stock ~~discussion~~based ~~regarding~~compensation ~~any~~expense ~~future~~included ~~filings~~in selling, general and administrative expense for ~~patent~~the ~~protection;~~three and nine months ended July 31, 2011 totalled $49,673 and $149,107, respectively. The amount of unearned stock-based compensation currently estimated to be expensed from now through fiscal 2012 related to unvested share-based payment awards at July 31, 2011 is $39,771.

~~Our~~12. ~~business~~RELATED ~~plan~~PARTY ~~for~~TRANSACTIONS ~~the next twelve months discussed under the heading “Plan of Operations”;~~

~~Our~~On ~~ability~~November 7, 2010, 1,129,034 stock options granted to ~~meet~~a Lender and related party in November 2008 in connection with the Convertible ~~demands~~Loan ~~from~~Agreement ~~our~~expired. ~~growing~~On ~~customer~~January 14, ~~base;~~2011, the Company granted 1,129,034 warrants to purchase 1,129,034 shares of the Company’s common stock at the exercise price of $0.20 per share, expiring on January 15, 2013. The Company recognized the fair value of the change under the Black-Scholes model totaling $81,615 effective December 17, 2010.

~~Our~~On January 14, ~~encouragement~~2011, bythe Board of Directors extended the ~~positive~~expiry ~~trends~~dates ~~established~~of warrants, issued in ~~terms~~August 2009 in connection with the borrowing of ~~our~~funds ~~month~~for ~~over~~working ~~month~~capital ~~unit~~purposes, ~~sales~~from ~~increases;~~January 15, 2011 to January 15, 2013. The funds were provided by 0840386 B.C. Ltd. and/or its nominees, 0793296 B.C. Ltd, and 0885084 Alberta Inc., a company related to the Company’s Chief Executive Officer, Chief Financial Officer, and other third party investors.

~~Our~~18 ~~intention to raise $5 million through equity financing by August 2011; and~~

~~Our~~Through ~~anticipated~~March, ~~cash~~April ~~requirements~~and May 2011, the Chief Executive Officer advanced the Company funds to cover operating expenses. As a July 31, 2011 the unpaid advances totaled $126,573. In addition, the Company uses a credit card provided by the Chief Financial Officer for business purposes. As at July 31, 2011, the ~~next~~balance ~~six~~owing ~~and~~was ~~twelve~~$37,478. ~~months;~~

~~These~~13. SUBSEQUENT ~~statements~~EVENTS ~~are only predictions and involve known and unknown risks, uncertainties and other factors, including:~~

~~General~~The ~~economic~~Company ~~and~~has ~~business~~evaluated ~~conditions;~~subsequent events, as defined by ASC 855, “Subsequent Events,” through the date that the financial statements were issued.

WeOn ~~may~~August 4, ~~not~~2011, the Company closed a Securities Purchase Agreement transaction for proceeds of $53,000. This transaction provides for the issuance of an 8% convertible promissory note in the principal amount of $53,000 and has a maturity date that is nine months from the date of issuance of the Note. At any time on or after the date that is 180 days from the issue date, the principal amount and accrued interest will be ~~able~~convertible tointo ~~obtain~~shares ~~additional~~of ~~financing;~~the Company’s common stock at a variable conversion price. In connection with the possible conversion of the Note the Company reserved 8,688,525 common shares.

WeOn ~~are~~August 9, ~~dependent~~2011, ~~almost~~the ~~exclusively~~convertible onnote ~~outside~~holder ~~capital;~~delivered a notice of conversion with respect to $10,000 of the principal amount of the note, dated August 20, 2010. Effective August 9, 2011, the $10,000, and $950.68 accrued interest thereon, were converted into 388,139 common shares of the Company’s stock at a conversion price of $0.02820 per share. See Note 9 – Convertible Note Payable.

~~Our~~On ~~directors~~February 24, ~~and~~2011, ~~officers~~the ~~have~~Company entered into a letter agreement with a financial advisor, whereby the ~~ability~~advisor agreed to ~~influence~~provide ~~matters~~certain ~~affecting~~advisory ~~our~~services ~~stockholders~~to the Company in consideration for the issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10 per share, with the shares to be issued as follows: (a) 450,000 shares upon execution of the letter agreement; and (b) 150,000 shares at the end of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. Upon mutual agreement, the Company and financial advisor agreed to terminate the letter agreement on July 19, 2011 and entered into a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. The 350,000 shares were cancelled and returned to treasury on August 12, 2011.

~~Our~~On ~~financial~~February 24, ~~results~~2011, ~~are~~the ~~subject~~Company entered into a consulting agreement , whereby the consultant has agreed to ~~fluctuations~~provide certain consulting services to the Company in consideration for the issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10 per share, to be issued as follows: (a) 450,000 shares upon execution of the consulting agreement; and (b) 150,000 shares at the beginning of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. . Upon mutual agreement, the Company and financial advisor agreed to terminate the letter agreement on July 19, 2011 and entered into a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. The 350,000 shares were cancelled and returned to treasury on August 12, 2011

~~Our~~On ~~market~~August 30, ~~share~~2011, ~~revenues~~the convertible note holder delivered a notice of conversion with respect to $10,000 of the principal amount of the note, dated August 20, 2010. Effective September 8, 2011, the $10,000, and ~~gross~~$1,027.40 ~~margin~~accrued ~~may~~interest ~~decrease~~thereon, aswere converted into 689,213 common shares of the Company’s stock at a ~~result~~conversion price of ~~competition~~$0.016 ~~with~~per ~~new~~share. orSee ~~established~~Note ~~wireless~~9 ~~communication~~– ~~companies;~~Convertible Note Payable.

~~Our~~On September 12, ~~acquisition~~2011, ofthe ~~additional~~Company ~~assets~~received ~~and~~$25,000 ~~businesses~~pursuant ~~may~~to ~~have~~a non-brokered private placement with a ~~negative~~US ~~effect~~accredited oninvestor. The ~~our~~Company ~~share~~will ~~price~~enter into US subscription agreements at US $0.10 per unit, each unit compromising one common share and ~~results~~common share purchase warrant exercisable into one common share at the exercise price of ~~operations;~~US $0.15 at any time within three years from closing date. The offering is expected to close on or before September 26, 2011. These proceeds will be used for general working capital purposes.

~~The~~ITEM ~~loss~~2. ofMANAGEMENT’S ~~any~~DISCUSSION ofAND ~~our~~ANALYSIS ~~significant~~OF ~~customers~~FINANCIAL ~~could~~CONDITION ~~adversely~~AND ~~affect~~RESULTS ~~our~~OF ~~revenue and profitability;~~OPERATIONS

WeManagement’s ~~are~~discussion ~~dependent~~and onanalysis aof ~~single~~financial ~~source~~condition ~~supplier~~and ~~for~~results ~~some~~of ~~components,~~operations ~~which~~(“MD&A”) ~~increases~~is provided as a supplement to the ~~risk~~accompanying ~~that~~condensed weconsolidated ~~will~~financial statements beand ~~unable~~footnotes to ~~obtain~~help ~~key~~provide ~~materials~~an ~~required~~understanding ~~for~~of our ~~products;~~financial condition, changes in our financial condition and results of our operations. The MD&A is organized as follows:

We• ~~rely~~Caution onconcerning aforward-looking ~~limited~~statements. ~~number~~This ofsection ~~third~~discusses ~~parties~~how toforward-looking ~~manufacture~~statements ~~our~~made ~~products,~~by ~~which~~us ~~increases~~in the ~~risk~~MD&A ~~that~~and weelsewhere ~~will~~in bethis ~~unable~~report toare ~~obtain~~based ~~our~~on ~~products~~management’s inpresent aexpectations ~~timely~~about ~~manner;~~future events and are inherently susceptible to uncertainty and changes in circumstances.

~~Changing~~• ~~technology~~Company ~~may~~Overview. ~~reduce~~This section provides an introductory overview and context for the ~~value~~discussion ofand ~~our~~analysis ~~intellectual~~that ~~property;~~follows in the MD&A.

We19 ~~may infringe on the intellectual property rights of others;~~

~~Others~~• ~~may~~Results ~~attempt~~of tooperations. ~~copy~~This ~~aspects~~section provides an analysis of our ~~products~~results of operations for the three months ended July 31, 2011 and ~~technology~~2010 ~~without~~and ~~our~~the ~~permission;~~nine months ended July 31, 2011 and 2010. A brief description is provided of transactions and events that impact the comparability of the results being analyzed.

~~Exchange~~• ~~rates~~Outstanding ~~between~~Share ~~the~~Data. ~~United~~This ~~States~~section provides the designation and ~~Canada~~number ~~may~~or ~~affect~~principal ~~our~~amount ~~results~~of (a) each class and series of ~~operations~~voting or equity securities for which there are securities outstanding; (b) each class and series of securities for which there are securities outstanding if the securities are convertible into, or exercisable or exchangeable for, voting or equity securities and (c) each class and series of voting or equity securities that are issuable on the conversion, exercise or exchange of outstanding securities.

We• ~~may~~Financial becondition ~~unable~~and toliquidity. ~~retain~~This section provides an analysis of our ~~key~~cash ~~employees;~~position and cash flows, as well as a discussion of our financing arrangements and financial commitments.

19• Critical accounting policies. This section discusses those accounting policies that are both considered important to our financial condition and operating results and require significant judgment and estimates on the part of management in their application.

~~Government~~CAUTION ~~regulations~~CONCERNING ~~could~~FORWARD-LOOKING ~~increase~~STATEMENTS ~~our cost of doing business;~~

~~Our~~This ~~efforts~~quarterly toreport ~~restructure~~on ~~our~~Form ~~business~~10-Q ~~may~~contains forward-looking bestatements. ~~unsuccessful;~~Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q include statements about:

~~The~~• ~~risks~~Our infuture ~~the~~strategy ~~section~~discussed ofunder ~~this~~the ~~quarterly~~heading ~~report entitled~~ “~~Risk~~Marketing ~~Factors~~Strategy”,

~~any~~• ofOur ~~which~~belief ~~may~~that ~~cause~~certain ~~our~~vertical ~~company’s~~sales orchannels ~~our~~may ~~industry’s~~have ~~actual~~an ~~results,~~impact ~~levels~~on ofour ~~activity,~~revenue ~~performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.~~plan;

~~While~~• ~~these~~Our ~~forward-looking~~discussion ~~statements and any assumptions upon which they are based are made in good faith and reflect our current judgment~~ regarding ~~the direction of our business, actual results will almost always vary, sometimes materially, from~~ any ~~estimates, predictions, projections, assumptions or other~~ future ~~performance~~filings ~~suggested~~for ~~herein.~~patent Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.protection;

~~COMPANY~~• ~~OVERVIEW~~Our business plan for the next twelve months discussed under the heading “Plan of Operations”;

We• ~~develop~~Our ~~and~~ability deliver third and fourth generation (3G/4G) wireless routing solutions that offer speed, reliability and security for carriers, mobile operators, service providers, value added resellers (VARS) and enterprise customers. We believe our routing solutions are simple to ~~install,~~meet ~~yet provide~~ the ~~advanced~~demands ~~management~~from ~~and business class features demanded by the most sophisticated users. We believe~~ our ~~wireless~~growing ~~devices~~customer are ideal for secure high availability wireless applications acting as the primary router on wireless, digital subscriber lines (DSL), or cable networks or can be used to provide complete device and network redundancy in wide area network-failover/fail back applications.base;

~~When~~• ~~our~~Our ~~company~~encouragement ~~was~~by ~~formed in 2005,~~ the ~~key~~positive ~~focus~~trends ~~was~~established toin ~~build~~terms anof ~~organization~~our ~~focused~~month onover ~~wireless~~month ~~data~~unit ~~communications~~sales ~~technology and to develop key supplier and customer relationships.~~increases;

In• ~~2008,~~Our weintention ~~initiated~~to ~~the~~raise ~~development~~between of$2-4 amillion ~~new~~by ~~wireless~~the ~~routing~~end ~~platform~~of ~~and for~~ the ~~first~~calendar ~~time~~year in2011 ~~our~~through ~~history~~equity ~~began writing our own proprietary firmware~~ and ~~software.~~favorable Wedebt ~~retooled our operations and processes to provide compelling 3G/4G wireless routing solutions that we believe are highly competitive in both function and price~~financing.

In• ~~March~~Our ~~2009,~~anticipated wecash announced the availability of our i3 GUI™ (patent pending) graphical user interface for our small office/home office (SOHO) and business class routers. We believe our i3 GUI quickly and effortlessly displays a comprehensive real time view of router status including auto-configuration results of internet wide area network (WAN) connections, which reduces customer support requirements ~~and maintenance costs~~ for ~~service~~the ~~providers,~~next ~~carriers~~six and ~~managed~~twelve ~~virtual network operators.~~months;

~~During~~These ~~our~~statements ~~last~~are ~~fiscal~~only ~~year~~predictions ~~we launched three new products: (i) our Business Class II high availability router (BCII); (ii) our High Availability network Adapter (HANATM);~~ and ~~(iii)~~involve ~~our~~known ~~3G/4G SOHO router. We believe that we have developed a highly robust~~ and ~~secure~~unknown “adaptive wireless technology platform” that incorporates security functionality and management capability historically only found in wireline routing hardware which we believe is unique in the wireless industry. Unlike many of our competitorsrisks, weuncertainties ~~uniquely own~~ and ~~control~~other ~~all aspects of the processor design~~factors, ~~firmware~~including: and software and can consistently and rapidly develop features and functions required by our customers. This not only improves speed to market but enables us to customize our routing software to meet the specific needs of customers in specialized and unique industry verticals such as ATMs, Kiosk and wireless CCTV security cameras.

~~Our~~• ~~development~~General ~~staff~~economic has engineered a family of proprietary wireless 3G/4G routers that we believe will outperform the competition at a lower price while maintaining significant gross margins. In parallel with this product development we believe we have built an experienced management team and ~~Board~~business ~~of Directors. Our sales and operations are headquartered in San Diego and our corporate office is in Vancouver, British Columbia.~~conditions;

~~Nexaira’s~~• ~~Business~~We ~~and~~may ~~Outlook~~not be able to obtain additional financing;

We• believe our product line will enable our customers to expeditiously connect to and manage secure high speed data connections rivaling traditional landline connectivity, with unmatched functionality, speed and ease of use all at a lower cost. Service providers have selected our routing solutions for their high availability WAN failover applications using a 3G or 4G cellular network to automatically “back up” or “stand in” when service from wireline networks is interrupted. As the marketplace continues to deploy our secure high availability wireless applications as primary access points, void of any wireline connection, we believe there is potential revenue and sales growth in this emerging market. Additionally, we believe that carriers and service providers can dramatically decrease their total cost of ownership (TCO), including management of their installed hardware base, by using our advanced firmware which may extend the shelf life of their customer premise equipment while providing critical device updates through simple downloads. We ~~enable~~are ~~our~~dependent ~~customers~~almost toexclusively ~~bring~~on ~~customized~~outside ~~wireless broadband solutions to market more quickly and cost effectively than traditional wireline offerings such as DSL, cable or T-1s.~~capital;

20• Our directors and officers have the ability to influence matters affecting our stockholders;

• Our ~~hardware-agnostic~~financial ~~broadband~~results ~~router~~are ~~firmware~~subject ~~and intuitive user interface enables a non-technical user~~ to ~~quickly and effortlessly setup a network and establish a secure Internet connection.~~fluctuations;

In• ~~addition,~~Our ~~the~~market ~~superior~~share, ~~management~~revenues, ~~tools~~ and ~~reliable~~gross ~~operating~~margin ~~design~~may ~~supports~~decrease ~~the~~as ~~needs~~a result of ~~the~~competition ~~largest~~with ~~customer~~new ~~networks~~or ~~that~~established ~~rival~~wireless ~~existing~~communication ~~wireline deployments but have all the benefits of wireless.~~companies;

~~Future~~• ~~Strategy.~~Our Weacquisition ~~intend~~of ~~to:~~additional assets and businesses may have a negative effect on our share price and results of operations;

~~Continue~~• toThe ~~build~~loss onof ~~our~~any Intellectual Property (IP) by designing and developing leading edge wireless routers including industry leading firmware and software (NexWareTM) Price those solutions aggressively for rapid channel adoption Deliver routing platforms with all the security and management features historically only found on wireline routers Develop and deliver a suite of ~~routing~~our ~~products~~significant ~~through:~~customers ~~Wireline~~could ~~Carriers~~adversely ~~Information~~affect ~~Technology~~our ~~(IT)~~revenue Resellers Wireless Operators Indirect Distribution Channels Strategic Partnerships Distributors Continue to develop expertise in specific vertical markets requiring secure wireless connections including ATM, Kiosk, CCTV, Secure LAN and ~~remote electronic payment applications such as parking meters.~~profitability;

~~Products~~• ~~and~~We ~~Services~~are dependent on a single source supplier for some components, which increases the risk that we will be unable to obtain key materials required for our products;

~~Our~~• ~~highly~~We ~~customizable~~rely ~~and~~on ~~secure~~a ~~routing~~limited ~~solutions~~number ~~are~~of ~~designed~~third parties to ~~aggressively~~manufacture ~~compete against both wireline and other wireless broadband data applications. By developing~~ our ~~own~~products, ~~firmware~~which ~~and~~increases ~~software~~the ~~and~~risk ~~leveraging~~that ~~our deep understanding of wireline and wireless network security protocols~~ we ~~believe~~will webe ~~have~~unable ~~established~~to obtain our ~~company~~products asin a ~~progressive~~timely ~~and innovative organization with the proven management capabilities to execute on an accelerated go-to-market strategy.~~manner;

~~Powerful~~• ~~and~~Changing ~~Secure~~technology ~~Software~~may ~~Tools~~reduce the value of our intellectual property;

~~Iconic~~• ~~images~~We ~~(similar~~may toinfringe ~~the iPhone)~~ on the ~~dashboard~~intellectual toproperty ~~improve~~rights ~~customer confidence, ease~~ of ~~use, retention and use of router tools.~~others;

~~Intuitive~~• ~~structure~~Others ~~with~~may ~~simple~~attempt ~~and logical menu flow~~ to ~~accelerate~~copy ~~customer~~aspects ~~understanding~~ of ~~router~~our ~~functions,~~products ~~minimize apprehension~~ and ~~providing~~technology awithout ~~positive~~our ~~customer and user experience.~~permission;

~~Interactive~~• ~~and~~Exchange ~~automated~~rates ~~set-up~~between ~~wizard that displays auto-configuration results of~~ the 3GUnited orStates ~~4G connection~~ and ~~provides~~Canada ~~responsive~~may ~~functional~~affect ~~tool~~our ~~tips,~~results ~~which~~of ~~minimizes user frustration and reduces product returns.~~operations;

~~The~~• ~~most~~We ~~advanced~~may ~~wireless~~be ~~features~~unable ~~and performance in the industry such as self-provisioning and NexWare's proprietary tuning algorithm which optimizes cellular bandwidth making it easy for end-users~~ to ~~take~~retain ~~advantage~~our ofkey ~~broadband speeds without delays, costs or complexities associated with wireline installs.~~employees;

~~Universal~~20 ~~Plug in Play (UPnP) automatically connects any 3G or 4G data card to any cellular network.~~

~~Enterprise-grade~~• ~~networking~~Government ~~management~~regulations ~~and~~could ~~security~~increase ~~capabilities~~our ~~include~~cost ~~auto-failover~~of todoing ~~a 3G or 4G wireless network to back up the primary wireline network.~~business;

~~Virtual~~• ~~router~~Our ~~redundancy~~efforts ~~protocol~~to ~~(VRRP)~~restructure ~~eliminates~~our ~~single~~business ~~point~~may ofbe ~~failure~~unsuccessful; ~~by providing redundancy for the wireline network~~ and ~~router.~~

21• The risks in the section of this quarterly report entitled “Risk Factors”,

~~Virtual~~any ~~private~~of ~~networks~~which ~~(VPN)~~may ~~with~~cause ~~internet~~our ~~protocol~~company’s ~~security~~or ~~(IPsec)~~our ~~pass-through~~industry’s ~~and~~actual ~~termination~~results, ~~protocols~~levels ~~provide~~of ~~business~~activity, ~~class~~performance ~~security~~or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

WiWhile these forward-Filooking ~~802.11n~~statements ~~2x2~~and ~~MIMO;~~any ~~statefull~~assumptions ~~packet~~upon ~~firewall~~which ~~technology;~~they ~~QOS~~are ~~(Quality~~based ofare ~~service)~~made ~~for~~in good faith and reflect our current judgment regarding the direction of our business, ~~applications~~actual asresults ~~well~~will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as ~~support~~required ~~for~~by ~~General~~applicable ~~Routing~~law, ~~Encapsulation~~including ~~(GRE)~~the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

~~Wi-Fi~~COMPANY ~~scheduling~~OVERVIEW ~~and quality of service (QOS) provides the ability to segregate critical applications to ensure service quality.~~

~~BCII~~We develop and deliver third and fourth generation (3G/4G) wireless routing solutions that offer speed, reliability and security for electronic transaction processing, smart energy management, business continuity, asset tracking and security and surveillance installations. Our routing solutions are simple to install, yet provide advanced management and business class features needed for stringent and sophisticated installations. Our wireless devices are ideal for secure high availability wireless applications acting as the primary router on wireless, digital subscriber lines (DSL), or cable networks and can be used to provide complete device and network redundancy when wireline services are disrupted.

~~The~~Our ~~BCII~~company ~~includes~~was ~~security~~formed ~~and~~in ~~network~~2005 ~~protocols~~as ~~for~~a ~~business~~value ~~customers~~added ~~who~~wireless ~~want~~data todevice ~~leverage~~supplier ~~the~~and ~~high~~helped ~~availability~~us ~~aspects~~develop ofconsiderable depth in the ~~cellular~~wireless ~~networks~~industry. ~~for~~In ~~failover~~2008, ~~primary~~we ~~access~~initiated orthe ~~remote/mobile~~development ~~locations~~of ~~but~~a ~~with~~new ~~the~~wireless routing ~~business~~platform ~~class~~and ~~features~~began ~~traditionally~~writing ~~found~~our ~~only~~own onproprietary ~~wireline~~firmware and software as we saw shortcomings in the flexibility and customization of commercially available products at the time. ~~The~~Our ~~BCII~~mandate ~~extends~~was ~~enterprise~~to orprovide ~~corporate~~compelling ~~networks~~3G/4G ~~over~~wireless ~~cellular~~routing solutions ~~broadband~~that aswere ~~well~~highly ascompetitive ~~supports~~in ~~traditional~~both ~~DSL,~~function ~~cable~~and price, ~~T-1~~but orwere ~~Ethernet,~~capable ~~providing~~of ~~automatic~~remote ~~failover~~management with ~~anti-flap~~the ~~and~~ability ~~VRRP~~ to ~~ensure~~refresh ~~network~~the ~~stability.~~firmware ~~The~~and ~~BCII~~software ~~supports~~on ~~VPNs~~any ~~with~~of ~~IPSec~~the ~~termination~~access ~~allowing~~points uponce todeployed ~~five~~in ~~simultaneous~~the ~~encrypted sessions~~field.

~~With~~In ~~the~~March deployment of the new 3G+ and 4G networks and NexWareTM secure business class capabilities customers with remote locations can use these new high speed cellular networks as their primary network connection2009, ~~saving~~we ~~both~~announced ~~time~~the ~~and~~availability ~~money.~~of ~~The~~our ~~BCII~~I3 ~~connects~~GUI™ ~~seamlessly with HSPA and HSPA + networks from AT&T, Bell and Rogers and Telus as well as 4G networks including Sprint and Clear’s WiMax and Verizon’s 4G LTE~~ (~~Long~~patent ~~Term Evolution~~pending). ~~The~~graphical ~~BCII~~user with XtremeSpeed™ technology optimizes the network connection to the Internet and corporate networks to maximize speed and throughput for business applications such as corporate email, interactive sessions and web accessinterface. The ~~ability~~i3 toGUI ~~interface~~quickly ~~to both high speed 3G~~ and 4Geffortlessly ~~networks~~displays a ~~allows~~comprehensive ~~businesses~~real totime ~~use~~view ~~bandwidth~~of ~~intensive~~router ~~applications such as video conferencing~~status, ~~video~~which ~~surveillance~~helps ~~and~~reduce ~~voice~~customer ~~over~~support IPrequirements ~~(VoIP) all with advanced security, speed~~ and ~~business~~maintenance ~~class~~costs. ~~functionality~~

~~HANA™~~In the last twelve months we launched three new products: (i) our Business Class II high availability router (BCII); (ii) our High Availability network Adapter (HANATM); and (iii) our 2400 series M2M (machine to machine) platform. This highly robust and secure architecture incorporates security functionality and management capability historically only found in wireline routing hardware. Unlike many of our competitors, we own and control all aspects of the processor design, firmware and software and can rapidly develop features and functions necessary to meet our customer’s needs. This not only improves speed to market but enables us to customize our routing software for industry verticals such as electronic transaction processing, smart energy management, business continuity, asset tracking and security and surveillance installations.

~~HANA~~We ~~(High~~believe ~~Availability~~our ~~Network~~product ~~Adapter)~~line ~~provides~~will enable our customers ~~with~~to ~~access~~expeditiously connect to ~~the~~and ~~convenience~~manage ~~and~~secure high speed ofdata ~~the~~connections ~~new~~rivaling ~~high~~traditional landline connectivity, with unmatched functionality, speed ~~cellular~~and ~~networks~~ease ~~for~~of ~~both~~use; ~~existing~~all ~~and~~at ~~new~~a ~~business~~lower ~~locations~~cost. ~~HANA~~Our ~~uniquely~~customers ~~bundles~~have ~~all~~selected ~~essential~~our ~~performance~~routing ~~based~~solutions ~~cellular~~for ~~components~~their ~~including~~high aavailability ~~directional~~WAN ~~antenna~~failover ~~with~~applications ~~10dbi~~using ~~high~~a ~~gain~~3G ~~(10x)~~or ~~for~~4G ~~equipment~~cellular ~~rooms~~network to automatically “back up” or ~~noisy~~“stand ~~environments,~~in” anwhen ~~auto~~service ~~configurable~~from ~~network~~wireline ~~connection~~networks ~~manager~~is interrupted. As the marketplace continues to deploy our secure high availability wireless applications, ~~and~~we ~~optional~~believe ~~3G/4G~~there oris ~~dual~~potential ~~mode~~revenue ~~modem~~and ~~for~~sales growth ~~EVDO~~to ~~RevA~~be realized. Additionally, ~~HSPA~~we believe our customers can dramatically decrease their total cost of ownership (TCO), ~~HSPA+~~including management of their installed hardware base, ~~WiMAX~~by orusing ~~LTE~~our ~~networks~~advanced firmware which can extend the shelf life of the customer premise equipment while providing critical device updates through simple downloads. ~~All~~We ~~HANA~~enable ~~products~~our ~~come~~customers into abring ~~ruggedized~~customized ~~tamperproof~~wireless ~~enclosure~~broadband solutions to market more quickly and ~~are~~cost ~~also~~effectively ~~available~~than ~~with~~traditional ~~NEMA~~wireline ~~certification~~offerings such as DSL, cable or T-1s.

~~HANA~~Our ~~provides immediate access to any cellular~~ network ~~for~~agnostic ~~complete~~broadband ~~diversity~~routers toand ~~wired~~intuitive ~~network~~user ~~infrastructure;~~interface ~~industry~~enables ~~standard~~a ~~VPN~~non-technical ~~IPSec~~user to ~~ensure~~quickly ~~data~~and effortlessly ~~security;~~setup IPa ~~address~~network ~~pass~~and ~~through~~establish toa ~~wireline~~secure ~~router;~~Internet ~~router hardware redundancy via VRRP (Virtual Redundancy Routing Protocol); XtremeSpeed WAN optimization ensuring the fastest wireless~~ connection~~; Wi-Fi 802~~.~~11n~~ ~~2x2 MIMO; statefull packet firewall technology; QOS (Quality of service) for business applications as well as support for General Routing Encapsulation (GRE).~~

~~HANA~~In ~~has~~addition, the ~~ability~~superior tonetwork ~~increase~~management ~~cellular~~capability ~~coverage~~and ~~from~~reliable operating ITdesign ~~closets~~support bythe ~~being~~needs ~~placed~~of inthe anlargest ~~optimum~~customer ~~position~~networks ~~for~~and ~~signal~~easily ~~strength~~rival ~~anywhere~~existing onwireline ~~the~~deployments ~~local~~but ~~area~~have ~~network~~all ~~(LAN)~~the ~~using~~benefits ~~power~~of ~~over~~wireless. ~~the~~Our ~~Ethernet~~proprietary ~~(POE).~~wireless Inrouting ~~addition~~solutions, ~~HANA~~in ~~provides~~our ain ~~secure~~house ~~and~~tests, ~~robust~~outperform ~~wireless~~the ~~connection~~competition at ~~acting as~~ a ~~primary~~lower ~~network~~price ~~connection~~while ~~for~~maintaining ~~companies~~significant ~~with~~gross ~~rural locations where wireline access is either unavailable or cost prohibitive, or where wireless signal strength is sub optimal~~margins.

~~SOHO~~21

~~The~~Today, ~~new~~our ~~3G/4G~~solutions ~~SOHO~~are ~~(Small~~being ~~Office~~used ~~Home Office) router is designed~~ for ~~the~~digital ~~small~~signage, ~~office~~ATM/~~home~~Kiosk ~~office market~~installations, ~~the~~Video ~~mobile~~Surveillance ~~worker~~ and Fleet/Asset ~~the~~Management ~~road~~applications ~~warrior.~~in ItNorth ~~provides~~America. ~~instant~~We ~~and~~are ~~secure~~also ~~Wi-Fi~~seeing ~~service~~interest tofrom ~~a home or office without~~ the ~~need~~rapidly togrowing ~~run~~Smart ~~data~~Grid ~~cabling or subscribe to a wireline service~~sector.

~~The~~In ~~SOHO offers automated set-up~~ parallel with ~~the~~this i3product ~~GUI,~~development ~~multiple~~we ~~user~~have ~~access~~recruited toan ~~the~~experienced ~~Internet;~~management ~~300~~team ~~mbps speeds with 802.11n 2x2 MIMO Wi-Fi service;~~ and aBoard ~~faster~~of ~~3G/4G connection than using a data card on a laptop computer~~Directors. ~~The~~Our ~~SOHO~~sales ~~connects seamlessly with HSPA~~ and ~~HSPA~~operations +are ~~networks~~headquartered ~~from~~in ~~AT&T,~~San ~~Bell~~Diego and ~~Rogers~~our ~~and~~corporate ~~Telus~~office as well as 4G networks including Sprint and Clear’s WiMax and Verizon’s 4G LTE (Long Term Evolution). As a result, we believe that users will no longer be subjected to the long installation times, service area coverage or repair time related to traditional wireline networks. Nexaira’s SOHO router is ~~easy~~in ~~to install and does not require technical support. We believe that the NexConnect® SOHO router is ideal for users that want ease of use~~Vancouver, ~~security~~British ~~and auto-connect capability without the difficulty typically associated with installing a wireline router~~Columbia.

22Our company is producing revenue and winning new customers each month. We expect router related sales in fiscal 2011 to triple over 2010. Approximately $9 million in equity and debt has been raised to date and management believes an additional $2 million of capital will be required by the end of our fiscal year ending October 31, 2011 to retire debt and provide the necessary working capital to achieve profitability on a monthly basis.

~~Any~~Marketing ofStrategy our routers when connected to a WiMAX network will produce throughput speeds 200% - 500% faster than EVDO revA networks, depending on location. When connected to Verizon’s LTE network, throughput speeds can improve tenfold. Additionally we believe that when combined with the speed to market advantage of wireless and the ability to reduce the total cost of ownership – more carrier, service providers and enterprises will be going wireless.

We ~~have~~intend spent approximately $2,775,000 over the last two years on research and development activities of which $1,059,869 has been capitalized as software development costs in accordance with ASC 985-20, Accounting for the Costs of Computer Software to: be Sold, Leased, or Otherwise Marketed. Software development costs are capitalized when technological feasibility and marketability of the related product has been established. Capitalized software costs are amortized on a product-by-product basis, beginning when the product is available for general release to customers.

~~Marketing~~• Continue to build on our Intellectual Property (IP) by designing and ~~Sales~~developing ~~Activities~~leading edge wireless routing solutions, including industry leading firmware and software (NexWareTM)

We• ~~are~~Price ~~seeing~~those ~~opportunities~~solutions ~~developing~~aggressively infor ~~multiple~~rapid ~~verticals~~channel ~~across many market segments. Some select verticals listed below are where we are focusing our sales and marketing efforts and we believe that based on early~~ adoption of our products that any one of these verticals could contribute significantly to our revenue plan, if not all. Sales activities are currently underway in each of the following segments, which we believe validates our strategy:

~~Business~~• ~~Applications~~Deliver routing platforms with all the security and management features historically only found on wireline routers

~~Business~~• ~~Continuity~~Develop ~~– Existing wireline network customers of Tier One~~ and ~~Tier~~deliver ~~Two carriers want~~ a 3Gsuite orof 4G routing ~~solution~~products that ensures their services are not interrupted in the event of a device failure or failure of the wireline network which is a common occurrence today. In most cases alternative broadband services are not available and if so rarely in a diverse route. Wireless broadband provides a completely diverse route matching or exceeding wireline bandwidth throughput. Our software, NexWare, provides business class reliability based on industry standard protocols and processes used for years in sophisticated wireline networking equipment. NexWare’s use of these protocols allows it to work with existing wireline equipment to provide network availability previously only supported by routers many times its price. We are actively engaged with multiple managed service and value added service providers developing secure high availability and business continuity services no longer able to be met with expensive and antiquated dial backup solutions.through:

• Wireline Replacement - We believe we can compete with traditional landline routing products and wireline services by offering higher function and lower cost than what service providers have available to choose from today. With the advent of 4G LTE from companies like Verizon we have realistically seen download speeds up to 22mbps with upload speeds up to 10 mbps, up to ten times faster than existing DSL services.Carriers

~~Small~~• ~~Medium~~Information ~~Sized~~Technology ~~Enterprises~~ (~~SMEs~~IT) – With over 27 million SMEs in the US alone, this vertical is made up of quick service retail (QSR) and small businesses needing quick and simple installations and reliability offered by the combination of Nexaira routing solutions and high speed wireless networks. Small business owners may have neither the time nor the patience to wait for scheduled installation, which traditionally could take several weeks. In addition, we believe the reduced cost and improved performance of HSPA and HSPA+ WiMAX and LTE networks will offer this segment a compelling alternative to wireline.Resellers

~~Emerging~~• ~~and~~Wireless Developing Markets – Emerging markets in Brazil, Russia, India, and China, Latin America, Mid Eastern and African countries are growing faster than in developed countries and have taken the approach that wireline solutions are no longer the optimal, cost effective or timely choice. Management believes many countries will, if they have not already, stop building copper or even fibre networks in metropolitan areas, instead electing to use wireless networks for their Internet and data access needs.Operators

~~SOHO~~• ~~(Small~~Indirect ~~Office~~Distribution ~~Home Office)~~Channels

~~With~~• ~~millions~~Strategic working from home or on the road in hotel rooms, often in small teams of people, data cards with a one to one relationship to the wireless carrier are cumbersome and ineffective. The SOHO user, when he or she combines a data card from any carrier in the country, can benefit from improved security and throughput speed at a lower price. One data card can serve the needs of many when connected with our router and it is more secure than a hotel lobby or coffee shop and one does not have to pay the often exorbident hotel rates for WiFi Internet access. US Government employees are strongly discouraged from connecting to their corporate email from unsecured WiFi hotspots. With the SOHO, we believe that they need not be concerned.Partnerships

23• Distributors

~~Speciality~~• ~~Verticals~~Continue to develop expertise in specific vertical markets requiring secure wireless connections including ATM, Kiosk, CCTV, Secure LAN and ~~M2M~~remote electronic payment applications such as parking meters.

~~Many~~• ~~installations~~To ~~currently~~generate ~~exist~~monthly ~~that~~recurring ~~can take advantage of wireless networks connected using a Nexaira router~~revenue, especially those applications that are difficult to reach with a wireline connection. One example is video survellence. Demand is ever increasing for CCTV cameras to be “networked” to allow for future viewing, but many installations cannot be reached with wireline connections or would be cost prohibitive even if they were. The market is also moving away from ~~existing analog (dial-up) connections to IP Video connections using~~ the ~~Internet.~~sale According to IPMarketVideo.info IP video surveillance product sales will increase by 200% between 2010 and 2012, significantly disrupting and overtaking analog CCTV sales. Britain by all accounts has just 1% of ~~the~~our ~~world’s~~Network ~~population~~Management ~~but~~Services ~~accounts for over 20% of CCTV sales with an install base of more than 4~~(NMS).2 ~~million~~. Another area where Nexaira routers are built directly into the device is ATMs. With over 500,000 ATM’s in North America alone, and an industry motivated to find a better solution because of the high cost and poor reliability of analog circuits or GPRS 2G radio signals, we believe a significant opportunity exists to migrate these existing devices to secure high speed wireless connections using Nexaira routers. We have developed a specific solution to replace the function of the dial-up modem and analog circuit, without changing any of the other components in the ATM itself, while proving a faster more secure and more reliable wireless connections – at lower cost.

~~Competition~~Products and Services

~~Current~~Our ~~industry~~highly customizable ~~research~~and ~~indicates~~secure ~~that~~routing solutions are designed to aggressively compete against both wireline and other wireless broadband data ~~service~~applications. ~~providers~~By ~~have~~developing ~~reached~~our aown ~~cost~~firmware and software and leveraging our deep understanding of ~~service~~wireline ~~inflection~~and wireless ~~point~~network security protocols we believe we have established our company as a progressive and innovative organization with ~~wireline~~the ~~data~~proven ~~service~~management ~~providers~~capabilities to execute on an accelerated go-to-market strategy.

~~The~~In ~~competition~~addition isto ~~divided~~selling ~~into~~our ~~two~~many ~~distinct~~classes ~~categories:~~of routers, we have also developed a Network Management Services offering to allow our customers to monitor and manage all devices in their network whether provided by our company or others.

		Legacy wireline providers who:
			treat wireless as a consumer routing application;
			use Cisco and Juniper type devices that can cost in excess of $1,000 per unit; and
			have limited cellular modem support or controlled modem distribution and pricing.
		Wireless device manufacturers targeting consumers that do not provide business class solutions including:
			reliability and high availability protocols;
			security and access protocols; and
			remote management.

Powerful and Secure Software Tools

~~Intellectual~~• ~~Property~~Iconic images (similar to the iPhone) on the dashboard to improve customer confidence, ease of use, retention and use of router tools.

We• ~~have~~Intuitive ~~filed~~structure ~~trademark~~with ~~applications~~simple and ~~secured~~logical ~~trademark~~menu ~~registrations~~flow into ~~the~~accelerate ~~United~~customer ~~States~~understanding ~~and~~of ~~Canada~~router ~~for~~functions, ~~various~~minimize ~~aspects~~apprehension ofand ~~our~~providing ~~product~~a ~~portfolio,~~positive ~~including:~~customer and user experience.

~~NexWareTM~~• ~~for~~Interactive ~~use~~and inautomated ~~association~~set-up ~~with~~wizard ~~our computer firmware~~ that ~~provides~~displays auto-configuration ~~for~~results ~~cellular~~of ~~wireless~~the ~~devices~~3G ~~including~~or ~~routers~~4G connection and provides responsive functional tool tips, ~~modules~~which minimizes user frustration and ~~modems;~~reduces product returns.

~~NexWaveTM~~• ~~for~~The ~~use~~most advanced wireless features and performance in ~~association~~the ~~with~~industry ~~our~~such ~~high~~as ~~gain~~self-provisioning and NexWare’s proprietary tuning algorithm which optimizes cellular ~~antenna~~bandwidth ~~product;~~making it easy for end-users to take advantage of broadband speeds without delays, costs or complexities associated with wireline installs.

~~NexConnect®~~• ~~for~~Universal ~~use~~Plug in ~~association~~Play ~~with~~(UPnP) ~~our~~automatically ~~family~~connects ofany ~~computer~~3G ~~networking~~or ~~hardware~~4G ~~products;~~data card to any cellular network.

~~XtremeSpeed®~~22 for use in association with communication software and NexWareTM wireless algorithm optimization; i3 GUITM our NexWareTM Iconic Graphical User Interface, for use in association with communication software for providing Internet access;

~~HANATM~~• ~~for~~Enterprise-grade ~~use~~networking inmanagement ~~association~~and ~~with~~security ~~our~~capabilities ~~family~~include ofauto-failover ~~high~~to ~~availability~~a 3G or 4G wireless network ~~adapters;~~to back up the primary wireline network.

~~NEXAIRA®;~~• Virtual router redundancy protocol (VRRP) eliminates single point of failure by providing redundancy for the wireline network and router.

~~Nexaira~~• ~~Wireless™~~Virtual private networks (VPN) with internet protocol security (IPsec) pass-through and termination protocols provide business class security.

We• ~~have~~Wi-Fi ~~patents~~802.11n ~~pending~~2x2 ~~related~~MIMO; tostatefull ~~our~~packet i3firewall ~~GUI™~~ technology,; ~~and~~QOS ~~are~~(Quality inof ~~the~~service) ~~process~~for ofbusiness ~~evaluating~~applications ~~the~~as ~~efficacy~~well ofas ~~filing~~support for ~~patent~~General ~~protection~~Routing onEncapsulation ~~other intellectual property~~(GRE).

24• Wi-Fi scheduling and quality of service (QOS) provides the ability to segregate critical applications to ensure service quality.

~~Employees~~BCII

~~Our~~The ~~operations~~BCII ~~are~~includes ~~headquartered~~security inand ~~San~~network ~~Diego,~~protocols ~~California~~for ~~and~~business ~~our~~customers ~~corporate~~who ~~office~~want isto inleverage ~~Vancouver~~the high availability aspects of the cellular networks for failover, ~~British~~primary ~~Columbia~~access or remote/mobile locations but with the business class features traditionally found only on wireline products. WeThe ~~have~~BCII ~~twenty~~extends enterprise or corporate networks over cellular broadband as well as supports traditional DSL, cable, T-~~two~~1 ~~employees~~or Ethernet, ~~including~~providing ~~consultants~~automatic failover with anti-flap and VRRP to ensure network stability. The BCII supports VPNs with IPSec termination allowing up to five simultaneous encrypted sessions.

~~Corporate~~With ~~History~~the deployment of the new 3G+ and 4G networks and NexWareTM secure business class capabilities customers with remote locations can use these new high speed cellular networks as their primary network connection, saving both time and money. The BCII connects seamlessly with HSPA and HSPA + networks from AT&T, Bell and Rogers and Telus as well as 4G networks including Sprint and Clear’s WiMax and Verizon’s 4G LTE (Long Term Evolution). The BCII with XtremeSpeed™ technology optimizes the network connection to the Internet and corporate networks to maximize speed and throughput for business applications. The ability to interface to both high speed 3G and 4G networks allows businesses to use bandwidth intensive applications such as video conferencing, video surveillance and voice over IP (VoIP) all with advanced security, speed and business class functionality.

WeHANA™ were incorporated in the State of Nevada on March 19, 2007 under the name of Technology Publishing, Inc. On June 1, 2007, we entered into a share purchase agreement whereby we acquired all of the issued and outstanding shares of Westside Publishing Ltd. We divested Westside Publishing Ltd. effective October 28, 2009 as consideration for the cancellation of 40.8 million shares of our restricted common stock. Also on October 30, 2009, 20 million restricted common shares held by a former officer and director, were surrendered for cancellation under a return to treasury order.

OnHANA ~~September~~(High Availability ~~29,~~Network ~~2009,~~Adapter) weprovides ~~completed~~our customers with access to the ~~acquisition~~convenience and speed of ~~Nexaira~~the ~~Wireless~~new ~~(BC)~~high ~~Ltd.~~speed ~~(“Nexaira~~cellular ~~BC”),~~networks ~~its~~for ~~California~~both ~~subsidiary~~existing and ~~its~~new ~~security~~business ~~holders,~~locations. ~~whereby~~HANA weuniquely ~~agreed~~bundles toall ~~acquire~~essential ~~all~~performance ofbased ~~the~~cellular components ~~issued~~including ~~and~~a ~~outstanding~~directional ~~common~~antenna ~~shares~~with in10dbi ~~the~~high ~~capital~~gain of(10x) for ~~Nexaira~~equipment BCrooms inor ~~consideration~~noisy ~~for~~environments, ~~the~~an ~~issuance~~auto ofconfigurable 15network connection manager,~~489,262~~ ~~restricted~~and ~~common~~optional ~~shares~~3G/4G onor ~~the~~dual ~~basis~~mode ofmodem 1for EVDO RevA, HSPA, HSPA+, WiMAX or LTE networks.75 ~~shares~~All ofHANA ~~our~~products ~~common~~come ~~stock~~in ~~for~~a ~~every~~ruggedized ~~one~~tamperproof ~~Nexaira~~enclosure BCand ~~share~~are also available with NEMA certification.

~~Effective~~HANA ~~October~~provides immediate ~~26,~~access ~~2009,~~to weany ~~completed~~cellular anetwork ~~merger~~for ~~with~~complete ~~our~~diversity ~~subsidiary,~~to ~~Nexaira~~wired ~~Wireless~~network ~~Inc.,~~infrastructure; aindustry ~~Nevada~~standard ~~corporation~~VPN ~~which~~IPSec ~~was incorporated solely~~ to ~~effect~~ensure adata ~~change~~security; inIP ~~our~~pass ~~name~~through to ~~better~~wireline ~~reflect~~router; ~~the~~router ~~nature~~hardware ofredundancy ~~our~~via ~~business.~~VRRP As(Virtual aRedundancy ~~result,~~Routing Protocol); weXtremeSpeed ~~changed~~WAN ~~our~~optimization ~~name~~ensuring ~~from~~the ~~“Technology~~fastest ~~Publishing,~~wireless ~~Inc.”~~connection; toWi-Fi ~~“Nexaira Wireless Inc~~802.”11n ~~The~~2x2 ~~name~~MIMO; ~~change~~statefull ~~became~~packet ~~effective~~firewall ~~with~~technology; ~~the~~QOS ~~Over-the-Counter~~(Quality ~~Bulletin~~of ~~Board~~service) ~~at the opening~~ for ~~trading~~business onapplications ~~November~~as 2,well ~~2009~~as ~~under~~support ~~the~~for ~~new~~General ~~stock~~Routing ~~symbol “NXWI”~~Encapsulation (GRE).

WeHANA ~~believe~~has ~~our~~the ~~wireless~~ability ~~devices~~to ~~are~~increase ~~ideal~~cellular ~~for~~coverage ~~secure~~from ~~high~~IT ~~availability~~closets ~~wireless~~by ~~applications~~being ~~acting~~placed asin ~~the~~an ~~primary~~optimum ~~router~~position for signal strength anywhere on ~~wireless~~the orlocal ~~wireline~~area ~~networks~~network or(LAN) ~~they~~using ~~can~~power beover ~~used~~the toEthernet ~~provide~~(POE). ~~complete~~In ~~device~~addition, HANA provides a secure and robust wireless connection acting as a primary network ~~redundancy~~connection infor ~~failover/fail~~companies ~~back~~with ~~applications~~rural ~~and~~locations ~~when~~where ~~connecting~~wireline ~~remote~~access ~~M2M~~is ~~devices~~either unavailable ~~such~~or ascost ~~ATMs~~prohibitive, ~~and~~or ~~CCTV~~where ~~cameras~~wireless signal strength is sub optimal.

~~Plan~~23 ~~of Operations~~

AsSOHO highlighted in our October 31, 2010 annual audited consolidated financial statements, 2009 and 2010 was a period of significant change for us. Shifting from being a reseller of data cards for the wireless industry, in May 2010 we launched our first proprietary wireless routers that interface easily with the 3G and 4G wireless networks of Verizon, Sprint and AT&T as well as HSPA+ networks of Bell, Rogers and Telus. We re-aligned our operations as we exited from marginally profitable product lines and focused on developing our procurement and supply systems to support sales growth of our new products. During this time we were successful in raising enough working capital from investors to sustain operations and position us for growth in our emerging business. With a focus on designing, developing and distributing our own products – specifically wireless routing solutions which include firmware and software developed in house - we began selling our products in June of 2010. After months of testing, field trials, customer driven enhancements and modifications, we believe that we not only understand the customer requirements and the market verticals but have better control on the business and the challenges facing it. Being less dependent on the commodity based distribution business, we have now commercialized our proprietary routing solutions in an attempt to increase and broaden our revenue streams and gross margins. Our planned revenue growth and return to profitability is expected to come as a result of (1) the introduction of our innovative wireless router products and solutions (2) marketing and sales of our suite of products catering to the growing 3G/4G wireless business segment (3) expansion of our sales and operations team focused on the wireless marketplace and (4) the capability of securing a continuous stream of router hardware components to meet current and future sales demand. This, of course, is dependent on our ability to attract and raise new growth and working capital.

~~Over~~The ~~the~~new ~~next~~3G/4G ~~twelve~~SOHO ~~months,~~(Small asOffice ~~part~~Home ofOffice) ~~our~~router ~~overall~~is ~~business~~designed ~~strategy~~for ~~and~~the ~~success~~small inoffice/home ~~raising~~office ~~capital to fund our growth plans~~market, wethe ~~intend~~mobile toworker ~~continue~~and tothe ~~develop~~road ~~new~~warrior. ~~markets,~~It ~~add~~provides ~~new~~instant ~~customers,~~and ~~strengthen~~secure ~~our~~Wi-Fi ~~business~~service ~~relationships with strategic vendors and continue~~ to bea ~~innovative~~home inor office ~~developing~~without ~~software~~the ~~and~~need ~~firmware~~ to ~~meet~~run ~~our~~data ~~customers’~~cabling ~~needs.~~or Wesubscribe ~~also intend~~ to ~~continue~~a ~~to strengthen our management by attracting seasoned executives with sales, marketing, finance and technical expertise from the wireless and~~ wireline ~~industries~~service.

~~Our~~The goSOHO offers automated set-up with the i3 GUI, multiple user access to the Internet; 300 mbps speeds with 802.11n 2x2 MIMO Wi-~~market~~Fi ~~strategy~~service; ~~will~~and ~~focus~~a faster 3G/4G connection than using a data card on a laptop computer. The SOHO connects seamlessly with HSPA and HSPA + networks from AT&T, Bell and Rogers and Telus as well as 4G networks including Sprint and Clear’s WiMax and Verizon’s 4G LTE (Long Term Evolution). As a result, we believe that users will no longer be subjected to the ~~following~~long ~~key~~installation ~~areas:~~times, service area coverage or repair time related to traditional wireline networks. Our SOHO router is easy to install and does not require technical support. We believe that the NexConnect® SOHO router is ideal for users that want ease of use, security and auto-connect capability without the difficulty typically associated with installing a wireline router.

~~Working~~Marketing ~~with~~and ~~wireless~~Sales ~~carriers~~Activities ~~to package WAN failover solutions to merchants experiencing service interruptions associated with wireline network failure.~~

25We are seeing opportunities developing in multiple verticals across many market segments. Some select verticals listed below are where we are focusing our sales and marketing efforts and we believe that based on early adoption of our products that any one of these verticals could contribute significantly to our revenue plan, if not all. Sales activities are currently underway in each of the following segments:

~~Continuing~~Business toApplications ~~build wireline and wireless carrier relationships with the goal of expanding relationships to approximately 300 carriers worldwide in five years.~~

~~Continuing~~Business toContinuity ~~identify~~– Existing wireline network customers of Tier One and ~~respond~~Tier toTwo ~~our~~carriers ~~customers~~want a wireless back-up solution that ensures their services are not interrupted in the event of a device failure or failure of the wireline network which is a common occurrence today. In most cases alternative broadband services are not available and if so rarely in a diverse route. Wireless broadband provides a completely diverse route matching or exceeding wireline bandwidth throughput. Our software, NexWare, provides business class reliability based on industry standard protocols and processes used for years in sophisticated wireline networking equipment. NexWare’s ~~needs~~use of these protocols allows it to work with existing wireline equipment to provide network availability previously only supported by ~~introducing~~routers ~~new~~many ~~product~~times ~~designs~~its price. We are actively engaged with multiple managed service and ~~solutions~~value ~~for~~added 3Gservice providers developing secure high availability and 4Gbusiness ~~next~~continuity ~~generation~~services ~~networks,~~no longer able to be met with expensive and antiquated dial backup solutions.

~~Engaging~~Wireline inReplacement ~~business~~– ~~discussions~~We ~~with~~believe ~~strategic~~we ~~partners~~can incompete ~~emerging~~with ~~nations~~traditional ~~where~~landline routing products and wireline ~~infrastructure~~services isby ~~not~~offering higher function and lower cost than what service providers have available to choose from today. With the advent of 4G LTE from companies like Verizon we have realistically seen download speeds up to 22mbps with upload speeds up to 10 mbps, up to ten times faster than existing DSL services. It is our belief that businesses will continue to adopt wireless networking solutions to help run their business.

~~Establishing~~Small Medium Sized Enterprises (SMEs) – With over 27 million SMEs in the US alone, this vertical is made up of quick service retail (QSR) and ~~developing~~small ~~relationships~~businesses ~~with~~needing ~~manufacturers~~quick and simple installations and reliability offered by the combination of Nexaira routing solutions and high speed wireless networks. Small business owners have neither the time nor the patience to wait for scheduled installation, ~~VARS~~which traditionally could take several weeks. In addition, ~~distributors~~we believe the reduced cost and ~~managed~~improved ~~service~~performance ~~providers~~of inHSPA ~~North~~and ~~America~~HSPA + WiMAX and LTE networks will offer this segment a compelling alternative to wireline.

~~Leveraging~~Emerging ~~customizable~~and ~~software~~Developing Markets – Emerging markets in Brazil, Russia, India, and ~~firmware~~China, toLatin ~~create~~America, ~~new~~Mid ~~applications~~Eastern and African countries are growing faster than in developed countries and have taken the approach that wireline solutions are no longer the optimal, cost effective or timely choice. Management believes many countries will, if they have not already, stop building copper or even fibre networks in metropolitan areas, instead electing to ~~enter~~use ~~new~~wireless ~~vertical~~networks ~~markets~~for their Internet and data access needs.

WeSOHO ~~believe~~(Small ~~that~~Office weHome ~~have established a strong foundation of IP (Intellectual Property~~Office), industry relationships, quality assurance methodologies and proprietary enabling technology, NexWareTM, which can be readily adapted to meet the needs of specific partners and markets. Our objectives over the next 6 months are to continue to build value inside the business and move our company to a more profitable stage of growth. To support this growth, we believe we require approximately $5 million to drive our new business model, launch our new products, meet our customers’ needs and increase shareholder value. We have signed agreements with financial advisors and consultants to assist us in raising the necessary capital.

WeWith ~~intend~~millions toworking ~~use~~from ~~financing~~home ~~raised~~or on the road in hotel rooms, often in small teams of people, data cards with a one to ~~launch~~one relationship to the wireless carrier are cumbersome and ineffective. A customer using our ~~sales~~SOHO product can benefit from improved security and ~~marketing~~throughput ~~campaign,~~speed ~~procure~~at a lower price. One data card can serve the needs of many when connected with our router ~~hardware~~and ~~components~~it is more secure than a hotel lobby or coffee shop and ~~provide~~one does not have to pay the ~~necessary~~often ~~working~~exorbident ~~capital~~hotel torates ~~allow~~for ~~management~~WiFi Internet access. US Government employees are strongly discouraged from connecting to ~~achieve~~their ~~profitability~~corporate email from ~~operations,~~unsecured ~~which~~WiFi hotspots. With the SOHO, we believe ~~will~~that ~~increase~~they ~~shareholder~~need ~~value~~not be concerned.

~~RESULTS~~24 ~~OF OPERATIONS~~

~~THREE~~Speciality ~~AND~~Verticals ~~SIX~~and ~~MONTHS~~M2M ~~ENDED APRIL 30, 2011 COMPARED TO APRIL 30, 2010~~

ToMany ~~ensure~~installations currently exist that wecan ~~positioned~~take ~~our~~advantage ~~company~~of wireless networks connected using a Nexaira router, especially those applications that are difficult to reach with a wireline connection. One example is video survellence. Demand is ever increasing for ~~the~~CCTV ~~future~~cameras ~~growth~~to ~~forecasted~~be in“networked” ~~the~~to ~~wireless~~allow ~~3G/4G~~for ~~sector~~future viewing, webut ~~turned~~many ~~our~~installations ~~attention~~cannot be reached with wireline connections or would be cost prohibitive even if they were. The market is also moving away from ~~being~~existing ~~solely~~analog ~~dependent~~(dial-up) onconnections to IP Video connections using the ~~manfuacturers~~Internet. weAccording ~~represented~~to ~~towards~~IPMarketVideo.info ~~designing~~IP ~~and~~video ~~developing~~surveillance ~~our~~product ~~own~~sales ~~products~~will –increase ~~specifically~~by ~~3G/~~200% 4Gbetween ~~wireless~~2010 ~~routing~~and ~~firmware~~2012, significantly disrupting and ~~hardware~~overtaking analog CCTV sales. ~~This~~Britain ~~focus~~by onall ~~developing~~accounts ~~and~~has ~~marketing~~just ~~our~~1% ~~own~~of ~~line~~the world’s population but accounts for over 20% of ~~products~~CCTV ~~has~~sales ~~impacted~~with ~~our~~an ~~revenues~~install ~~when~~base ~~compared~~of tomore than 4.2 million. Another application where Nexaira routers are built directly into the ~~same~~device ~~period~~is inATMs ~~2010.~~(Automated ~~After~~Teller 18Machines). ~~months~~With ofover ~~testing~~500,000 ~~field~~ATM’s ~~trials~~in North America alone, ~~customer~~and ~~driven~~an ~~enhancements~~industry motivated to find a better solution because of the high cost and ~~modifications~~poor reliability of analog circuits or GPRS 2G radio signals, we believe ~~that~~a wesignificant ~~not~~opportunity ~~only~~exists ~~understand~~to ~~the~~migrate ~~customer~~these ~~requirements~~existing ~~and~~devices ~~the~~to ~~market~~secure ~~verticals~~high ~~but~~speed wireless connections with our routing solutions. We have ~~better~~developed ~~control~~a onspecific solution to replace the ~~business~~function of the dial-up modem and analog circuit, without changing any of the ~~challenges~~other ~~facing~~components itin the ATM itself, while proving a faster more secure and more reliable wireless connections – at a lower cost.

~~Revenues~~Competition

~~Revenues~~Current ~~for~~industry ~~the~~research ~~three~~indicates ~~months~~that ~~ended~~wireless ~~April~~data ~~30,~~service ~~2011~~providers ~~were~~have reached ~~$247,558 compared to $525,053 for the three months ended April 30, 2010,~~ a ~~decrease~~cost of ~~$277,495~~service orinflection ~~53%.~~point ~~Total~~with ~~revenues~~wireline for the six months ended April 30, 2011 amounted to $539,058 compared to $1,031,391 for the same period in 2010, a decrease of $492,333. The decline in revenues in the quarter and six months ended April 30, 2011 was attributable in part to our decision to focus our resources on marketing our own line of products and move away from our dependence on the sale of non-Nexaira products such as data ~~cards~~service ~~and modules, which for the same period in 2010 amounted to $438,175 and $296,956, respectively~~providers. A key contributing factor to the decrease in router sales in our second quarter was the lack of inventory on hand to meet customer orders. With the completion of a $2.2 million purchase order financing line announced May 16, 2011, we anticipate that this purchase order financing will enable our company to acquire inventory as needed to meet the demand of our suite of products from our growing customer base. On a more positive trend, our router revenue for the six months ended April 30, 2011 increased from $263,519 in 2010 to $384,615, up $121,096 or 46% during the same period in 2010. More importantly, Nexaira router sales as a percentage of total sales represented 71% for the six months ended April 30, 2011 compared to only representing 25% of total sales for the same period in 2010.

~~Although~~The ~~the~~competition ~~sales~~is ~~ramp~~divided ~~has~~into ~~not~~three ~~materialized~~distinct as quickly as we anticipated, we are encouraged by the positive trend being established in terms of our month over month unit sales increases and the increasing number of sales leads and deals. We are signing new contracts in the business application, small office/home office and specialty and machine to machine vertical markets. We believe the raising of additional working capital will allow our company to augment its sales and marketing resources required to support our planned future revenue growth.categories:

~~Cost~~• ofLegacy ~~Product~~wireline ~~Sales~~providers who:

~~Cost~~• oftreat ~~product~~wireless revenues before amortization expense of $55,267 for the three months ended April 30, 2011 amounted to $159,781 or 64.5% of revenues compared to $464,777 or 88.5% of revenues for the same period in 2010. This overall decrease is attributable in part to lower revenues for the same period in 2010. The higher cost of product revenues as a ~~percentage~~consumer ofrouting revenues reflects the liquidation of modules during the second quarter. Total cost of revenues amounted to $215,048 for the three months ended April 30, 2011 as compared to $506,022 for the same period in 2010 and includes non cash expenses of $55,267and $41,245, respectively, relating to the amortization of router tooling costs and capitalized research and development costs.application;

26• use Cisco and Juniper type devices that can cost in excess of $1,000 per unit; and

~~Gross~~• ~~Profit~~have limited cellular modem support or controlled modem distribution and pricing.

~~Overall~~• ~~gross~~Wireless ~~profit~~device ~~for~~manufacturers ~~the~~targeting ~~three~~consumers and six months ended April 30, 2011 was $32,510 and $110,402, respectively, or 13% and 20%, respectively, of total revenues from the sale of Nexaira routers, accessories and other manufacturer’s products that ~~have~~do ~~lower~~not ~~margins.~~provide ~~This~~business ~~compares~~class tosolutions overall gross profit of $19,031 and $137,776, respectively, or 4% and 13%, respectively, of total revenues for the three months and six months ended April 30, 2010. The lower gross profit for the current quarter was impacted as a result of liquidating $52,500 in legacy module products at 15% margin. More significant is that the gross profit on Nexaira product router sales, excluding amortization expense of $109,904 which is a non-GAAP measurement, for the six months ended April 30, 2011 amounted to $172,948 or 45% on router revenues of $384,615 The gross profit on router product sales, excluding amortization expense which is a non-GAAP measurement, for the same period in 2010 amounted to $53,161 or 20 % on router revenues of $263,519. This increase in gross profit over the six months of 2010 shows the positive impact of introducing our higher margin product line launched and marketed in fourth quarter of 2010 after receiving certification in May/June 2010.including:

~~Research~~• reliability and ~~Development~~high availability protocols;

~~Research~~• ~~and~~security ~~development totaled $139,608~~ and ~~$193,157~~access ~~for~~protocols; ~~the three months ended April 30, 2011~~ and 2010, respectively, for a total decrease of $53,549. For the six months ended April 30, 2011, research and development totaled $291,864 and $421,876, respectively, for a total decrease of $130,012. This decrease reflects a temporary re-allocation of resources from strict research and development activities to building functions, features and enhancements into our commercial ready products and working collaboratively with our current and potential customers in the Specialty Channels in the Machine to Machine verticals. This collaborative work includes on-site field testing, resolution of hardware issues and sales, marketing and engineering support. We continue to believe that investments in research and development will drive innovation which is critical to our future growth in revenues and customers and our ability to compete effectively in the marketplace.

We• ~~capitalize~~remote ~~software development costs in accordance with ASC 985-20, Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed~~management. Software development costs consist of labor and overhead costs related to development of our suite of NexWare™ firmware for our suite of wireless routers. Software development costs are capitalized when technological feasibility and marketability of the related product has been established. On June 1, 2008, we established technological feasibility upon successful completion and testing of our first working router product pilot firmware program. Capitalized software costs are amortized on a product-by-product basis over five years, beginning when the product is available for general release to customers. As of April 30, 2011, software development costs amounted to $837,230 which includes $109,374 related to the development of NexWare™ Enterprise Pro products expected to be released in the second half of 2011. Accordingly, amortization has not begun on this product to date.

~~Selling,~~• ~~General~~Expensive ~~and~~wireless ~~Administrative~~router manufacturers that:

~~Selling,~~• ~~general~~charge ~~and~~more ~~administrative~~than ~~expenses~~double ~~amounted~~what ~~to $744,892 for~~ the ~~three~~Company ~~months~~does ~~ended April 30, 2011compared to $953,622~~ for ~~the same period in 2010~~, ~~for~~what amanagement ~~decrease of $208~~believe,~~730.~~ For the six months ended April 30, 2011, selling, general and administrative expenses amounted to $1,598,109 compared to $1,882,933 for the same period in 2010, for a total decrease of $284.824. The quarterly and six month decrease in selling, general and administrative expenses is aequivalent ~~result~~functionality; ~~of cost cutting measures, including a reduction in the work force~~ and a reduction in legal and audit fees incurred during the same period in 2010. Included in selling, general and administrative expenses for the six months ended April 30, 2011 is $49,673 for stock compensation expense compared to $65,542 for the same period in 2010.

~~Loss~~• ~~from~~have ~~Operations~~brand awareness developed by costly sales and marketing budgets

~~For~~Intellectual ~~the~~Property three months ended April 30, 2011, our net loss from operations was $851,989, compared to $1,127,748 in the same period in 2010. Our loss from operations amounted to $1,779,570 for the six months ended April 30, 2011 compared to a loss of $2,167,033 for the same period in 2010.

27We have filed trademark applications and secured trademark registrations in the United States and Canada for various aspects of our product portfolio, including:

~~Interest~~NexWareTM for use in association with our computer firmware that provides auto-configuration for cellular wireless devices including routers, modules and ~~Other~~modems; ~~Income~~

OnNexWaveTM ~~January~~for ~~13,~~use ~~2011,~~in weassociation ~~entered into a Debt Settlement and Subscription Agreement~~ with aour ~~vendor.~~high ~~The transaction was recorded as a~~ gain oncellular antenna ~~settlement~~product; ~~of note payable totaling $231,016. The remainder was primarily attributed to settlement of disputed accounts payable to our benefit.~~

~~For~~NexConnect® ~~the~~for ~~three~~use ~~and six month period ended April 30, 2011, the Company recorded a gain of $35,979 on the increase~~ in ~~the~~association ~~decrease in fair value of the derivative related to warrants issued in connection~~ with aour ~~private~~family ~~placement and an extension~~ of ~~the~~computer ~~maturity~~networking ~~date~~hardware ofproducts; ~~a convertible note payable.~~

~~Interest~~XtremeSpeed® for use in association with communication software and ~~Other~~NexWareTM ~~Expense~~wireless algorithm optimization;

~~Interest~~i3 ~~expense~~GUITM ~~for~~our ~~the~~NexWareTM ~~three~~Iconic ~~months~~Graphical ~~ended~~User ~~April 30~~Interface, ~~2011 amounted to $111,809 compared to $37,894~~ for ~~the~~use ~~same period~~ in ~~2010.~~association ~~Interest~~with communication ~~and~~software ~~other expense~~ for ~~the~~providing ~~six~~Internet ~~months~~access; ended April 30, 2011 amounted to $358,115 compared to $140,559 for the six months ended April 30, 2010. The $358,115 is attributed to the increase in short term borrowings from a number of lenders and related parties during 2011 for general working capital purposes compared to the same period in 2010.

~~Net~~HANATM ~~Loss~~for use in association with our family of high availability network adapters;

~~Net~~NEXAIRA®; ~~loss after interest, other income~~ and income taxes amounted to $927,819 for the three months ended April 30, 2011 compared to $1,164,502 for the same period in 2010. Net loss after interest, other income and income taxes amounted to $1,848,936 for the six months ended April 30, 2011 compared to $2,307,252 for the same period in 2010. As our line of routers continues to gain acceptance in the marketplace, we believe our company’s losses will decrease over the next three quarters.

~~OUTSTANDING~~25 ~~SHARE DATA~~

~~Common~~Nexaira ~~Shares~~Wireless™.

~~Total~~We ~~authorized~~have ~~share~~patents ~~capital:~~pending ~~600~~related to our i3 GUI™ technology,~~000,000~~ ~~common~~and ~~shares~~are @in ~~U.S.~~the ~~$0.001~~process ~~par~~of ~~value~~evaluating the efficacy of filing for patent protection on other intellectual property.

~~COMMON~~Employees ~~SHARES~~

	Total issued and outstanding as of October 31, 2009	36,329,262
	Common shares issued in connection with conversion of $1,600,000 convertible debenture on November 10, 2009	19,250,000
	Common shares issued in connection with $375,000 private placement and conversion of $502,262 debt on January 6, 2010	1,754,523
	Common shares issued in connection with $350,000 private placement and conversion of $350,000 convertible debenture on February 23, 2010	1,400,000
	Common shares issued in connection with $575,000 private placement on April 29, 2010	575,000
	Common shares issued on May 26, 2010 in connection with consulting agreement	16,666
	Common shares issued on May 26, 2010 in connection with consulting agreement	100,000
	Common shares issued on May 26, 2010 in connection with $21,487 debt conversion	94,001
	Common shares issued on June 17, 2010 in connection with consulting agreement	16,666
	Common shares issued on July 30, 2010 in connection with consulting agreement	33,332
	Common shares issued on August 12, 2010 in connection with exercise of stock options	65,000
	Common shares issued on September 22, 2010 in connection with consulting agreement	16,666
	Common shares issued on September 27, 2010 in connection with exercise of stock options	160,000
	Total issued and outstanding as of October 31, 2010	59,811,116
	Common shares issued in connection with $860,000 private placement on December 17, 2010	8,600,000
	Common shares issued in connection with conversion of $150,000 debt on January 13, 2011	1,500,000
	Common shares issued in connection with conversion of $471,481 debt on January 13, 2011	2,357,406
	Common shares issued in connection with advisory consulting agreement on March 3, 2011	450,000
	Common shares issued in connection with a consulting agreement on March 3, 2011	450,000
	Common shares issued in connection with conversion of $250,000 debt on February 25, 2011	2,500,000
	Common shares issued in connection with partial conversion of convertible note on February 25, 2011 - $10,000 plus $518 accrued interest	142,030

Our operations are headquartered in San Diego, California and our corporate office is in Vancouver, British Columbia. We have twenty employees, including consultants.

28Corporate History

Common shares issued in connection with partial conversion of convertible note on March 22, 2011 - $20,000 plus $1,172.60 accrue interest	289,665
Common shares issued in connection with $225,000 private placement on March 24, 2011	2,250,000
Total issued and outstanding as of April 30, 2011 and June 14, 2011	78,350,217
COMMON SHARE PURCHASE WARRANTS
Granted October 26, 2009: Exercisable at $0.10 Expiry: June 29, 2011	875,000
Granted October 26, 2009: Exercisable at $0.20 Expiry: January 15, 2013	700,000
Granted October 26, 2009: Exercisable at $0.20 Expiry: September 30, 2011	1,312,500
Granted January 6, 2010: Exercisable at $1.00 Expiry: January 6, 2012	1,754,523
Granted February 23, 2010: Exercisable at $1.00 Expiry: February 23, 2012	1,400,000
Granted April 29, 2010: Exercisable at $1.50 Expiry: April 29, 2012	575,000
Granted August 20, 2010: Exercisable at $0.50 Expiry: August 20, 2013	333,333
Granted December 17, 2010: Exercisable at $0.28 Expiry: December 17, 2013	1,400,000
Granted January 14, 2011: Exercisable at $0.20 Expiry: January 15, 2013	1,129,034
Granted March 21, 2011: Exercisable at $0.15 Expiry: March 21, 2014	333,333
Granted March 23, 2011: Exercisable at $0.15 Expiry: March 23, 2014	2,250,000
Total outstanding common share purchase warrants as of April 30, 2011	12,062,723
Granted May 16, 2011: Exercisable at $0.15 Expiry: May 16, 2014	350,000
Granted May 16, 2011: Exercisable at $0.10 Expiry: May 16, 2014	4,000,000
Total outstanding common share purchase warrants as of June 14, 2011	16,412,723
EMPLOYEE STOCK OPTION PLAN
Total Options available for grant under our company’s Stock Option Plan: 15,000,000
Granted October 5, 2009: 8,400,000 Exercisable at $0.15 Expiry: July 17, 2013	8,400,000
Granted March 22, 2010: 2,012,500 Exercisable at $0.31 Expiry: March 22, 2015	2,012,500
Granted May 17, 2010: 437,500 Exercisable at $0.425 Expiry: May 17, 2015	437,500
Granted on April 20, 2011: 500,000 Exercisable at $0.15 Expiry: April 20, 2016	500,000
Exercised on August 12, 2010 at $0.15	(65,000	)
Exercised on September 27, 2010 at $0.15	(160,000	)
Cancelled during fiscal year 2010: Exercisable at $0.15	(518,750	)
Cancelled during current fiscal year: Exercisable at $0.15	(933,333	)
Total outstanding stock options as of April 30, 2011	9,672,917
Cancelled May 31, 2011	(116,667	)
Total outstanding stock options as of June 14, 2011	9,556,250

We were incorporated in the State of Nevada on March 19, 2007 under the name of Technology Publishing, Inc. On June 1, 2007, we entered into a share purchase agreement whereby we acquired all of the issued and outstanding shares of Westside Publishing Ltd. We divested Westside Publishing Ltd. effective October 28, 2009 as consideration for the cancellation of 40.8 million shares of our restricted common stock. Also on October 30, 2009, 20 million restricted common shares held by a former officer and director, were surrendered for cancellation under a return to treasury order.

~~Issuances~~On ~~Since~~September 29, ~~October~~2009, 31we completed the acquisition of Nexaira Wireless (BC) Ltd. (“Nexaira BC”), ~~2010~~its California subsidiary and its security holders, whereby we agreed to acquire all of the issued and outstanding common shares in the capital of Nexaira BC in consideration for the issuance of 15,489,262 restricted common shares on the basis of 1.75 shares of our common stock for every one Nexaira BC share.

OnEffective ~~December 17~~October 26, ~~2010~~2009, aswe completed ~~disclosed~~a inmerger ~~our current report on Form 8K filed~~ with ~~the~~our ~~Securities~~subsidiary, ~~and~~Nexaira ~~Exchange~~Wireless ~~Commission (the “Commission”) on December 20~~Inc., ~~2010, we closed~~ a ~~private~~Nevada ~~placement~~corporation ofwhich ~~8,600,000~~was ~~shares~~incorporated ofsolely ~~common~~to ~~stock~~effect at a ~~purchase~~change ~~price~~in ~~of $0.10 per share for aggregate proceeds to~~ our ~~company~~name ~~of $860,000. We issued 3,000,000 shares~~ to ~~two~~better ~~non-U.S.~~reflect ~~person (as that term is defined in Regulation S of~~ the ~~Securities~~nature ~~Act~~ of ~~1933,~~our asbusiness. ~~amended)~~As ina ~~an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933~~result, aswe ~~amended~~changed ~~(the~~our ~~“Act”)~~name ~~and~~from 5“Technology Publishing,~~600,000~~ ~~shares to nine U~~Inc.S.” ~~persons pursuant~~ to ~~Rule~~“Nexaira ~~506~~Wireless ofInc.” ~~Regulation~~The Dname ~~and/or~~change ~~Section~~became ~~4(2).~~effective ~~Additionally,~~with ~~1,400,000~~the ~~warrants~~Over-the-Counter ~~were~~Bulletin ~~issued~~Board asat athe ~~placement~~opening ~~fee and~~ for ~~ongoing~~trading ~~investment~~on ~~banking and other financial advisory services to three U.S. persons pursuant to Rule 506 of Regulation D and/or Section 4(~~November 2)., ~~The~~2009 ~~warrants~~under ~~are~~the ~~exercisable~~new atstock asymbol ~~strike price equal to US$0~~“NXWI”.28 ~~per share until November 18, 2013.~~

OnWe ~~January~~believe ~~13, 2011, as disclosed in~~ our ~~current~~wireless ~~Form~~devices 8Kare asideal ~~filed~~for ~~with~~secure ~~the~~high ~~Commission~~availability onwireless ~~January~~applications ~~20,~~acting ~~2011,~~as wethe ~~entered~~primary ~~into~~router aon ~~Debt~~wireless ~~Settlement~~or ~~and~~wireline networks ~~Subscription~~or ~~Agreement~~they ~~with~~can abe ~~vendor~~used ~~whereby~~to weprovide ~~issued~~complete ~~1,500,000~~device ~~common~~and ~~shares~~network atredundancy ~~a price of $0.10 per share~~ in ~~settlement~~failover/fail ofback ~~$150,000~~applications ~~in outstanding account payable~~ and ~~2,357,406~~when ~~common~~connecting ~~shares~~remote atM2M adevices ~~price~~such of $0.20 per share in settlement of $471,481 for the remainder of the outstanding account payable. We recorded a gain of $231,016 related to this settlement for the quarter ended January 31, 2011. We issued the shares to one U.S. person who is an accredited investor (as ~~that~~ATMs ~~term~~and isCCTV ~~defined in Rule 501 of Regulation D, promulgated under the Securities Act of 1933, as amended)~~cameras.

29Plan of Operations

OnAfter ~~January~~months 14of testing, ~~2011~~field trials, customer driven enhancements and modifications, we ~~extended~~believe that we not only understand the ~~expiry~~customer ~~date~~requirements ~~from~~and ~~January~~the ~~15,~~market ~~2011~~verticals tobut ~~January~~have ~~15,~~better ~~2013~~control on ~~700,000~~the ~~warrants~~business ~~exercisable~~and atthe $0challenges facing it.20 ~~per~~Our ~~share~~planned ~~granted~~revenue growth and ability to ~~two~~achieve profitability ~~related~~is ~~party~~expected ~~lenders~~to come as a result of (1) the introduction of our innovative wireless router products and solutions (2) marketing and sales of our suite of products catering to the growing 3G/4G wireless business segment (3) expansion of our sales and operations team focused on ~~October~~the 26wireless marketplace and (4) the capability of securing a continuous stream of router hardware components to meet current and future sales demand. This, ~~2009~~of course, is dependent on our ability to attract and raise new growth and working capital.

OnOver ~~January~~the ~~15,~~next ~~2011,~~twelve ~~we granted 1~~months,~~129,034~~ ~~warrants~~as atpart ~~an exercise price~~ of USour ~~$0.20~~overall ~~per~~business ~~share~~strategy ~~exercisable~~and success atin ~~any~~raising ~~time~~capital ~~until January 15, 2013~~ to afund ~~lender~~our ~~whose~~growth 1plans,~~129,034~~ ~~options~~we ~~expired~~intend ~~November~~to 7,continue ~~2010.~~to ~~The~~develop ~~warrants~~new ~~were~~products, ~~granted~~penetrate innew ~~consideration~~market ~~and~~verticals, ~~acknowledgement~~add ofnew ~~the lender’s continued support~~customers, ~~specifically~~strengthen inour ~~(a)~~business ~~not~~relationships ~~calling~~with ~~the~~strategic ~~loan;~~vendors ~~(b)~~and ~~agreeing~~continue to ~~convert~~be ~~the~~innovative ~~principal~~in developing ~~amount~~software ofand ~~$1,950,000~~firmware ~~debt~~to ~~into~~meet ~~shares of~~ our ~~company;~~customers’ ~~(c)~~needs ~~agreeing~~including ~~to defer interest payments on said demand loans as well as~~ the ~~amount~~addition ~~remaining after the debt conversions; and (d) providing additional funding by way~~ of ~~current~~our ~~outstanding~~new ~~promissory~~Network ~~note~~Management ~~loans,~~Services ~~which at October 31, 2010 aggregate to $412,000~~offering. We ~~issued~~also ~~the~~intend ~~warrants~~ to ~~one~~continue ~~non~~to ~~U.S.~~strengthen ~~person~~our ~~(as~~management ~~that~~by ~~term~~attracting isseasoned ~~defined~~executives inwith ~~Regulation~~sales, marketing, Sfinance ~~of the Securities Act of 1933) in an offshore transaction relying on Regulation S~~ and~~/or~~ ~~Section~~technical ~~4(2)~~expertise offrom the ~~Securities~~wireless ~~Act~~and ofwireline ~~1933~~industries.

OnOur ~~February 25, 2011, as disclosed in our Form 8K as filed with the Commission on March 2, 2011, we entered into a debt settlement and subscription agreement with one investor whereby we agreed~~ go-to-market ~~issue~~strategy ~~2,500,000~~will ~~shares~~focus of our common stock in settlement of $250,000 of a $300,000 debt owing by us to the investor. The shares were issued at a price of $0.10 per share. We also issued the investor a note in the principal amount of $77,321 with respect to the remaining balance payable on the ~~debt.~~following key Onareas: March 3, 2011 we issued the 2,500,000 shares of common stock to one non U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On• ~~February~~Working ~~24, 2011, as disclosed in our Form 8K as filed~~ with ~~the~~wireless ~~Commission~~carriers ~~on March 2, 2011, we entered into a letter agreement with a financial advisor, whereby the advisor agreed~~ to ~~provide~~package ~~certain~~WAN ~~advisory~~failover ~~services~~solutions to ~~our~~merchants ~~company~~experiencing inservice ~~consideration~~interruptions ~~for~~associated ~~the issuance of up to 1,800,000 shares of our company’s common stock at a price of $0.10 per share,~~ with ~~the~~wireline ~~shares~~network to be issued as follows: (a) 450,000 shares upon execution of the letter agreement; and (b) 150,000 shares at the end of each month starting on the last day of the fourth month through the twelfth month of the term of the agreementfailure. ~~The 450,000 shares issued were earned over the first 90 day period.~~

~~Also,~~• onContinuing ~~February~~to ~~24,~~build ~~2011~~wireline asand ~~disclosed~~wireless incarrier ~~our~~relationships ~~Form 8K as filed~~ with the ~~Commission~~goal onof ~~March~~expanding 2,relationships ~~2011, we entered into a consulting agreement with a consultant, whereby the consultant greed~~ to ~~provide~~approximately ~~certain~~300 ~~consulting~~carriers ~~services~~worldwide ~~to our company~~ in ~~consideration~~five ~~for the issuance of up to 1,800,000 shares of our company’s common stock at a price of $0~~years.10 per share, to be issued as follows: (a) 450,000 shares upon execution of the consulting agreement; and (b) 150,000 shares at on the last day of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. The 450,000 shares issued were earned over the first 90 day period.

On• ~~March~~Continuing 2,to ~~2011,~~identify ~~in connection with the entry into the letter agreement with the financial advisor~~ and ~~the~~respond ~~consulting agreement as described above, we issued an aggregate of 900,000 shares of common stock~~ to ~~four~~our ~~U.S.~~customers’ ~~persons~~needs ~~who~~by ~~are~~introducing ~~accredited~~new ~~investors~~product ~~(as~~designs ~~that term is defined in Rule 501 of Regulation D, promulgated under the Securities Act of 1933, as amended),~~ and insolutions ~~issuing these securities to these persons we relied on the registration exemption provided~~ for in3G ~~Rule 506 of Regulation D~~ and~~/or~~ ~~Section~~4G ~~4(2)~~next ofgeneration ~~the Securities Act of 1933, as amended~~networks.

On26 February 25, 2011, a convertible note holder delivered a notice of conversion with respect to $10,000 of the principal amount of a note, dated August 20, 2010, in the principal amount of $400,000 issued by our company to the note holder. Effective February 25, 2011, the $10,000, and $518 accrued interest thereon, were converted into 142,030 common shares of our company at a deemed conversion price of $0.074053 per share. On March 22, 2011, the convertible note holder delivered a notice of conversion with respect to $20,000 of the principal amount of the note. Effective March 23, 2011, the $20,000 and $1,173 accrued interest thereon, were converted into 289,665 common shares of our stock at a deemed conversion price of $0.0731 per share. The note holder is an accredited investor (as that term is defined in Rule 501 of Regulation D, promulgated under the Securities Act of 1933, as amended), and in issuing these securities we relied on the registration exemption provided for in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On• ~~March~~Engaging ~~23,~~in ~~2011,~~business wediscussions ~~closed~~with astrategic ~~private~~partners ~~placement consisting of 2,250,000 units at a purchase price of $0.10 per unit for aggregate gross proceeds of $225,000. Each unit consists of one share~~ in ~~the~~emerging ~~capital~~nations ofwhere ~~our~~wireline ~~company’s~~infrastructure ~~common~~is ~~stock~~not ~~and one common share purchase warrant exercisable at a strike price of $0~~available.~~15 per share at any time until March 23, 2014. The 2,250,000 units were issued to four U.S. persons who are accredited investors.~~

On• ~~May~~Establishing ~~16,~~and ~~2011,~~developing asrelationships ~~disclosed in our current Form 8K as filed~~ with ~~the Commission on May 19~~manufacturers, ~~2011~~VARS, ~~Nexaira,~~distributors ~~Inc., our US subsidiary, entered into a Loan Agreement with Centurion Credit Funding LLC (the ‘Lender”), pursuant to which the Lender provided a $300,000 bridge loan (the “Bridge Loan”)~~ and upmanaged toservice aproviders $2.2 million revolving purchase order financing loan (the “Revolving Loan”). The maturity date for the Bridge Loan is October 24, 2011 and the maturity date for the Revolving Loan is May 16, 2012. The Bridge Loan and Revolving Loan are repayable without penalty prior to maturity at ouroption. We executed the Loan Agreement solely in ~~connection~~North with the conversion provisions of the Loan Agreement, pursuant to which any obligations (including any accrued interest and fees) owing under the Loan Agreement are convertible into shares of our common stock at an conversion price equal to seventy (70) percent of the weighted average sale price per share over the thirty (30) day period prior to the conversion dateAmerica.

30• Leveraging customizable software and firmware to create new applications to enter new vertical markets.

~~Outstanding~~We ~~advances~~believe ~~under~~that ~~the~~we ~~Bridge~~have ~~Loan~~established a strong foundation of IP (Intellectual Property), industry relationships, quality assurance methodologies and ~~the~~proprietary ~~Revolving~~enabling ~~Loan~~technology, NexWareTM, ~~bear~~which ~~interest~~can atbe ~~the~~readily ~~rate~~adapted to meet the needs of ~~36%~~specific ~~per~~partners ~~annum~~and markets. ~~Following~~Our objectives are to continue to build value inside the ~~occurrence~~business and ~~during~~move ~~the~~our ~~continuance~~company ofto ana ~~event~~profitable stage of ~~default~~growth. ~~advances~~To ~~bear~~support ~~interest~~this atgrowth, ~~the~~we ~~rate~~believe ofwe ~~46%~~require ~~per~~approximately ~~annum~~$2 million to drive our new business model, launch our new products, meet our customers’ needs and increase shareholder value.

~~The~~We ~~Revolving~~intend ~~Loan~~to ~~provides~~use ~~for~~financing ~~advances~~raised ~~for inventory in an amount equal~~ to launch ~~the~~our ~~initial~~sales ~~deposit~~and ~~required~~marketing bycampaign, aprocure ~~supplier~~router inhardware ~~connection~~components ~~with the manufacture or supply of inventory (a “Deposit Revolving Advance”). Any outstanding balance of any Deposit Revolving Advance is due~~ and ~~payable~~provide on the ~~earlier~~necessary ofworking ~~receipt~~capital ~~of funds from the applicable customer or 120 days after the making of such Deposit Revolving Advance. The Revolving Loan also provides for advances in an amount equal~~ to ~~the~~allow ~~remaining~~management ~~amount due~~ to aachieve ~~supplier~~profitability for inventory manufactured or supplied by such supplier (a “Balance Revolving Advance”). Any outstanding balance of any Balance Revolving Advance shall be due and payable on the earlier of receipt of funds from ~~the applicable customer or 60 days after the making of such Balance Revolving Advance~~operations.

~~Maturity~~RESULTS ofOF ~~the~~OPERATIONS ~~Bridge Loan and the Revolving Loan may be accelerated if there is an event of default, as that term is defined in the Loan Agreement.~~

InTHREE ~~connection~~AND ~~with~~NINE ~~the~~MONTHS ~~Loan~~ENDED ~~Agreement~~JULY 31, ~~our~~2011 ~~company~~COMPARED ~~and~~TO ~~our~~JULY ~~subsidiaries~~31, 2010 ~~granted security over all of our assets and guaranteed repayment of all obligations owing under the Loan Agreement.~~

~~Also~~To inensure ~~connection~~that ~~with the Loan Agreement,~~ we ~~issued~~positioned ~~share~~our ~~purchase~~company ~~warrants~~for to the ~~Lender~~future togrowth ~~acquire~~forecasted upin tothe 15wireless ~~million~~3G/4G ~~shares of common stock~~sector, 4we ~~million~~turned ofour ~~which~~attention ~~are~~away from ~~immediately~~being ~~exercisable~~solely ~~and~~dependent 11on ~~million~~the ofmanufacturers ~~which~~we ~~become~~represented ~~exercisable~~towards asdesigning toand 1developing ~~million~~our ~~per~~own ~~month~~products ~~beginning~~– onspecifically ~~June~~3G/ ~~16,~~4G ~~2011~~wireless ~~provided~~routing ~~that~~firmware ~~there~~and ~~remains unpaid amounts under the Loan Agreement~~hardware. ~~All~~This ~~warrants~~focus ~~become~~on ~~immediately~~developing ~~exercisable~~and ifmarketing ~~there~~our isown anline ~~event~~ of ~~default,~~products ashas impacted ~~that~~our ~~term~~revenues iswhen ~~defined~~compared into the ~~Loan~~same ~~Agreement~~period in 2010. ~~Upon~~After ~~repayment~~18 months of ~~all~~testing, ~~obligations~~field ~~under~~trials, ~~the~~customer ~~Loan~~driven ~~Agreement,~~enhancements ~~all~~and ~~share~~modifications, ~~purchase~~we ~~warrants~~believe that ~~have~~we not ~~yet~~only ~~become~~understand ~~exercisable~~the ~~will~~customer ~~expire.~~requirements ~~All~~and ~~warrants~~the ~~will~~market beverticals ~~exercisable~~but have ~~for~~better acontrol ~~period~~on ofthe ~~three~~business ~~years~~and ~~from~~ the ~~date~~challenges ~~that~~facing ~~such warrants become exercisable~~it. ~~The exercise price is equal to $0.10 subject to adjustment from time to time.~~

OnRevenues ~~May 16, 2011 we also issued 350,000 warrants at an exercise price $0.15 per share to Reedland Capital Partners, as a commission in connection with the Loan Agreement.~~

~~Preferred~~Revenues ~~Shares~~for the three months ended July 31, 2011 were $408,768 compared to $270,305 for the three months ended July 31, 2010, an increase of $138,463 or 51.2%. Total revenues for the nine months ended July 31, 2011 amounted to $947,826 compared to $1,301,696 for the same period in 2010, a decrease of $353,870. The decline in revenues for the nine months ended July 31, 2011 was attributable primarily as a result of our decision to focus our resources on marketing our own line of products and move away from our dependence on the sale of low margin non-Nexaira products such as data cards and modules, which for the same period in 2010 amounted to $853,617 or 65.5% of our $1,301,696 revenues. By comparison, for the nine months ended July 31, 2011, of the $947,826 in total revenues, only $66,506 related to non-Nexaira products with the remaining $881,320 or 93% related to our own proprietary higher margin router related products. One of the key contributing factors of the lower sales in the nine months ended July 31, 2011, was the lack of inventory on hand to meet customer orders. We anticipate being able to utilize our $2.2 million purchase order financing line which we closed on May 16, 2011 more effectively in the future to enable our company to acquire inventory as needed to meet the demand of our suite of products from our growing customer base. On a more positive trend, our router related revenue for the nine months ended July 31, 2011 increased from $448,079 in 2010 to $881,320, up $433,241 or 96.7% during the same period in 2010.

~~After~~Although ~~receiving~~the ~~shareholder~~sales ~~approval~~ramp inhas ~~connection~~not ~~with~~materialized ~~our~~as ~~proxy~~quickly ~~statement~~as ~~filed~~we ~~September 14~~anticipated, ~~2010 with the Securities Exchange Commission, on October 5, 2010~~ we ~~filed~~are aencouraged ~~Certificate~~by ofthe ~~Amendment~~positive ~~with~~trend ~~the~~being ~~Secretary~~established ofin ~~State~~terms of ~~Nevada~~our month ~~creating~~over ~~100,000,000~~month ~~preferred~~unit ~~shares~~sales ~~with~~increases aand ~~par~~the ~~value~~increasing ofnumber ~~$0.001 per share. Our board~~ of ~~directors~~sales isleads ~~authorized~~and todeals. ~~prescribe~~We ~~the~~are ~~series~~signing ~~and~~new ~~the~~contracts ~~number~~in of the ~~shares~~business ofapplication, ~~each~~small ~~series~~office/home ofoffice ~~preferred~~and ~~stock~~specialty and ~~the~~machine ~~voting~~to ~~powers,~~machine ~~designations,~~vertical ~~preferences,~~markets. ~~limitations,~~We ~~restrictions~~believe ~~and~~the raising ~~relative rights~~ of ~~the~~additional ~~shares~~working ofcapital ~~each~~will ~~series~~allow ofour ~~preferred~~company ~~stock.~~to Noaugment ~~preferred~~its ~~shares~~sales ~~have~~and ~~been~~marketing ~~issued~~resources asrequired ofto ~~the~~support ~~date~~our ofplanned ~~this~~future ~~Report~~revenue growth.

~~FINANCIAL~~Cost ~~CONDITION~~of ~~AND~~Product ~~LIQUIDITY~~Sales

~~Working~~Cost ~~Capital~~of product revenues before amortization of capitalized tooling and research and development costs of $46,849 for the three months ended July 31, 2011 amounted to $182,841 or 44.7% of product revenues compared to $119,535 or 44.2% of revenues for the same period in 2010. For the nine month period ended July 31, 2011, total cost of product revenue before amortization of capitalized tooling and research and development costs of $156,753 amounted to $501,593 or 53% of total revenues of $947,826. The higher cost of product revenues as a percentage of revenues reflects the liquidation of modules and data cards during the first and second quarter. Including amortization expenses noted above, total cost of revenues amounted to $229,690 for the three months ended July 31, 2011 and $658,346 for the nine month period ended July 31, 2011.

		April 30,			October 31,
		2011			2010
		(unaudited)
Current assets	$	440,372		$	565,074
Current liabilities	$	( 4,503,664	)	$	(4,726,657	)
Working capital (deficiency)	$	(4,063,292	)	$	(4,161,583	)

~~Our~~Gross ~~cash~~Profit on hand as of April 30, 2011 was $31,182. On May 16, 2011, we received proceeds of $300,000 for general working capital purposes under a Bridge Loan with an institutional lender. On June 3, 2011, we received proceeds of $100,000 for general working capital purposes under a private placement with an accredited investor. As of April 30, 2011, we had a working capital deficiency of $4,063,292. The $4,503,664 balance in current liabilities at April 30, 2011 include amounts payable to related parties and supportive lenders and include $258,707 in interest payable, $91,000 in accrued board fees, $952,255 in deferred consulting fees and $1,402,396 in short term notes. We have incurred operating losses since 2008, and this is likely to continue for the year ending October 31, 2011.

Overall gross profit for the three and nine months ended July 31, 2011 was $179,078 and $289,480 respectively, or 44% and 30.5%, respectively, of total revenues from the sale of Nexaira routers, accessories and other manufacturer’s products that have lower margins. This compares to overall gross profit of $117,384 and $255,160, respectively, or 43% and 19.6%, respectively, of total revenues for the three months and nine months ended July 31, 2010. The lower gross profit for the nine month period ended July 31, 2011 was impacted as a result of liquidating end of life non-Nexaira products at low margins or at cost. More significant is that the gross profit on Nexaira product router related sales for the nine months ended July 31, 2011, excluding amortization expense of $156,753 (which is a non-GAAP measurement), amounted to $523,483 or 59% on router related revenues of $881,320. When amortization expense is included in the calculation, the gross profit on router product sales for the same period amounted to $366,730 or 41.6 % on router related revenues of $881,320. This increase in gross profit over the nine months of 2010 shows the positive impact of introducing our higher margin product line launched and marketed in fourth quarter of 2010 after receiving certification in May/June 2010.

WeResearch ~~anticipate that our cash on hand~~ and ~~the~~Development revenue that we anticipate generating from product sales will not be sufficient to satisfy all of our cash requirements for the next twelve months. In addition to the $300,000 Bridge Loan, since October 31, 2010 through June 14, 2011 we have successfully raised cash in the amount $1,185,000 in connection with non-brokered private placement transactions and converted $903,171 of our debt into equity. We plan to raise additional capital primarily through the equity financing and further borrowings from our current shareholders and directors if this type of funding continues to be available. We will continue to seek additional funds from our current shareholders and directors to fund our day to day operations until equity financing can be pursued but we have no guarantee that our current shareholders and directors will continue to fund our day to day operations.

WeResearch ~~have~~and ~~been~~development ~~focused~~totaled on$145,236 ~~changing~~and ~~our~~$285,707 ~~business model to include~~ for the ~~development~~three ofmonths ~~our~~ended ~~own~~July 31, ~~line~~2011 ofand ~~software~~2010, torespectively, ~~compliment~~for ~~the~~a ~~distribution~~total ~~side~~decrease of ~~our business~~$140,471. ~~During~~For ~~this period we have experienced a decline in revenues from~~ the ~~legacy~~nine ~~distribution~~months ~~business~~ended ~~resulting in negative cash flow from operations. As of April 30~~July 31, 2011 weand ~~have~~2010, aresearch ~~total~~and ~~shareholders’~~development ~~deficit~~totaled of$437,100 and $2707,~~968~~583,~~460~~ ~~compared~~respectively, tofor a ~~shareholders’~~total ~~deficit~~decrease of $2270,~~937,951 as of October 31, 2010~~483. AsThis ~~discussed~~decrease inreflects ~~Note~~a 3temporary re-allocation of ~~the~~resources ~~Notes to the Condensed Consolidated Financial Statements, we have incurred losses~~ from ~~operations~~strict research and ~~have~~development ~~negative~~activities ~~cash~~to ~~flow~~building ~~from operations~~functions, afeatures ~~working capital~~ and aenhancements ~~net~~into ~~capital deficit that raise substantial doubt about~~ our ~~ability~~commercial toready ~~continue~~products asand aworking ~~going~~collaboratively ~~concern.~~with ~~The~~our ~~Condensed~~current and ~~Consolidated~~potential ~~Financial~~customers ~~Statements~~in dothe ~~not~~Specialty ~~include~~Channels ~~any~~in ~~adjustments that might result from~~ the ~~outcome~~Machine ofto ~~this~~Machine ~~uncertainty~~verticals. ~~Our~~This ~~ability~~collaborative towork ~~continue~~includes ~~as a going concern depends~~ on-site ~~our~~field ~~success~~testing, inresolution ~~generating~~of ~~increased~~hardware ~~revenues~~issues and ~~earnings~~sales, inmarketing ~~the immediate~~ and ~~foreseeable~~engineering ~~future~~support. ~~with~~We ~~the~~continue ~~introduction~~to ofbelieve ~~our~~that investments ~~new~~in ~~line~~research ~~of hardware~~ and ~~software~~development ~~router~~will ~~products~~drive ~~and~~innovation ~~solutions.~~which ~~Furthermore,~~is ~~the~~critical ~~continuation~~to of our ~~company~~future asgrowth ain ~~going~~revenues ~~concern is dependent upon the continued financial support from our shareholders~~ and ~~lenders~~customers and our ability to ~~obtain~~compete ~~necessary~~effectively ~~equity financing to continue operations. The issuance of additional equity securities by us could result~~ in ~~a significant dilution in~~ the ~~equity interests of our current stockholders~~marketplace. ~~Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.~~

~~Future~~We ~~Fundraising~~capitalize software development costs in accordance with ASC 985-20, Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Software development costs consist of labor and overhead costs related to development of our suite of NexWare™ firmware for our suite of wireless routers. Software development costs are capitalized when technological feasibility and marketability of the related product has been established. On June 1, 2008, we established technological feasibility upon successful completion and testing of our first working router product pilot firmware program. Capitalized software costs are amortized on a product-by-product basis over five years, beginning when the product is available for general release to customers. As of July 31, 2011, software development costs amounted to $790,381 which includes $109,374 related to the development of NexWare™ Enterprise Pro/BCIII products expected to be released in the second quarter of fiscal 2012. Accordingly, amortization has not begun on this product to date.

~~Fundraising~~Selling, General will be one of our primary objectives over the next six months. We anticipate our cash requirements for the next 6 months to carry out our business plan will be at least $2 million. We do not anticipate generating positive internal operating cash flow until we can generate substantial revenues from the commercial sale of our new line of hardware and ~~software~~Administrative ~~router products and solutions. We intend to raise $5 million of our cash requirements through equity financings by August 2011.~~

~~As noted above~~Selling, ~~the~~general ~~financial~~and ~~requirements~~administrative ofexpenses ~~our~~amounted ~~company~~to $867,020 for the ~~next~~three ~~six~~ months ~~will~~ended ~~depend~~July 31, 2011 oncompared ~~our ability~~ to ~~raise~~$863,513 for the ~~money~~same weperiod ~~require~~in ~~through~~2010, ~~debt~~an ~~financing~~increase ~~and~~of ~~private~~$3,507. ~~placements~~Included ~~associated~~in ~~with~~ the ~~issuance~~$867,020 ofexpenses ~~additional~~are ~~equity~~approximately ~~securities~~$100,000 ofin ~~our~~legal ~~company~~fees toassociated ~~our~~with ~~current~~the ~~stockholders~~$300,000 ~~and/or~~bridge ~~new~~loan ~~stockholders.~~and ~~The~~$2,200,000 ~~issuance~~PO offinancing ~~additional~~line ~~equity~~negotiated ~~securities~~in byMay 2011. usFor ~~may~~the ~~result~~nine inmonths aended ~~significant~~July 31, ~~dilution~~2011, inselling, ~~the~~general ~~equity~~and ~~interests~~administrative ofexpenses ~~our~~amounted ~~current~~to ~~stockholders.~~$2,465,128 ~~There~~compared isto no$2,746,446 ~~assurance~~for ~~that~~the wesame ~~will~~period bein ~~able~~2010, tofor ~~obtain~~a ~~further~~total ~~funds~~decrease ~~required~~of ~~for~~$281,318. ~~our~~The ~~continued~~quarterly ~~operations~~and ornine ~~that~~month ~~additional~~decrease ~~financing~~in selling, ~~will~~general beand ~~available~~administrative toexpenses usis ~~when~~a ~~needed~~result ~~or,~~of ifcost ~~available~~cutting measures, ~~that~~including ita ~~can~~reduction bein ~~obtained~~the onwork ~~commercially~~force ~~reasonable~~and ~~terms.~~a Ifreduction wein ~~are~~audit ~~not~~fees ~~able~~incurred toduring ~~obtain~~ the ~~additional~~same ~~financing~~period onin a2010. ~~timely~~Included ~~basis~~in selling, wegeneral ~~will~~and ~~not~~administrative expenses befor ~~able~~the tonine ~~meet~~months ~~our~~ended ~~other~~July 31, ~~obligations~~2011 asis ~~they~~$149,107 ~~become~~for ~~due~~stock ~~and~~compensation weexpense ~~will~~compared ~~be forced~~ to ~~scale~~$112,921 ~~down~~for orthe ~~perhaps~~same ~~even~~period ~~cease~~in ~~our operations~~2010.

~~CRITICAL~~Loss ~~ACCOUNTING~~from ~~POLICIES~~Operations

~~The~~For ~~preparation of financial statements in accordance with accounting principles generally accepted in~~ the ~~United~~three ~~States~~months ~~requires~~ended usJuly 31, to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to inventory valuation and warranty liabilities2011, ~~which affect~~ our ~~cost~~net ofloss from ~~sales~~operations ~~and~~was ~~gross margin; the valuation of intangibles~~$751, ~~including software development costs~~412, ~~and~~compared ~~patents~~to ~~and trademarks~~$1,070,097 ~~which could~~ in the ~~future~~same ~~affect~~period ~~our~~in ~~impairment~~2010, ~~charges~~a todecrease ~~write down the carrying value~~ of ~~intangibles~~29.8%. ~~and~~Our ~~the~~loss ~~amount~~from ofoperations ~~related~~amounted ~~periodic~~to ~~amortization~~$2,599,547 ~~expense recorded~~ for ~~definite-lived intangibles;~~ the ~~fair~~nine ~~value~~months ofended ~~derivative liability~~July 31, ~~which~~2011 ~~could~~compared ~~affect~~to ~~our interest and other income should we determine there is~~ a ~~change~~loss ~~in fair value; and the valuation~~ of ~~deferred income taxes~~$3, ~~which affects our income tax expense (benefit). We also have other key accounting policies~~376,549 ~~such as our policies~~ for ~~stock-based~~the ~~compensation~~same ~~and~~period in ~~revenue recognition~~2010, ~~including the deferral of~~ a ~~portion~~decrease of ~~revenues on sales to distributors~~23%. The ~~methods,~~decrease ~~estimates and judgments we use~~ in ~~applying~~loss ~~these~~is ~~critical~~primarily ~~accounting~~due ~~policies have a significant impact on the results we report in our financial statements. We base our estimates and assumptions on historical experience and on various other factors that we believe~~ to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from management’s ~~estimates.~~reducing Tooverhead ~~the extent there are material differences between our estimates~~ and ~~the~~operating ~~actual~~expense ~~results,~~wherever ~~our future results of operations will be affected~~possible.

32Interest and Other Expense

WeOn January 13, ~~believe~~2011, ~~the~~we ~~following~~entered ~~critical~~into ~~accounting~~a ~~policies~~Debt ~~require~~Settlement usand toSubscription ~~make~~Agreement ~~significant~~with ~~judgments~~a ~~and~~vendor. ~~estimates~~The intransaction ~~the~~was ~~preparation~~recorded as a gain on settlement of ~~our~~note ~~consolidated~~payable ~~financial~~totaling ~~statements~~$231,016. The remainder was primarily attributed to settlement of disputed accounts payable to our benefit.

~~Computation~~28 ~~of Income and Loss per Share~~

WeFor ~~compute~~the ~~income~~three and ~~loss~~nine ~~per~~month ~~share~~period inended ~~accordance~~July 31, ~~with ASC 260~~2011, ~~Earnings~~the ~~per~~Company ~~Share.~~recorded ~~ASC~~a ~~260~~gain ~~requires presentation~~ of ~~both~~$35,981 ~~basic and diluted earnings per share (“EPS”)~~ on the decrease ~~face~~in offair ~~the~~value ~~statements~~ of ~~operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by~~ the ~~weighted~~derivative ~~average~~related ~~number of shares outstanding (denominator) during the period. Diluted EPS gives effect~~ to ~~all~~warrants ~~dilutive~~issued ~~potential~~in ~~common~~connection ~~shares~~with ~~outstanding~~a ~~during~~private ~~the~~placement ~~period using the treasury stock method~~ and ~~convertible~~an ~~preferred~~extension ~~stock~~of ~~using~~ the ~~if-converted~~maturity ~~method.~~date ~~In computing diluted EPS, the average stock price for the period is used in determining the number~~ of ~~shares~~a ~~assumed~~convertible tonote ~~be purchased from the exercise of stock options or warrants~~payable. ~~Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.~~

~~Derivative~~Interest ~~Financial~~and ~~Instruments~~other expense for the three months ended July 31, 2011 amounted to $81,766 compared to interest and other expense of $39,424 for the same period in 2010. Interest and other expense for the nine months ended July 31, 2011 amounted to $276,349 compared to $179,983 for the nine months ended July 31, 2010. The increase is attributable to short term borrowings from a number of lenders and related parties during 2011 for general working capital purposes compared to the same period in 2010.

WeIncluded ~~account~~in ~~for~~interest ~~derivative~~and ~~instruments~~other inexpenses ~~accordance~~for ~~with~~ the ~~provisions~~3 ofmonths ~~ASC~~ended ~~815-10,~~July ~~Derivatives Hedging~~31, 2011 ~~and~~is ~~its~~amortization ~~related~~of ~~literature.~~the ~~ASC~~debt ~~815-10~~discount ~~establishes accounting~~ and ~~reporting~~prepaid ~~standards~~financing ~~for~~costs ~~derivative~~associated ~~instruments,~~with ~~including~~the ~~certain~~Bridge ~~derivative~~and ~~instruments~~Revolving ~~embedded~~Loans in ~~other~~the ~~contracts~~amount ~~and~~of ~~for~~$125,000 ~~hedging~~and ~~activities~~$268,671 respectively.

WeNet doLoss not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible debt and equity instruments are reviewed to determine whether or not they contain embedded derivatives that are required under ASC 815-10 to be accounted for separated from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.

~~Fair~~After ~~Value~~including the amortization of ~~Financial~~the ~~Instruments~~debt discount and prepaid financing costs noted above in the amount of $393,671 net loss after interest, other income and income taxes amounted to $1,145,083 for the three months ended July 31, 2011 compared to $1,071,242 for the same period in 2010. Net loss after interest, other income and income taxes amounted to $2,994,018 for the nine months ended July 31, 2011 compared to $3,378,494 for the same period in 2010. As our line of routers continues to gain acceptance in the marketplace, we believe our company’s losses will decrease over the next three quarters.

WeOUTSTANDING ~~adopted~~SHARE ~~and~~DATA follow ASC 820-10, Fair Value Measurements and Disclosures, for measurement and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820-10 are:

~~Level~~Common 1Shares ~~— Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.~~

~~Level~~Total 2authorized —share ~~Inputs~~capital: ~~(other~~600,000,000 ~~than~~common ~~quoted~~shares ~~market~~@ ~~prices~~U.S. ~~included~~$0.001 inpar ~~Level~~value ~~1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.~~

~~Level~~COMMON 3SHARES — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

As defined by ASC 820-10, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.


Total issued and outstanding as of October 31, 2009	36,329,262

Issued in connection with conversion of $1,600,000 convertible debenture on November 10, 2009	19,250,000
Issued in connection with $375,000 private placement and conversion of $502,262 debt on January 6, 2010	1,754,523
Issued in connection with $350,000 private placement and conversion of $350,000 convertible debenture on February 23, 2010	1,400,000
Issued in connection with $575,000 private placement on April 29, 2010	575,000
Issued on May 26, 2010 in connection with consulting agreement	16,666
Issued on May 26, 2010 in connection with consulting agreement	100,000
Issued on May 26, 2010 in connection with $21,487 debt conversion	94,001
Issued on June 17, 2010 in connection with consulting agreement	16,666
Issued on July 30, 2010 in connection with consulting agreement	33,332
Issued on August 12, 2010 in connection with exercise of stock options	65,000
Issued on September 22, 2010 in connection with consulting agreement	16,666
Issued on September 27, 2010 in connection with exercise of stock options	160,000

Total issued and outstanding as of October 31, 2010	59,811,116

Issued in connection with $860,000 private placement on December 17, 2010	8,600,000
Issued in connection with conversion of $150,000 debt on January 13, 2011	1,500,000
Issued in connection with conversion of $471,481 debt on January 13, 2011	2,357,406
Issued in connection with conversion of $250,000 debt on February 25, 2011	2,500,000
Issued in connection with an advisory consulting agreement on March 3, 2011	450,000
Issued in connection with a consulting agreement on March 3, 2011	450,000
Issued in connection with partial conversion of convertible note on February 25, 201	142,030
Issued in connection with partial conversion of convertible note on March 22, 2011	289,665
Issued in connection with $225,000 private placement on March 24, 2011	2,250,000
Issued in connection with $200,000 private placement on July 22, 2011	2,000,000

Total issued and outstanding as of July 31, 2011	80,350,217

Issued in connection with partial conversion of convertible note on August 9, 2011	388,139
Common shares cancelled and returned to treasury on August 12, 2011	(700,000	)
Issued on September 9, 2011 in connection with partial conversion of convertible note	689,213

Total issued and outstanding as of September 20, 2011	80,727,569

~~The~~29 reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of our financial instruments that could have been realized as of April 30, 2011 or that will be recognized in the future and do not include expenses that could be incurred in an actual settlement. The carrying amounts of our financial assets and liabilities, such as cash and cash equivalents, prepaids and other current assets, and other assets, accounts payable, accrued expenses, accrued interest, taxes payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments. Our notes payable to shareholders, long-term debt, and convertible debenture approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to us for similar financial arrangements at April 30, 2011 and October 31, 2010. Our derivative liability measured at fair value on a recurring basis was determined using the following inputs:

33Common share issuances since October 31, 2010:

	Fair Market Measurement at April 30, 2011
				Quoted
				Prices
				in Active		Significant
				Markets for		Other		Significant
				Identical		Observable		Unobservable
				Assets		Inputs		Inputs
		Total		(Level 1)		(Level 2)		(Level 3)
Embedded derivative liability – convertible note payable	$	159,224	$	-	$	-	$	159,224
Warrant derivative liability – private placement	$	126,021	$	-	$	-	$	126,021
Total derivatives	$	285,245	$	-	$	-	$	285,245

On December 17, 2010, as disclosed in our current report on Form 8K filed with the Securities and Exchange Commission (the “Commission”) on December 20, 2010, we closed a private placement of 8,600,000 shares of common stock at a purchase price of $0.10 per share for aggregate proceeds to our company of $860,000. We issued 3,000,000 shares to two non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933, as amended) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and 5,600,000 shares to nine U.S. persons pursuant to Rule 506 of Regulation D and/or Section 4(2).

~~The~~On ~~fair~~January 13, ~~value~~2011, ofas ~~the~~disclosed ~~embedded~~in ~~derivative~~our ~~related~~current toForm ~~the~~8K ~~issuance~~as offiled with the ~~convertible~~Commission ~~note~~on ~~payable~~January 20, as2011, ofwe entered ~~April~~into 30a Debt Settlement and Subscription Agreement with a vendor whereby we issued 1,500,000 ~~2011~~common ~~was~~shares at a price of $~~159,224~~0.10 ~~Our~~per ~~stock~~share in settlement of $150,000 in outstanding account payable and 2,357,406 common shares at a price ~~was~~of $0.0820 per share in settlement of $471,481 ~~risk-free~~for ~~discount~~the ~~rate~~remainder of 4the outstanding account payable.~~15%~~ ~~and~~We ~~volatility~~recorded ofa ~~125%~~gain ~~was~~of ~~used~~$231,016 related to ~~obtain~~this ~~fair~~settlement ~~value~~for the quarter ended January 31, ~~resulting~~2011. inWe issued the ~~change~~shares into ~~fair~~one ~~value~~U.S. ofperson ~~$12,568~~who ~~recorded~~is an accredited investor (as ~~other~~that ~~income~~term inis ~~our~~defined ~~Consolidated~~in ~~Statements~~Rule 501 of ~~Operations~~Regulation ~~for~~D, ~~the~~promulgated ~~six~~under ~~months~~the ~~ended~~Securities ~~April~~Act 30of 1933, ~~2011~~as amended).

~~The~~On February 25, ~~fair~~2011, ~~value~~as ofdisclosed ~~the~~in ~~derivative~~our ~~related~~Form to8K as filed with the ~~price~~Commission ~~protection~~on ofMarch 2, ~~warrants~~2011, inwe ~~connection~~entered into a debt settlement and subscription agreement with ~~the~~one ~~issuance~~investor whereby we agreed to issue 2,500,000 shares of our common stock in settlement aof ~~private~~$250,000 ~~placement as~~ of ~~April~~a 30$300,000 ~~2011~~debt ~~was~~owing ~~$126,021~~by us to the investor. ~~Our~~The ~~stock~~shares were issued at a price ~~was~~of $0.~~08,~~10 ~~risk-free~~per ~~discount~~share. ~~rate~~We ofalso ~~1.01%~~issued ~~and~~the ~~volatility~~investor a note in the principal amount of ~~125%~~$77,321 ~~was~~with ~~used~~respect to ~~obtain~~the ~~fair~~remaining ~~value,~~balance ~~resulting~~payable inon the debt. ~~change~~On inMarch 3, ~~fair~~2011 ~~value~~we ofissued ~~$37~~the 2,~~787~~500,000 ~~recorded~~shares of common stock to one non U.S. person (as ~~other~~that ~~income~~term is defined in ~~our~~Regulation ~~Consolidated~~S ~~Statements~~of the Securities Act of ~~Operations~~1933) ~~for~~in ~~the~~an ~~six~~offshore ~~months~~transaction ~~ended~~relying ~~April~~on ~~30,~~Regulation ~~2011~~S and/or Section 4(2) of the Securities Act of 1933.

AOn ~~reconciliation~~February 24, 2011, the Company entered into a letter agreement with a financial advisor, whereby the advisor agreed to provide certain advisory services to the Company in consideration for the issuance of ~~our~~up ~~liabilities~~to ~~measured~~1,800,000 atshares ~~fair~~of ~~value~~restricted oncommon stock at a ~~recurring~~price ~~basis~~of ~~using~~$0.10 ~~significant~~per ~~unobservable~~share, ~~inputs~~with ~~(Level~~the 3)shares isto be issued as follows: (a) 450,000 shares upon execution of the letter agreement; and (b) 150,000 shares at the end of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. Upon mutual agreement, the Company and financial advisor agreed to terminate the letter agreement on July 19, 2011 and entered into a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. These shares were cancelled and returned to treasury effective August 12, 2011. See Note 13 – Subsequent Event.

		Fair Value Measurements Using
		Significant Unobservable Inputs
		(Level 3)
		Derivative Liabilities
		April 30,			October 31
		2011
		(unaudited)			2010
Balance beginning of period	$	154,615		$	-
Warrant derivative in connection with the private placement		163,808			121,249
Total unrealized loss (income) included in earnings		(33,178	)		33,366
Balance end of period	$	285,245		$	154,615

Also, on February 24, 2011, the Company entered into a consulting agreement , whereby the consultant has agreed to provide certain consulting services to the Company in consideration for the issuance of up to 1,800,000 shares of restricted common stock at a price of $0.10 per share, to be issued as follows: (a) 450,000 shares upon execution of the consulting agreement; and (b) 150,000 shares at the beginning of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement. Upon mutual agreement, the Company and consultant agreed to terminate the letter agreement on July 19, 2011 and entered into a return to treasury agreement on July 25, 2011 whereby 350,000 shares of the initial 450,000 shares issued were to be cancelled. These shares were cancelled and returned to treasury effective August 12, 2011. See Note 13 – Subsequent Event.

34On March 2, 2011, in connection with the entry into the letter agreement with the financial advisor and the consulting agreement as described above, we issued an aggregate of 900,000 shares of common stock to four U.S. persons who are accredited investors (as that term is defined in Rule 501 of Regulation D, promulgated under the Securities Act of 1933, as amended), and in issuing these securities to these persons we relied on the registration exemption provided for in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

~~Concentration~~In connection with a convertible note dated August 20, 2010 in the principal amount of $400,000, ~~Risk~~we have issued 1,509,047 common shares to the note holder with respect to conversion notices received as shown below:

We provide products and services to a variety of customers worldwide. Concentration of credit risk with respect to revenues and trade receivables is limited due to the geographic and industry dispersion of our customer base. We have not experienced significant credit losses on our customer accounts. A small number of customers has typically accounted for a large percentage of our annual revenues and trade accounts receivable. For the three months ended April 30, 2011, three customers accounted for 21%, 18% and 12% respectively, of our revenues. Two customers accounted for 30%, and 10%, respectively, of our revenues for the six months ended April 30, 2011. For the three months ended April 30, 2010, three customers accounted for 42%, 16% and 10%, respectively and three customers accounted for 40%, 15% and 11%, respectively, of our revenues for the six months ended April 30, 2010.


Date of Conversion	Principal Amount		Accrued Interest		Deemed Conversion Price		Number of Shares Issued
February 25, 2011	$	10,000	$	518	$	0.74053		142,030
March 22, 2011		20,000		1,173	$	0.73093		289,665
August 9, 2011		10,000		951	$	0.02820		388,139
August 30, 2011		10,000		1,027	$	0.01600		689,213

								1,509,047

~~Three customers accounted for 19%, 17%, and 10%, respectively, of trade accounts receivable as of April~~ 30, ~~2011. As of April 30, 2010, two customers accounted for 40% and 17% of outstanding trade accounts receivable.~~

WeThe ~~relied~~note onholder ~~two~~is ~~suppliers~~an toaccredited ~~provide~~investor ~~89%~~(as ofthat ~~total~~term ~~inventory~~is ~~purchases~~defined ~~for~~in ~~the~~Rule 501 ~~three~~of ~~months~~Regulation ~~ended April 30~~D, promulgated ~~2011.~~under ~~For~~ the ~~six~~Securities ~~months~~Act ~~ended~~of ~~April 30~~1933, ~~2011,~~as ~~we relied on inventory purchases of 11%~~amended), ~~18%~~ and ~~62%~~in ~~from~~issuing ~~three~~these ~~suppliers,~~securities ~~respectively.~~we We relied on ~~one~~the ~~supplier~~registration toexemption ~~provide~~provided ~~82%~~for ofin ~~total~~Rule 506 ~~inventory~~of ~~purchases~~Regulation ~~for~~D ~~the~~and/or ~~three~~Section 4(2) ~~and~~of ~~six~~the ~~months~~Securities ~~ended~~Act ~~April~~of 301933, ~~2010,~~as ~~respectively~~amended.

~~Research~~On March 23, 2011, we closed a private placement consisting of 2,250,000 units at a purchase price of $0.10 per unit for aggregate gross proceeds of $225,000. Each unit consists of one share in the capital of our company’s common stock and ~~Development~~one ~~Costs~~common share purchase warrant exercisable at a strike price of $0.15 per share at any time until March 23, 2014. The 2,250,000 units were issued to four U.S. persons who are accredited investors.

~~Internal~~On ~~costs~~July 22, ~~relating~~2011, towe ~~research~~closed ~~and~~a ~~development~~private ~~costs~~placement ~~incurred~~consisting of 2,000,000 units at a purchase price of $0.10 per unit for ~~new~~aggregate ~~software~~gross ~~products~~proceeds of $200,000. Each unit consists of one share in the capital of our company’s common stock and ~~enhancements~~one tocommon ~~existing~~share ~~products,~~purchase ~~other~~warrant ~~than~~exercisable ~~certain~~at ~~software~~a ~~development~~strike ~~costs~~price ~~that~~of ~~qualify~~$0.15 ~~for~~per share ~~capitalization~~at any time until July 22, ~~are~~2014. ~~expensed~~The as2,000,000 ~~incurred~~units were issued to a U.S. person who is an accredited investor.

~~Software~~On September 12, ~~Development~~2011, ~~Costs~~the Company received $25,000 pursuant to a non-brokered private placement with a US accredited investor. The Company will enter into US subscription agreements at US $0.10 per unit, each unit compromising one common share and common share purchase warrant exercisable into one common share at the exercise price of US $0.15 at any time within three years from closing date. The offering is expected to close on or before September 26, 2011. These proceeds will be sued for general working capital purposes.

WeCommon ~~capitalize~~share ~~software~~purchase ~~development~~warrants ~~costs~~issued: in accordance with ASC 985-20, Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Software development costs consist of labor and overhead costs related to development of our suite of NexWare™ firmware for our suite of wireless routers. Software development costs are capitalized when technological feasibility and marketability of the related product has been established. On June 1, 2008, we established technological feasibility upon successful completion and testing of our first working router product pilot firmware program. Capitalized software costs are amortized on a product-by-product basis over five years, beginning when the product is available for general release to customers. As of April 30, 2011, software development costs in the amount of $837,230, which includes $109,374 related to the development of NexWare™ Enterprise Pro products expected to be released in the second half of 2011. Accordingly, amortization has not begun on this product to date.

Intangible Assets


Granted October 26, 2009: Exercisable at $0.10 Expiry: June 29, 2011	875,000
Granted October 26, 2009: Exercisable at $0.20 Expiry: extended to January 15, 2013	*700,000
Granted October 26, 2009: Exercisable at $0.20 Expiry: September 30, 2011	1,312,500
Granted January 6, 2010: Exercisable at $1.00 Expiry: January 6, 2012	1,754,523
Granted February 23, 2010: Exercisable at $1.00 Expiry: February 23, 2012	1,400,000
Granted April 29, 2010: Exercisable at $1.50 Expiry: April 29, 2012	575,000
Granted August 20, 2010: Exercisable at $0.50 Expiry: August 20, 2013	333,333

Total granted and outstanding as of October 31, 2010	6,950,356

Granted December 20, 2010: Exercisable at $0.28 Expiry: December 20, 2013	1,400,000
Granted January 14, 2011: Exercisable at $0.20 Expiry: January 15, 2013	1,129,034
Granted March 21, 2011: Exercisable at $0.15 Expiry: March 21, 2014	333,333
Granted March 23, 2011: Exercisable at $0.15 Expiry: March 23, 2014	2,250,000
Granted May 16, 2011 to July 16, 2011: Exercisable at $0.10 Expiry: May 16, 2014	**6,000,000
Granted May 16, 2011: Exercisable at $0.15 Expiry: May 16, 2014	350,000
Expiry: Granted October 26, 2009: Exercisable at $0.10—Expired June 29, 2011	(875,000	)
Granted July 22, 2011: Exercisable at $0.15 Expiry: July 22, 2014	2,000,000
Total outstanding as of July 31, 2011	19,537,723

	**2,000,000

Total outstanding as of September 20, 2011	21,537,723

~~Intangible~~31 assets, consisting principally of patents and trademarks, are accounted for in accordance with ASC 350.30, Goodwill and Other Intangibles. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of fifteen years. Amortization expense included in selling, general and administration expense for the six months ended April 30, 2011 and 2010 was $4,858 and $9,188, respectively.

~~Revenue~~Common ~~Recognition~~share purchase warrants issued since October 31, 2010:

~~Our~~In ~~revenues~~connection ~~comprise~~with the $860,000 private placement on December 20, 2010, we issued 1,400,000 warrants as a placement fee and for ongoing investment banking and other financial advisory services to three U.S. persons pursuant to Rule 506 of ~~the~~Regulation ~~following:~~D and/or Section 4(2). The warrants are exercisable at a strike price equal to US$0.28 per share until December 20, 2013.

~~distribution~~*On ofJanuary 14, ~~third~~2011, ~~party~~we ~~mobile~~extended ~~wireless~~the ~~broadband~~expiry date from January 15, ~~modules~~2011 ~~and~~to ~~router~~January 15, ~~solutions~~2013 on 700,000 aswarrants ~~well~~exercisable asat $0.20 per share granted to two related ~~accessories;~~party lenders on October 26, 2009.

~~our~~**Earned ~~proprietary~~August ~~wireless~~16 ~~router~~and ~~solutions~~September ~~that~~16, ~~are~~2011: ~~integrated~~Exercisable ~~with~~at ~~our~~$0.10 ~~internally~~Expiry: May ~~developed~~16, ~~software~~2014 ~~that is essential to the functionality of the equipment; and~~

~~customization~~On ~~services~~January 14, ~~marketing~~2011, ~~tools~~we granted 1,129,034 ~~provisioning~~warrants at an exercise price of US $0.20 per share exercisable at any time until January 15, 2013 to a lender whose 1,129,034 options expired November 7, 2010. The warrants were granted in consideration and ~~airtime~~acknowledgement ~~activations~~of ~~based~~the lender’s continued support, specifically in (a) not calling the loan; (b) agreeing to convert the principal amount of $1,950,000 debt into shares of our company; (c) agreeing to defer interest payments on ~~individual~~said ~~customer~~demand ~~needs~~loans as well as the amount remaining after the debt conversions; and (d) providing additional funding by way of current outstanding promissory note loans, which at October 31, 2010 aggregated to $412,000. We issued the warrants to one non U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

WeOn ~~recognize~~March 21, ~~revenue~~2011, ~~net~~we ofentered into ~~sales~~an ~~tax,~~amendment inagreement ~~accordance~~ with ~~ASC~~a ~~605-10,~~lender ~~Revenue~~to ~~Recognition,~~extend ~~when~~the ~~all~~maturity ~~four~~date ~~basic~~of ~~criteria~~a ~~are~~10% ~~met:~~$400,000 1)convertible ~~there~~note isfrom ~~evidence~~July 31, ~~that~~2011 anto ~~arrangement~~October 31, ~~exists;~~2011. 2)In ~~delivery~~exchange ~~has~~for ~~occurred; 3)~~ the ~~fee is fixed or determinable; and 4) collectability is reasonably assured. In addition~~extension, we doissued ~~not~~333,333 ~~recognize~~warrants ~~revenue~~with ~~until~~an ~~all~~exercise ~~customers’~~price ~~acceptance~~of ~~criteria have been met~~$0.15 ~~The~~per share ~~criteria~~until ~~are usually met at the time of product shipment~~March 21, ~~except for shipments to distributors with rights of return~~2014.

35On March 23, 2011, we closed a private placement consisting of 2,250,000 units at a purchase price of $0.10 per unit for aggregate gross proceeds of $225,000. Each unit consists of one share in the capital of our company’s common stock and one common share purchase warrant exercisable at a strike price of $0.15 per share at any time until March 23, 2014. The 2,250,000 units were issued to four U.S. persons who are accredited investors.

~~The~~**In ~~portion~~connection ofwith ~~revenue~~the ~~from~~$300,000 Bridge ~~shipments~~Loan and the Revolving Loan entered into on May 16, 2011, we issued share purchase warrants to ~~distributors~~the ~~subject~~Lender to ~~rights~~acquire up to 15 million shares of ~~return~~common isstock, ~~deferred~~4 million ~~until~~of ~~the~~which ~~agreed~~were ~~upon~~immediately ~~percentage~~exercisable and 11 million of ~~return~~which orbecome ~~cancellation~~exercisable ~~privileges~~as ~~lapse.~~to We1 million ~~considered~~per ~~ASC~~month ~~985-605~~beginning on June 16, ~~Software~~2011 ~~Revenue~~provided ~~Recognition~~that ~~applied~~there toremains unpaid amounts under the ~~revenue~~Loan ~~recognition~~Agreement. All warrants become immediately exercisable if there is an event of ~~our~~default, ~~newly~~as ~~developed~~that ~~products~~term is ~~sold~~defined ~~during~~in the ~~six~~Loan ~~months~~Agreement. ~~ended~~Upon ~~April~~repayment 30of all obligations under the Loan Agreement, ~~2011~~all ~~and~~share ~~2010.~~purchase Wewarrants dothat have not ~~currently~~yet ~~sell~~become ~~our~~exercisable ~~proprietary~~will ~~router~~expire. ~~product~~All ~~and~~warrants ~~internally~~will ~~developed~~be ~~software~~exercisable ~~separately,~~for ~~and~~a noperiod ~~services~~of ~~are~~three ~~provided~~years ~~after~~from the ~~product~~date that issuch ~~shipped~~warrants become exercisable. ~~Therefore,~~The ~~normal~~exercise ~~ASC~~price ~~605-~~is equal to $0.10 ~~revenue~~subject ~~recognition~~to ~~guidance~~adjustment ~~applies~~from time to time. As of July 31, 2011, 6,000,000 were immediately exercisable and as ~~noted~~of ~~above~~September 20, 2011, 8,000,000 million are immediately exercisable.

~~ITEM~~On 3May 16, 2011 we also issued 350,000 warrants at an exercise price $0.15 ~~QUANTITATIVE~~per ~~AND~~share ~~QUALITATIVE~~to ~~DISCLOSURES~~two ~~ABOUT~~US ~~MARKET~~persons ~~RISK~~who are accredited investors, as a commission in connection with the aforementioned loan agreements.

~~Not~~On ~~applicable~~June 29, 2011, 875,000 share purchase warrants granted on October 26, 2009 expired unexercised.

~~ITEM~~In 4connection with the 2,000,000 unit private placement entered into on July 22, 2011, we issued 2,000,000 common share purchase warrants to a US person who is an accredited investor. ~~CONTROLS~~The ~~AND~~warrants ~~PROCEDURES~~are ~~Disclosure~~exercisable ~~Controls~~at ~~and~~a ~~Procedures~~strike price of $0.15 per share at any time until July 22, 2014.

~~Disclosure~~Summary ~~controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act~~ of ~~1934~~Employee isStock ~~recorded,~~Option ~~processed,~~Plan: summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our president, to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, our management, with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, being April 30, 2011. Based on this evaluation, these officers concluded that, as of April 30, 2011, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to our company’s management, including our president and chief financial officer, to allow timely decisions regarding required disclosure.


Total Options available for grant under our company’s Stock Option Plan: 15,000,000
Granted October 5, 2009: 8,400,000 Exercisable at $0.15 Expiry: July 17, 2013	8,400,000
Granted March 22, 2010: 2,012,500 Exercisable at $0.31 Expiry: March 22, 2015	2,012,500
Granted May 17, 2010: 437,500 Exercisable at $0.425 Expiry: May 17, 2015	437,500
Granted on April 20, 2011: 500,000 Exercisable at $0.15 Expiry: April 20, 2016	500,000
Exercised on August 12, 2010 at $0.15	(65,000	)
Exercised on September 27, 2010 at $0.15	(160,000	)
Cancelled during fiscal year 2010: Exercisable at $0.15	(518,750	)
Cancelled during current fiscal year: Exercisable at $0.15	(1,137,500	)
Cancelled during current fiscal year: Exercisable at $0.31	(58,333	)

Total outstanding stock options as of July 31, 2011	9,410,417
Cancelled August 25, 2011: Exercisable at $0.15	(262,500	)
Cancelled August 25, 2011: Exercisable at $0.31	(237,500	)

Total outstanding stock options as of September 20, 2011	8,910,417

~~The~~32 conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Our company intends to remediate the material weaknesses as set out below under the heading, “Management’s Remediation Initiatives”.

~~Because~~Preferred ofShares the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

~~Management’s~~After ~~Report~~receiving shareholder approval in connection with our proxy statement filed September 14, 2010 with the Securities Exchange Commission, on ~~Internal~~October 5, ~~Control~~2010 ~~over~~we ~~Financial~~filed ~~Reporting~~a Certificate of Amendment with the Secretary of State of Nevada creating 100,000,000 preferred shares with a par value of $0.001 per share. Our board of directors is authorized to prescribe the series and the number of the shares of each series of preferred stock and the voting powers, designations, preferences, limitations, restrictions and relative rights of the shares of each series of preferred stock. No preferred shares have been issued as of the date of this Report.

~~Our~~FINANCIAL ~~management~~CONDITION isAND ~~responsible~~LIQUIDITY ~~for establishing and maintaining adequate internal control over financial reporting.~~

~~The~~Working ~~term~~Capital “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive officer, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

	(1)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
		July 31,2011			October 31,2010
	(2)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
		(unaudited)
	(3)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, or use or disposition of the registrant's assets that could have a material effect on the financial statements.
Current assets		$	1,583,269		$	565,074
Current liabilities		$	(6,584,352	)	$	(4,726,657	)
Working capital (deficiency)		$	(5,001,083	)	$	(4,161,583	)

36Our cash on hand as of July 31, 2011 was $13,369. On May 16, 2011, we received proceeds of $300,000 for general working capital purposes under a Bridge Loan with an institutional lender. On July 22, 2011, we received proceeds of $200,000 for general working capital purposes under a private placement with an accredited investor. On July 28, 2011, we received proceeds of $53,000 for general working capital purposes under a Convertible Note. As of July 31, 2011, we had a working capital deficiency of $5,001,083. The $6,584,352 balance in current liabilities at July 31, 2011 includes amounts payable to related parties and supportive lenders in the amount of $3,009,130 and includes $988,871 in short term promissory notes, $324,102 in interest payable, $67,000 in accrued board fees, $1,090,584 in deferred management and consulting fees and $538,573 in short term notes and advances. Also included in current liabilities are derivative liabilities of $1,753,062. We have incurred operating losses since 2008, and this is likely to continue for the year ending October 31, 2011.

~~Under~~We ~~the~~anticipate ~~supervision~~that of our ~~chief~~cash ~~executive~~on ~~officer~~hand and ~~chief~~the ~~financial~~revenue ~~officer,~~that ~~being~~we ~~our~~anticipate ~~principal~~generating ~~financial~~from ~~officer,~~product wesales ~~conducted~~will annot ~~evaluation~~be ofsufficient ~~the~~to ~~effectiveness~~satisfy all of our ~~internal~~cash ~~control~~requirements ~~over~~for ~~financial~~the ~~reporting~~next astwelve ofmonths. ~~April~~In 30addition to raising $603,000 in a Bridge Loan and two Promissory Notes, since October 31, 2010 through September 20, 2011 ~~using~~we ~~the~~have ~~criteria~~successfully ~~established~~raised cash in ~~Internal~~the ~~Control—Integrated~~amount ~~Framework~~$1,310,000 in ~~issued~~connection bywith ~~the~~non-brokered ~~Committee~~private ofplacement ~~Sponsoring~~transactions ~~Organizations~~and converted $681,847 of ~~the~~our ~~Treadway~~debt ~~Commission~~into ~~(COSO)~~equity. ~~This~~We ~~evaluation~~plan ~~included~~to ~~review~~raise ofadditional capital primarily through the ~~documentation~~equity offinancing ~~controls,~~and ~~evaluation~~further ofborrowings ~~the~~from ~~design~~our ~~effectiveness~~current ofshareholders ~~controls,~~and directors ~~testing~~if this type of ~~the~~funding ~~operating~~continues ~~effectiveness~~to ofbe ~~controls~~available. ~~and~~We awill ~~conclusion~~continue onto ~~this~~seek ~~evaluation.~~additional ~~Based~~funds onfrom ~~this~~our ~~evaluation,~~current shareholders and directors to fund our ~~management~~day ~~concluded~~to day operations until equity financing can be pursued but we have no guarantee that our ~~internal~~current ~~control~~shareholders ~~over~~and ~~financial~~directors ~~reporting~~will ~~was~~continue ~~not~~to ~~effective~~fund asour atday ~~April~~to ~~30,~~day ~~2011~~operations.

AWe ~~material~~have ~~weakness~~been isfocused aon ~~deficiency,~~changing orour ~~combination~~business model to include the development of ~~deficiencies,~~our inown ~~internal~~line ~~control~~of ~~over~~software ~~financial~~to ~~reporting,~~compliment ~~such~~the ~~that~~distribution ~~there~~side isof aour ~~reasonable~~business. ~~possibility~~During ~~that~~this period we have experienced a ~~material~~decline ~~misstatement~~in ofrevenues ~~our~~from ~~company’s~~the ~~annual~~legacy ordistribution ~~interim~~business ~~financial~~resulting ~~statements~~in ~~will~~negative ~~not~~cash beflow ~~prevented~~from operations. orAs ~~detected~~of onJuly 31, 2011 we have a ~~timely~~total ~~basis.~~shareholders’ Indeficit ~~its~~of ~~assessment~~$3,990,821 compared to a shareholders’ deficit of ~~the~~$2,937,951 ~~effectiveness~~as of ~~our~~October 31, ~~internal~~2010. ~~control~~As ~~over~~discussed ~~financial~~in ~~reporting~~Note as3 of ~~April~~the ~~30,~~Notes ~~2011~~to the Condensed Consolidated Financial Statements, we ~~determined~~have ~~that~~incurred ~~there~~losses ~~were~~from ~~control~~operations ~~deficiencies~~and have negative cash flow from operations, a working capital and a net capital deficit that ~~constituted~~raise ~~material~~substantial ~~weaknesses~~doubt ~~which~~about ~~are~~our ~~indicative~~ability ofto ~~many~~continue ~~small~~as ~~companies~~a ~~with~~going ~~small~~concern. ~~staff,~~The ~~such~~Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability to continue as: a going concern depends on our success in generating increased

	(1)	inadequate segregation of duties and effective risk assessment;
	(2)	insufficient staff knowledge for which complex accounting transactions are not determined and recorded on a timely basis;
	(3)	insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines; and
	(4)	inadequate security and restricted access to computers, including insufficient disaster recovery plans.

~~These~~ revenues ~~control~~and ~~deficiencies~~earnings ~~resulted~~ in ~~a reasonable possibility that a material misstatement of~~ the ~~interim~~immediate ~~financial~~and ~~statements~~foreseeable ~~could~~future ~~not~~with ~~have been prevented or detected on a timely basis. As a result of~~ the ~~material~~introduction ~~weaknesses described above, we concluded that we did not maintain effective internal control over financial reporting as~~ of ~~April~~our ~~30,~~new ~~2011~~line ~~based on criteria established in Internal Control—Integrated Framework issued by COSO. Our management, board~~ of ~~directors~~hardware and ~~audit~~software ~~committee~~router ~~are~~products ~~currently~~and ~~evaluating remediation plans for the above deficiencies~~solutions. ~~During~~Furthermore, the ~~period~~continuation ~~covered~~of byour company ~~this~~as ~~quarterly~~a ~~report~~going onconcern ~~Form~~is ~~10-Q,~~dependent weupon ~~have not been able to remediate~~ the ~~weaknesses~~continued ~~described~~financial ~~above~~support asfrom weour ~~have~~shareholders ~~not~~and ~~had~~lenders ~~sufficient~~and ~~financial~~our ~~resources~~ability to ~~hire~~obtain ~~additional~~necessary ~~administrative~~equity ~~and~~financing ~~accounting personnel~~ to ~~implement~~continue ~~our remediation plan~~operations. ~~However,~~The ~~with~~issuance of additional ~~funding~~equity wesecurities ~~intend~~by tous ~~take~~could result ~~steps~~in toa ~~enhance~~significant ~~and~~dilution ~~improve~~in the ~~design~~equity interests of our ~~internal~~current ~~control~~stockholders. ~~over~~Obtaining ~~financial~~commercial ~~reporting.~~loans, ~~Our~~assuming ~~proposed~~those ~~plans~~loans ~~are~~would ~~set~~be ~~out~~available, ~~below~~will ~~under~~increase ~~the~~our ~~heading,~~liabilities ~~“Management’s~~and ~~Remediation~~future ~~Initiatives”~~cash commitments.

~~Changes~~Future inFundraising ~~Internal Controls~~

AsFundraising ~~discussed~~will ~~above,~~be weone ~~conducted an evaluation~~ of ~~the effectiveness of~~ our ~~internal~~primary ~~control~~objectives over ~~financial~~the ~~reporting~~next ~~during~~three ~~our~~quarters. ~~most~~We ~~recent~~anticipate ~~three~~our ~~months~~cash ~~end~~requirements ~~using~~for the ~~criteria~~next ~~established~~3 months into ~~Internal~~carry ~~Control-Integrated~~out ~~Framework~~our ~~issued~~business byplan ~~the~~and ~~Committee~~retire ofdebt ~~Sponsoring~~maturing ~~Organizations~~in of the ~~Treadway~~November ~~Commission~~/ ~~(COSO).~~December ~~Based~~2011 ontimeframe ~~our~~will ~~evaluation~~be ~~using~~at ~~the~~least ~~criteria~~$2 ~~established,~~million. ~~our~~We ~~management~~intend ~~concluded~~to ~~that~~raise ~~our~~an ~~internal~~additional ~~controls~~$1-2 million ~~over~~in ~~financial~~the 2nd ~~reporting~~quarter ~~were~~of ~~not~~fiscal ~~effective~~2012 asthrough ofequity ~~April~~financings ~~30,~~to support ~~2011~~our growth plans.

~~Management~~As noted above, our company’s ~~Remediation~~success ~~Initiatives~~will depend on our ability to raise the money we require through debt financing and private placements associated with the issuance of additional equity securities of our company to our current stockholders and/or new stockholders. The issuance of additional equity securities by us may result in a significant dilution in the equity interests of our current stockholders. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

~~Although~~CRITICAL ~~our~~ACCOUNTING ~~company~~POLICIES has been unable to meet the standards under COSO because of the limited funds that have been available to a company of our size and stage of development, we are committed to improving our financial organization. Under the corporate governance practices underway, the Board of Directors and management are indentifying ways to reduce the risk of the possibility that a material misstatement is prevented or detected on a timely basis.

OnThe ~~October~~preparation ~~26,~~of ~~2009,~~financial westatements ~~established~~in anaccordance ~~audit~~with ~~committee~~accounting ~~consisting~~principles ofgenerally ~~four~~accepted ~~directors,~~in ~~two~~the ofUnited ~~whom~~States ~~are~~requires ~~independent~~us ~~directors,~~to ~~who~~make ~~oversee~~estimates and assumptions that affect the ~~establishment~~reported amounts of assets and ~~monitoring~~liabilities at the date of ~~required~~the ~~disclosure~~financial ~~controls~~statements and ~~procedures~~the ~~and~~reported ~~internal~~amounts ~~control~~of ~~over~~net ~~financial~~revenue and expenses in the reporting period. ~~Effective~~We ~~January~~regularly ~~25,~~evaluate ~~2011,~~our aestimates ~~more~~and ~~comprehensive~~assumptions ~~Audit~~related ~~Committee~~to ~~Charter~~inventory ~~was~~valuation ~~adopted~~and warranty liabilities, which aaffect ~~copy~~our cost of sales and gross margin; the valuation of intangibles, including software development costs, and patents and trademarks, which iscould ~~incorporated~~in bythe ~~reference~~future asaffect ~~Exhibit~~our ~~99.1~~impairment charges to ~~this~~write ~~Report.~~down ~~Messrs.~~the ~~Grey,~~carrying ~~Weinert,~~value ~~Sampson~~of intangibles and ~~Proceviat~~the ~~have~~amount ~~acted~~of asrelated periodic amortization expense recorded for definite-lived intangibles; the ~~members~~fair value of ~~the~~derivative ~~audit~~liability, ~~committee.~~which ~~Messrs.~~could ~~Grey~~affect our interest and ~~Weinert~~other ~~are~~income ~~independent~~should aswe ~~defined~~determine bythere ~~Nasdaq~~is ~~Marketplace~~a ~~Rule~~change ~~4200~~in fair value; and the valuation of deferred income taxes, which affects our income tax expense (abenefit)~~(15)~~. orWe ~~National~~also ~~Instrument~~have ~~52-110~~other key accounting policies, such as ~~adopted~~our bypolicies ~~the~~for ~~British~~stock-based ~~Columbia~~compensation ~~Securities~~and ~~Commission.~~revenue ~~The~~recognition, ~~audit~~including ~~committee~~the isdeferral ~~directed~~of a portion of revenues on sales to: ~~review~~distributors. ~~the~~The ~~scope~~methods, ~~cost~~estimates and ~~results~~judgments ofwe ~~the~~use ~~independent~~in ~~audit~~applying ofthese ~~our~~critical ~~books~~accounting ~~and~~policies ~~records;~~have ~~review~~a ~~the~~significant ~~results~~impact ofon the ~~annual~~results ~~audit~~we ~~with~~report ~~management;~~in ~~review~~our ~~the~~financial ~~adequacy~~statements. ofWe base our ~~accounting,~~estimates ~~financial~~and assumptions on historical experience and ~~operating~~on ~~controls;~~various ~~recommend~~other ~~annually~~factors that we believe to be reasonable under the ~~board~~circumstances, the results of ~~directors~~which form the ~~selection~~basis offor making judgments about the ~~independent~~carrying ~~registered~~values ~~accountants;~~of ~~consider~~assets ~~proposals~~and ~~made~~liabilities bythat ~~the~~are ~~independent~~not ~~registered~~readily ~~chartered~~apparent from ~~accountants~~other ~~for~~sources. ~~consulting~~The ~~work;~~actual results experienced by us may differ materially and ~~report~~adversely tofrom management’s estimates. To the ~~board~~extent ofthere ~~directors,~~are ~~when~~material sodifferences ~~requested~~between our estimates and the actual results, onour ~~any~~future ~~accounting~~results orof operations ~~financial~~will ~~matters~~be affected.

ItWe isbelieve our plan, with additional funding in place, to undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the ~~accounting~~following ~~function~~critical ~~(3) augment our staff knowledge to ensure timely reporting and disclosure of complex~~ accounting ~~transactions and (4) prepare and implement sufficient written~~ policies ~~and~~require ~~checklists~~us ~~which~~to ~~will~~make ~~set~~significant ~~forth~~judgments ~~procedures for accounting~~ and ~~financial~~estimates ~~reporting with respect to~~ in the ~~requirements~~preparation ~~and application~~ of USour ~~GAAP~~consolidated ~~and~~financial ~~SEC disclosure requirements~~statements.

37Computation of Income and Loss per Share

We ~~will~~compute ~~continue~~income ~~to monitor~~ and ~~evaluate~~loss ~~the~~per ~~effectiveness~~share ofin ~~our~~accordance ~~disclosure~~with ~~controls~~ASC ~~and~~260, ~~procedures~~Earnings ~~and~~per ~~our~~Share. ~~internal~~ASC ~~control~~260 ~~over~~requires ~~financial~~presentation ~~reporting~~of onboth anbasic ~~ongoing basis~~ and ~~are~~diluted earnings ~~committed~~per toshare ~~taking~~(“EPS”) ~~further~~on ~~action~~the ~~and~~face ~~implementing additional enhancements or improvements, as necessary and as funds allow. However, because~~ of the ~~inherent~~statements ~~limitations~~of inoperations. ~~all~~Basic ~~control~~EPS ~~systems,~~is nocomputed ~~evaluation~~by ofdividing ~~controls~~net ~~can~~income ~~provide~~(loss) ~~absolute~~available ~~assurance that misstatements due~~ to ~~error~~common orshareholders ~~fraud~~(numerator) ~~will~~by ~~not~~the ~~occur~~weighted oraverage ~~that~~number ~~all~~of ~~control~~shares ~~issues~~outstanding ~~and~~(denominator) during ~~instances~~the ofperiod. ~~fraud,~~Diluted ifEPS ~~any,~~gives ~~within~~effect ~~our~~to ~~company~~all ~~have~~dilutive ~~been~~potential ~~detected.~~common ~~These~~shares ~~inherent~~outstanding ~~limitations~~during ~~include~~ the ~~realities~~period ~~that~~using ~~judgments~~the intreasury ~~decision~~stock ~~making~~method ~~can be faulty~~ and ~~that~~convertible ~~breakdowns~~preferred ~~can~~stock ~~occur~~using ~~because~~the ofif-converted ~~simple~~method. ~~error~~In orcomputing ~~mistake.~~diluted ~~The~~EPS, ~~design~~the ofaverage stock ~~any~~price ~~system~~for ofthe ~~controls~~period is ~~based~~used in ~~part~~determining ~~on certain assumptions about~~ the ~~likelihood~~number of ~~future~~shares ~~events,~~assumed ~~and~~to ~~there can~~ be nopurchased ~~assurance~~from ~~that~~the ~~any~~exercise ~~design~~of ~~will~~stock ~~succeed~~options inor ~~achieving~~warrants. ~~its~~Diluted ~~stated~~EPS ~~goals~~excludes ~~under~~ all dilutive potential ~~future~~shares ~~conditions.~~if ~~Projections~~their ofeffect ~~any~~is ~~evaluation~~anti ~~of controls effectiveness to future periods are subject to risks~~dilutive.

~~PART~~34 ~~II OTHER INFORMATION~~

~~ITEM~~Derivative 1.Financial ~~LEGAL~~Instruments ~~PROCEEDINGS~~

We ~~know~~account offor noderivative ~~material,~~instruments ~~existing~~in oraccordance ~~pending~~with ~~legal~~the ~~proceedings~~provisions ~~against~~of ~~our~~ASC ~~company~~815-10, ~~nor~~Derivatives ~~are~~Hedging, weand ~~involved~~its asrelated ~~a plaintiff in any material proceeding or pending litigation~~literature. ~~There~~ASC ~~are~~815-10 noestablishes ~~proceedings~~accounting inand ~~which~~reporting ~~any~~standards offor derivative ~~our directors~~instruments, ~~officers~~including orcertain ~~affiliates,~~derivative orinstruments ~~any~~embedded ~~registered~~in orother ~~beneficial~~contracts ~~stockholder,~~and isfor anhedging ~~adverse party or has a material interest adverse to our interest~~activities.

~~ITEM~~We 1Ado not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. ~~RISK~~Terms ~~FACTORS~~of convertible debt and equity instruments are reviewed to determine whether or not they contain embedded derivatives that are required under ASC 815-10 to be accounted for separated from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.

InFair ~~addition~~Value to other information in this quarterly report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of ~~the~~Financial ~~risk~~Instruments factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.

~~Risks~~We ~~Associated~~adopted ~~with~~and ~~our~~follow ~~Business~~ASC 820-10, Fair Value Measurements and Disclosures, for measurement and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820-10 are:

IfLevel we1 ~~are~~— ~~unable~~Inputs toare ~~obtain financing in the amounts and on terms and dates acceptable to us~~unadjusted, wequoted ~~may~~prices ~~not~~in beactive ~~able~~markets tofor ~~expand~~identical orassets ~~continue our operations and development and so may be forced to scale back~~ or ~~cease~~liabilities ~~operations~~at orthe ~~discontinue~~measurement ~~our business~~date. ~~You could lose your entire investment.~~

WeLevel do2 ~~not~~— ~~currently~~Inputs ~~have~~(other ~~any~~than ~~arrangements~~quoted ~~for~~market ~~financing~~prices ~~and~~included we can provide no assurance to investors we will be able to find such financing when such financing is required. Obtaining additional financing would be subject to a number of factors, including investor acceptance of our NexWare routing solutions and our business model. Furthermore, there is no assurance that we will not incur additional debt in ~~the~~Level ~~future,~~1) ~~that~~are weeither ~~will~~directly ~~have sufficient funds to repay our future indebtedness,~~ or ~~that~~indirectly weobservable ~~will~~for ~~not~~the ~~default~~asset ~~on our debts, thereby jeopardizing our business viability. Finally, we may not be able to borrow~~ or ~~raise~~liability ~~additional~~through ~~capital~~correlation inwith ~~the~~market ~~future~~data toat ~~meet our needs or to otherwise provide~~ the measurement ~~capital~~date ~~necessary~~and tofor ~~maintain our operations, which might result in~~ the ~~loss~~duration of ~~some~~the orinstrument’s ~~all~~anticipated ~~of your investment in our common stock~~life.

WeLevel ~~anticipate~~3 ~~that~~— ~~the~~Inputs ~~funds~~reflect ~~that~~management’s ~~were~~best estimate ~~raised~~of ~~from~~what ~~private~~market ~~placements~~participants bywould ~~way~~use ofin ~~subscription~~pricing ~~agreements~~the ~~and~~asset ~~funds~~or ~~advanced~~liability byat ~~our~~the ~~management~~measurement ~~will~~date. ~~not~~Consideration beis ~~sufficient~~given to ~~satisfy~~the ~~our~~risk ~~cash~~inherent ~~requirements~~in ~~for~~the valuation technique and the ~~next~~risk ~~twelve~~inherent ~~month~~in ~~period.~~the ~~Also,~~inputs ~~there~~to isthe nomodel. ~~assurance~~Valuation ~~that~~of instruments ~~actual~~includes ~~cash~~unobservable ~~requirements~~inputs ~~will~~to ~~not~~the ~~exceed~~valuation ~~our~~methodology ~~estimates.~~that Inare ~~particular,~~significant ~~additional~~to ~~capital~~the ~~may~~measurement beof ~~required~~fair invalue ~~the~~of ~~event~~assets ~~that:~~or liabilities.

1.As Wedefined ~~are~~by ~~unsuccessful~~ASC in820-10, ~~penetrating~~the ~~our~~fair ~~target~~value ~~markets~~of ~~and~~a ~~realizing~~financial ~~our~~instrument ~~targeted~~is ~~revenues;~~the 2.amount ~~The~~at ~~cost~~which ofthe ~~manufacturing~~instrument ~~exceeds~~could ~~our~~be ~~estimated~~exchanged ~~costs~~in ~~and~~a wecurrent ~~are~~transaction ~~not~~between ~~able~~willing toparties, ~~realize~~other ~~expected~~than ~~gross~~in ~~margins~~a toforced ~~support~~or liquidation ~~our~~sale, ~~overhead;~~which orwas 3.further ~~Costs~~clarified ~~associated~~as ~~with~~the ~~developing~~price ~~our~~that ~~products~~would orbe ~~filing~~received ~~patents~~to ~~exceed~~sell ~~estimates~~an asset or ~~our~~paid IPto istransfer ~~infringed~~a ~~upon~~liability ~~and~~(“an weexit ~~have~~price”) toin ~~defend~~an itorderly intransaction abetween ~~court~~market ofparticipants ~~law~~at the measurement date.

3835

The ~~occurrence~~reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of ~~any~~factors and assumptions. Accordingly, certain fair values may not represent actual values of our financial instruments that could have been realized as of July 31, 2011 or that will be recognized in the ~~aforementioned~~future and ~~events~~do not include expenses that could ~~prevent~~be usincurred ~~from~~in ~~executing~~an actual settlement. The carrying amounts of our ~~business~~financial ~~plan~~assets and liabilities, ~~expanding~~such ~~our~~as ~~business~~cash ~~operations~~and cash equivalents, prepaids and ~~ultimately~~other ~~achieving~~current aassets, ~~profitable~~and ~~level~~other assets, accounts payable, accrued expenses, accrued interest, taxes payable, and other current liabilities, approximate their fair values because of ~~operations~~the short maturity of these instruments. Our notes payable to shareholders, long-term debt, and convertible debenture approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to us for similar financial arrangements at July 31, 2011 and October 31, 2010. Our derivative liability measured at fair value on a recurring basis was determined using the following inputs:

We depend almost exclusively on outside capital to pay for the continued development of our business and the marketing of our products. Such outside capital may include the sale of additional stock, stockholder and director advances and/or commercial borrowing.


	Fair Market Measurement at July 31, 2011
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Embedded derivative liability – convertible note payable	$	181,347	$	—	$	—	$	181,347
Warrant derivative liability – private placement	$	63,329	$	—	$	—	$	63,329
Embedded derivative liability – convertible note payable	$	115,660	$	—	$	—	$	115,660
Warrant derivative liability – loan agreement	$	1,333,881	$	—	$	—	$	1,333,881
Warrant derivative liability – private placement	$	58,845	$	—	$	—	$	58,845

Total derivatives	$	1,753,062	$	—	$	—	$	1,753,062

~~There~~The ~~can~~fair bevalue noof ~~assurance~~the ~~that~~embedded ~~capital~~derivative ~~will~~related ~~continue~~ to bethe ~~available~~issuance toof ~~meet~~the ~~our~~convertible ~~continuing~~note ~~development~~payable ~~costs~~as ~~or,~~of ~~if the capital is available~~July 31, 2011 ~~that~~was ~~it will be on terms acceptable to us~~$181,347. The ~~issuance~~Company’s ofstock ~~additional~~price ~~equity~~was ~~securities~~$0.04. byA usrisk-free ~~may~~discount ~~result~~rate ~~in a significant dilution in the equity interests~~ of ~~our current stockholders~~3.77% ~~Obtaining commercial loans, assuming those loans would be available, will increase our liabilities~~ and ~~future~~volatility ~~cash~~of ~~commitments~~130.0% Ifwas weused ~~are unable~~ to obtain ~~financing~~fair value, resulting in the ~~amounts~~change ~~and~~in onfair ~~terms~~value ~~deemed~~of ~~acceptable to us~~$22,124 werecorded ~~may~~as ~~not~~other beexpense ~~able~~in tothe ~~expand~~Company’s Consolidated orStatements ~~continue~~of ~~our~~Operations ~~sales~~for ~~and~~the ~~marketing~~three ~~initiatives~~ and sonine ~~may~~months beended ~~forced~~July 31, ~~to scale back or cease operations or discontinue our business and you could lose your entire investment~~2011.

~~Because~~The ~~our~~fair ~~directors~~value ~~and~~of ~~officers~~the ~~control~~derivative arelated ~~large~~to ~~percentage~~the price protection of ~~our~~warrants in connection with the issuance of common stock in a private placement as of July 31, ~~such~~2011 ~~insiders~~was ~~have~~$63,329. ~~the~~The ~~ability~~Company’s stock price was $0.04. A risk-free discount rate of 0.46% and volatility of 130.0% was used to ~~influence~~obtain ~~matters~~fair ~~affecting~~value, ~~our~~resulting ~~stockholders~~in the change in fair value of $(62,692) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011.

~~Excluding~~The ~~warrants~~fair ~~and~~value ~~stock~~of ~~options,~~the ~~our~~embedded ~~directors~~derivative ~~and~~related ~~officers,~~to in the ~~aggregate,~~issuance ~~beneficially own 28.57%~~ of the ~~78,350,217~~convertible ~~issued~~note ~~and~~payable ~~outstanding shares of our common stock~~ as of ~~the date of this Report. As a result~~July 31, ~~they~~2011 ~~have~~was ~~the ability to influence matters affecting our stockholders~~$115,660. ~~including~~The Company’s ~~the~~stock ~~election~~price ofwas ~~our~~$0.04. ~~directors,~~A ~~the~~risk-free ~~acquisition~~discount orrate ~~disposition~~ of ~~our~~3.77% ~~assets,~~ and ~~the~~volatility ~~future issuance~~ of ~~our shares~~130.0% ~~Because~~was ~~our~~used ~~officers~~to ~~and~~obtain ~~directors~~fair ~~control such shares~~value, ~~investors~~resulting ~~will~~in ~~find it difficult to replace our management if they disagree with~~ the ~~way~~change ~~our business is being operated. Because the influence by these insiders could result~~ in ~~management~~fair ~~making~~value ~~decisions that are in the best interest~~ of ~~those~~$9,186 ~~insiders~~recorded ~~and~~as ~~not~~other expense in the ~~best~~Company’s ~~interest~~Consolidated Statements of ~~the~~Operations ~~investors,~~for ~~you may lose some or all of~~ the ~~value~~three ofand ~~your~~nine ~~investment~~months inended ~~our~~July 31, ~~common stock~~2011.

~~Our~~The ~~monthly~~fair value of the derivative related to the price protection of warrants related to the issuance of warrants in connection with the convertible note payable as of July 31, ~~quarterly~~2011 ~~and~~was ~~annual~~$1,302,463. ~~financial~~The ~~results~~Company’s ~~will~~stock beprice ~~subject~~was $0.04, risk-free discount rate of 0.55% and volatility of 130.0% was used to ~~fluctuations~~obtain fair ~~that~~value, ~~could~~resulting ~~affect~~in the ~~market~~change in fair value of $(180,684) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011. The fair value of the derivative related to the price protection of ~~our~~warrants ~~common~~issued ~~shares~~in connection with July 22, 2011 Private Placement as of July 31, 2011 was $58,944. The Company’s stock price was $0.04, risk-free discount rate of 0.55% and volatility of 130.0% was used to obtain fair value, resulting in the change in fair value of $(15,484) recorded as other income in the Company’s Consolidated Statements of Operations for the three and nine months ended July 31, 2011.

~~Our~~A ~~revenue,~~reconciliation ~~gross~~of ~~margin,~~the ~~operating~~Company’s ~~earnings~~liabilities ~~and~~measured ~~net~~at ~~earnings~~fair ~~may~~value ~~vary~~on ~~from~~a ~~month~~recurring tobasis ~~month~~using ~~and~~significant ~~quarter~~unobservable toinputs ~~quarter~~(Level ~~and~~3) ~~could~~is ~~be significantly impacted by a number of factors, including~~as follows:

Possible delays or shortages in manufactured components;


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Derivative Liabilities
	July 31, 2011 (unaudited)		October 31 2010
Balance beginning of period	$	154,615	$	—
Warrant derivative in connection with price placements and loan agreements	$	1,859,175		121,249
Total unrealized loss (income) included in earnings		260,728		33,366

Balance end of period	$	1,753,062	$	154,615

~~Price~~Concentration ~~and product competition, which may result in lower selling prices for some~~ of ~~our~~Risk ~~products or lost market share;~~

~~Transition~~The ~~periods~~Company ~~associated~~provides products and services to a variety of customers worldwide. Concentration of credit risk with respect to revenues and trade receivables is limited due to the ~~migration~~geographic and industry dispersion of ~~new~~the ~~technologies;~~Company’s customer base. The Company has not experienced significant credit losses on its customer accounts. A small number of customers has typically accounted for a large percentage of the Company’s annual revenues and trade accounts receivable. For the three months ended July 31, 2011, three customers accounted for 24%, 22% and 14% respectively, of the Company’s revenues. Two customers accounted for 21%, and 11%, respectively, of the Company’s revenues for the nine months ended July 31, 2011. For the three months ended July 31, 2010, five customers accounted for 20%, 17%, 15%, 13% and 11%, respectively and two customers accounted for 36% and 12%, respectively, of the Company’s revenues for the nine months ended July 31, 2010.

~~The~~36 ~~development and timing of the introduction of our new products;~~

~~The~~Two ~~securing~~customers ofaccounted ~~channel~~for ~~slots~~23%, ~~for~~and ~~new~~36%, ~~products~~respectively, ~~and~~of ~~the~~trade ~~timing~~accounts receivable as of ~~sales~~July 31, 2011. ~~orders~~As ~~and~~of ~~OEM~~July 31, 2010, five customers accounted for 27%, 18%, 14%, 13% and ~~carrier~~10% ~~customer~~of ~~sell~~outstanding ~~through;~~trade accounts receivable.

~~Product~~The ~~mix~~Company relied on one supplier to provide 92% of ~~our~~total ~~sales~~inventory aspurchases ~~our~~for ~~products~~the ~~have~~three ~~different~~months ~~gross~~ended ~~margins;~~July 31, 2011. For the Nine months ended July 31, 2011, the Company relied on inventory purchases of 71% and 13% from two suppliers, respectively. The Company relied on two suppliers to provide 55% and 30% of total inventory purchases for the three and three suppliers to provide 43%, 20% and 13% of total inventory purchases for the nine months ended July 31, 2010 and respectively.

~~The~~Research ~~amount~~and ofDevelopment ~~inventory~~Costs ~~held by our channel partners;~~

~~Possible~~Internal ~~cyclical~~costs ~~fluctuations~~relating ~~related~~to research and development costs incurred for new software products and enhancements to ~~the~~existing ~~evolution~~products, ofother ~~wireless~~than ~~technologies;~~certain software development costs that qualify for capitalization, are expensed as incurred.

~~Possible~~Software ~~delays~~Development inCosts ~~the manufacture or shipment of current or new products;~~

~~Possible~~The Company capitalizes software development costs in accordance with ASC 985-20, Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Software development costs consist of labor and overhead costs related to development of the Company’s suite of NexWare™ firmware for the Company’s suite of wireless routers. Software development costs are capitalized when technological feasibility and marketability of the related product ~~quality~~has ~~that~~been ~~may~~established. ~~increase~~On ~~our~~June 1, ~~cost~~2008, the Company established technological feasibility upon successful completion and testing of ~~goods~~the ~~sold;~~Company’s first working router product pilot firmware program. Capitalized software costs are amortized on a product-by-product basis over five years, beginning when the product is available for general release to customers. As of July 31, 2011, software development costs in the amount of $790,381 includes $109,374 related to the development of NexWare™ Enterprise Pro/Business Class III product expected to be released in the second quarter of fiscal 2012. Accordingly, amortization has not begun on NexWare™ Enterprise Pro/Business Class III to date.

~~Possible~~Intangible ~~increased~~Assets ~~inventory levels;~~

~~Concentration~~Intangible assets, consisting principally of patents and trademarks, are accounted for in ~~our~~accordance ~~customer~~with ~~base;~~ASC 350-30, Goodwill and Other Intangibles. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of fifteen years. Amortization expense for the three months and nine months ended July 31, 2011 was $6,156 and $18,469, respectively. Amortization expense for the three months and nine months ended July 31, 2010 was $5,363 and $14,551, respectively.

~~The~~Revenue ~~achievement~~Recognition ~~of milestones related to signing new customers.~~

~~Because~~Our ~~our~~revenues ~~operating~~comprise ~~expenses are determined based on anticipated sales, are generally fixed and are incurred throughout each fiscal month and quarter, any~~ of the ~~factors~~following: listed above could cause significant variations in our revenues, gross margin and earnings in any given month or quarter. Therefore, our monthly and quarterly results are not necessarily indicative of our overall business, results of operations and financial condition.

~~Monthly,~~• ~~quarterly~~distribution ~~and annual variations in operating results or any~~ of ~~the~~third ~~other~~party ~~factors~~mobile ~~listed~~wireless ~~above~~broadband, ~~changes~~modules inand ~~financial~~router ~~estimates by securities analysts~~solutions, oras ~~other~~well ~~events~~as orrelated factors may result in wide fluctuations in the market price of our stock price. In addition, the financial markets have experienced significant price and volume fluctuations that have particularly affected the market prices of equity securities of many technology companies and that often have been unrelated to the operating performance of these companies or have resulted from the failure of the operating results of such companies to meet market expectations in a particular quarter. Broad market fluctuations or any failure of our operating results in a particular quarter to meet market expectations may adversely affect the market price of our common shares.accessories;

39• our proprietary wireless router solutions that are integrated with our internally developed software that is essential to the functionality of the equipment; and

~~Competition~~• ~~from~~customization ~~new~~services, ormarketing ~~established~~tools, ~~wireless~~provisioning ~~communication companies or from those with greater resources may prevent us from increasing or maintaining our market share~~ and ~~could~~airtime ~~result~~activations inbased ~~price~~on ~~reductions~~individual ~~and/or~~customer ~~loss of business with resulting reduced revenues and gross margins~~needs.

~~The~~We ~~wireless~~recognize ~~communications~~revenue, ~~industry~~net isof ~~highly~~sales ~~competitive~~tax, ~~and~~in weaccordance ~~expect~~with ~~competition~~ASC to605-10, ~~increase~~Revenue ~~and~~Recognition, ~~intensify.~~when ~~More~~all ~~established~~four ~~and~~basic ~~larger~~criteria ~~companies~~are ~~with~~met: ~~greater~~1) there ~~financial,~~is evidence ~~technical~~that ~~and~~an ~~marketing~~arrangement ~~resources~~exists; ~~sell~~2) delivery ~~products~~has ~~that~~occurred; ~~compete~~3) the ~~with~~fee ~~ours~~is ~~and~~fixed weor ~~expect~~determinable; ~~this~~and ~~competition~~4) collectability tois ~~intensify~~reasonably assured. WeIn ~~also~~addition, ~~may~~we ~~introduce~~do ~~new~~not ~~products~~recognize ~~that~~revenue ~~will~~until ~~put~~all uscustomers’ inacceptance ~~direct~~criteria have ~~competition~~been ~~with~~met. ~~major~~The ~~new~~criteria ~~competitors.~~are ~~Existing~~usually ormet ~~future~~at ~~competitors~~the ~~may~~time beof ~~able~~product toshipment, ~~respond~~except ~~more~~for ~~quickly~~shipments to ~~technological~~distributors ~~developments~~with ~~and~~rights ~~changes~~of ~~and~~return. ~~introduce~~The ~~new~~portion ~~products~~of ~~before~~revenue wefrom ~~do,~~shipments orto ~~may~~distributors ~~independently~~subject ~~develop~~to ~~and~~rights ~~patent~~of ~~technologies~~return ~~and~~is ~~products~~deferred ~~that~~until ~~are~~the ~~superior~~agreed upon topercentage ~~ours~~of return or ~~achieve~~cancellation ~~greater~~privileges ~~acceptance~~lapse. ~~due~~We toconsidered ~~factors~~ASC ~~such as more favorable pricing~~985-605, ~~more~~Software ~~desired~~Revenue orRecognition ~~better~~applied ~~quality~~to ~~features~~the orrevenue ~~more~~recognition ~~efficient~~of ~~sales~~our ~~channels.~~newly Ifdeveloped weproducts ~~are~~sold ~~unable~~during tothe ~~compete~~nine ~~effectively~~months ~~with~~ended ~~our competitors’ pricing strategies~~July 31, ~~technological~~2011 ~~advances~~ and 2010. We ~~other~~do ~~initiatives,~~not wecurrently ~~may~~sell ~~lose~~our ~~customer~~proprietary ~~orders~~router product and ~~market~~internally ~~share~~developed software separately, and weno ~~may~~services ~~need~~are toprovided ~~reduce~~after the ~~price~~product ofis ~~our~~shipped. ~~products~~Therefore, ~~resulting~~normal inASC ~~reduced~~605-10 revenue ~~and~~recognition ~~reduced~~guidance ~~gross~~applies ~~margins~~as noted above.

~~Acquisitions~~37 ~~of companies or technologies may result in disruptions to our business or may not achieve the anticipated benefits.~~

AsITEM ~~part of our business strategy, we may acquire additional assets and businesses principally relating to or complementary to our current operations~~3. ~~Any~~QUANTITATIVE ~~acquisitions~~AND ~~and/or~~QUALITATIVE ~~mergers~~DISCLOSURES byABOUT usMARKET ~~will be accompanied by the risks commonly encountered in acquisitions of companies.~~RISK

~~These~~Not ~~risks~~applicable. ~~include, among other things:~~

~~Exposure~~ITEM to4. ~~unknown~~CONTROLS ~~liabilities~~AND ~~of acquired companies, including unknown litigation related to acts or omissions of our acquired company and/or its directors and officers prior to the acquisition;~~PROCEDURES

~~Higher~~Disclosure Controls ~~than anticipated acquisition~~ and ~~integration~~Procedures ~~costs and expenses;~~

~~Effects~~Disclosure ofcontrols ~~costs~~and procedures are controls and ~~expenses~~other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of ~~acquiring~~1934 is recorded, processed, summarized and ~~integrating~~reported, ~~new~~within ~~businesses~~the ontime periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our ~~operating~~reports ~~results~~filed or submitted under the Securities Exchange Act of 1934 is accumulated and ~~financial~~communicated ~~condition;~~to management, including our president, to allow timely decisions regarding required disclosure.

~~The~~As ~~difficulty~~required by paragraph (b) of Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, our management, with the participation of our president (our principal executive officer) and ~~expense~~our chief financial officer (our principal financial officer and principal accounting officer) evaluated the effectiveness of ~~integrating~~our disclosure controls and procedures as of the ~~operations~~end of the period covered by this quarterly report, being July 31, 2011. Based on this evaluation, these officers concluded that, as of July 31, 2011, these disclosure controls and ~~personnel~~procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the ~~companies;~~Securities Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to our company’s management, including our president and chief financial officer, to allow timely decisions regarding required disclosure.

~~Disruption~~The ofconclusion that our ~~ongoing~~disclosure ~~business;~~controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Our company intends to remediate the material weaknesses as set out below under the heading, “Management’s Remediation Initiatives”.

~~Diversion~~Because of ~~management's~~the ~~time~~inherent ~~and~~limitations ~~attention~~in ~~away~~all ~~from~~control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our ~~remaining~~company ~~business~~have ~~during~~been detected. These inherent limitations include the ~~integration~~realities ~~process;~~that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

~~Failure~~Management’s toReport ~~maximize~~on ~~our~~Internal ~~financial~~Control ~~and~~over ~~strategic~~Financial ~~position~~Reporting ~~by the successful incorporation of acquired technology;~~

~~The~~Our ~~inability~~management tois ~~implement~~responsible ~~uniform~~for ~~standards,~~establishing ~~controls,~~and ~~procedures~~maintaining ~~and~~adequate ~~policies;~~internal control over financial reporting.

The ~~loss~~term of“internal ~~key~~control ~~employees~~over ~~and~~financial ~~customers~~reporting” is defined as a ~~result~~process designed by, or under the supervision of, ~~changes~~the inregistrant’s principal executive officer, or persons performing similar functions, and effected by the registrant’s board of directors, management; and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

~~The~~(1) ~~incurrence~~Pertain to the maintenance of ~~amortization~~records ~~expenses.~~that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

As(2) aProvide ~~result~~reasonable ofassurance ~~the~~that ~~growth~~transactions ofare ~~our~~recorded ~~company,~~as wenecessary ~~may seek~~ to ~~raise~~permit ~~additional~~preparation ~~capital~~of ~~through~~financial anstatements ~~offering~~in ofaccordance ~~common~~with ~~shares,~~generally ~~preference~~accepted ~~shares~~accounting ~~or debt~~principles, ~~which~~and ~~may~~that ~~result~~receipts inand ~~dilution~~expenditures ~~and/or~~of the ~~issuance~~registrant ofare ~~securities.~~being Asmade aonly ~~result,~~in ~~our~~accordance ~~share~~with ~~price~~authorizations ~~may~~of ~~decline~~management and ~~there~~directors ~~may~~of ~~be possible dilution to our shareholders if~~ the ~~purchase~~registrant; ~~price is paid in common shares or securities convertible into common shares.~~and

In(3) ~~addition,~~Provide ~~geographic~~reasonable ~~distances~~assurance ~~may~~regarding ~~make~~prevention ~~integration~~or oftimely ~~businesses~~detection ~~more~~of ~~difficult.~~unauthorized Weacquisition, ~~may~~or ~~not~~use ~~be successful in overcoming these risks~~ or ~~any~~disposition ~~other~~of ~~problems~~the ~~encountered~~registrant’s inassets ~~connection~~that ~~with~~could ~~any~~have ~~acquisitions.~~a Ifmaterial ~~realized,~~effect ~~these~~on ~~risks~~the ~~could~~financial ~~reduce shareholder value~~statements.

~~The~~Under ~~loss~~the supervision of ~~any~~our ofchief executive officer and chief financial officer, being our ~~significant~~principal ~~customers~~financial ~~could~~officer, ~~adversely~~we ~~affect~~conducted an evaluation of the effectiveness of our ~~revenue~~internal ~~and~~control ~~profitability~~over financial reporting as of July 31, 2011 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and ~~therefore~~a ~~shareholder~~conclusion ~~value~~on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at July 31, 2011.

We38 sell our products through carriers, mobile operators, service providers, VARS and enterprise customers. We are dependent on a limited number of customers for a significant portion of our revenues. Most of these customers also sell products of our competitors. Accordingly, our business and future success depends on our ability to maintain and build on existing relationships and develop new relationships. If any of these customers, for any reason, discontinues their relationship with us or reduces or postpones current or expected purchase orders for products, or suffers from business failure, our revenues and profitability could decline, perhaps materially. We expect that a limited number of customers will account for a significant portion of our revenues for the foreseeable future. In addition, our current customers purchase our products under purchase orders. Our customers have no contractual obligation to continue to purchase our products following our fulfillment of current purchase orders and if they do not continue to make purchases, our revenue and our profitability could decline, perhaps materially.

40A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of our internal control over financial reporting as of July 31, 2011, we determined that there were control deficiencies that constituted material weaknesses which are indicative of many small companies with small staff, such as:

We(1) ~~depend~~inadequate onsegregation ~~single~~of ~~source~~duties ~~suppliers for some components used in our products~~ and ifeffective ~~these~~risk ~~suppliers are unable to meet our demand the availability of our products may be materially adversely affected.~~assessment;

~~From~~(2) ~~time~~insufficient tostaff ~~time,~~knowledge ~~certain~~for ~~components used in our products have been, and may be, in short supply worldwide and shortages in allocation of components may result in delay in filling orders from our customers,~~ which ~~may~~complex ~~adversely~~accounting ~~affect~~transactions ~~our~~are business. In addition our suppliers may experience damage or interruption in their operations, become insolvent or bankrupt, or experience claims of infringement, all of which could delay or stop their shipment of components to us, which may adversely affect our business. Alternate sources of components may not bedetermined ~~available.~~and Ifrecorded ~~there~~on is a ~~shortage~~timely of any such components and we cannot obtain an appropriate substitute, we may not be able to deliver sufficient quantities of our products, we may lose business or customers and our revenue may be materially adversely affected.basis;

We(3) ~~depend~~insufficient onwritten apolicies ~~limited~~and ~~number~~procedures offor ~~third~~accounting ~~parties~~and tofinancial ~~manufacture~~reporting ~~our~~with ~~products.~~respect ~~If they do not manufacture our products properly or cannot meet our needs in a timely manner, we may be unable~~ to ~~fulfill~~the ~~our~~requirements ~~product delivery obligations~~ and ~~our~~application ~~costs~~of ~~may~~both ~~increase,~~US ~~and~~GAAP ~~our revenue~~ and ~~margins~~SEC ~~could~~guidelines; ~~decrease.~~and

We(4) ~~outsource~~inadequate ~~the~~security ~~manufacturing of our products to a limited number of third parties~~ and ~~depend~~restricted ~~heavily~~access ~~on the ability of these manufacturers~~ to ~~meet our needs in a timely and satisfactory manner at a reasonable cost. We currently rely on two manufacturers~~computers, ~~either~~including ofinsufficient ~~whom~~disaster ~~may~~recovery ~~terminate the manufacturing contract with us at the end of any contract year~~plans. ~~Our reliance on third party manufacturers subjects us to a number of risks, including the following:~~

~~the~~These ~~absence~~control deficiencies resulted in a reasonable possibility that a material misstatement of ~~guaranteed~~the orinterim ~~adequate~~financial ~~manufacturing~~statements ~~capacity;~~could not have been ~~reduced~~prevented or detected on a timely basis. As a result of the material weaknesses described above, we concluded that we did not maintain effective internal control over ~~delivery~~financial ~~schedules~~reporting as of July 31, ~~production~~2011 ~~levels~~based on criteria established in Internal Control—Integrated Framework issued by COSO. Our management, ~~manufacturing~~board ~~yields~~of directors and ~~costs;~~audit committee are currently evaluating remediation plans for the above deficiencies. During the period covered by this quarterly report on ~~their~~Form ~~inability~~10-Q, we have not been able to ~~secure~~remediate ~~adequate~~the ~~volumes~~weaknesses ofdescribed ~~components~~above inas awe ~~timely~~have ~~manner~~not athad asufficient ~~reasonable~~financial ~~cost;~~resources to hire additional administrative and accounting personnel to implement our remediation plan. However, with additional ~~unexpected~~funding ~~increases~~we inintend ~~manufacturing~~to ~~costs~~take steps to enhance and improve the design of our internal control over financial reporting. Our proposed plans are set out below under the heading, “Management’s Remediation Initiatives”.

IfChanges ~~we are unable to successfully manage any of these risks or to locate alternative or additional manufacturers or suppliers~~ in aInternal ~~timely~~Controls and cost-effective manner, we may not be able to deliver products in a timely manner. In addition, our results of operations could be harmed by increased costs, reduced revenues and reduced margins. Under our manufacturing agreements, in many cases we are required to place binding purchase orders with our manufacturers well in advance of our receipt of binding purchase orders from our customers. In this situation, we consider our customers’ good faith, non-binding forecasts of demand for our products.

As discussed ~~a result~~above, ifwe ~~the~~conducted ~~number~~an evaluation of ~~actual products ordered by our customers is materially different from~~ the ~~number~~effectiveness of ~~products we have instructed~~ our ~~manufacturer~~internal tocontrol ~~build~~over ~~(and~~financial ~~purchase~~reporting ~~components~~during ~~in respect of), then, if too many components have been purchased by~~ our ~~manufacturer,~~most werecent ~~may~~three bemonths ~~required~~end tousing ~~purchase~~the ~~such~~criteria ~~excess~~established ~~component~~in ~~inventory,~~Internal ~~or,~~Control-Integrated ifFramework anissued ~~insufficient~~by ~~number~~the Committee of ~~components~~Sponsoring ~~have~~Organizations ~~been~~of ~~purchased~~the byTreadway ~~our~~Commission ~~manufacturer,~~(COSO). weBased ~~may~~on ~~not~~our beevaluation inusing athe ~~position~~criteria toestablished, ~~meet all of~~ our ~~customers’~~management ~~requirements.~~concluded Ifthat ~~we are unable to successfully manage~~ our ~~inventory~~internal ~~levels~~controls ~~and~~over ~~respond~~financial toreporting ~~our~~were ~~customers’~~not ~~purchase~~effective ~~orders~~as ~~based~~of ~~on their forecasted quantities~~July 31, ~~our business could be adversely affected~~2011.

WeManagement’s ~~may~~Remediation ~~have~~Initiatives difficulty responding to changing technology, industry standards and customer requirements, which could cause us to be unable to recover our research and development expenses and our revenue could decline.

~~The~~Although ~~wireless~~our ~~communications~~company ~~industry~~has isbeen ~~subject~~unable to ~~rapid~~meet ~~technological~~the ~~change.~~standards ~~Our~~under ~~business~~COSO ~~and~~because ~~future~~of ~~success~~the ~~will~~limited ~~depend,~~funds inthat ~~part,~~have onbeen ~~our~~available ~~ability~~ to ~~accurately~~a ~~predict~~company ~~and~~of ~~anticipate~~our ~~evolving~~size ~~wireless technology standards~~ and ~~develop~~stage ~~products~~of ~~that keep pace with the continuing changes in technology~~development, ~~evolving~~we ~~industry~~are ~~standards~~committed ~~and~~to ~~changing~~improving our ~~customer~~financial ~~and end-user preferences and requirements~~organization. ~~Our~~Under ~~products~~the ~~embody~~corporate ~~complex~~governance ~~technology~~practices ~~that~~underway, ~~may~~the ~~not~~Board ~~meet~~of ~~those~~Directors ~~standards, preferences~~ and ~~requirements.~~management ~~Our~~are ~~ability~~indentifying ways to ~~design,~~reduce ~~develop~~the ~~and~~risk ~~commercially~~of ~~launch~~the ~~new~~possibility ~~products~~that ~~depends on~~ a ~~number~~material ofmisstatement ~~factors,~~is ~~including,~~prevented ~~but~~or ~~not~~detected ~~limited~~on toa ~~the~~timely ~~following:~~basis.

~~our~~On ~~ability~~October 26, 2009, we established an audit committee consisting of four directors, two of whom are independent directors, who oversee the establishment and monitoring of required disclosure controls and procedures and internal control over financial reporting. Effective January 25, 2011, a more comprehensive Audit Committee Charter was adopted, a copy of which is incorporated by reference as Exhibit 99.1 to ~~attract~~this Report. Messrs. Grey, Weinert, Sampson and ~~retain~~Proceviat ~~skilled~~have ~~technical~~acted ~~employees~~as the members of the audit committee. Messrs. Grey and Weinert are independent as defined by Nasdaq Marketplace Rule 4200(a)(15) or National Instrument 52-110 as adopted by the British Columbia Securities Commission. The audit committee is directed to: review the scope, cost and results of the independent audit of our books and records; review the results of the annual audit with management; review the adequacy of our accounting, financial and operating controls; recommend annually to the board of directors the selection of the independent registered accountants; consider proposals made by the independent registered chartered accountants for consulting work; and report to the board of directors, when so requested, on any accounting or financial matters.

It is our plan, with additional funding in place, to undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the ~~availability~~accounting function (3) augment our staff knowledge to ensure timely reporting and disclosure of ~~critical~~complex ~~components~~accounting ~~from~~transactions ~~third~~and ~~parties;~~(4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

~~our~~We ~~ability~~will continue to ~~successfully~~monitor ~~complete~~and evaluate the ~~development~~effectiveness of ~~products~~our indisclosure acontrols ~~timely~~and ~~manner;~~procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. However, because of the inherent limitations in all control

~~our~~39 ~~ability to manufacture products at an acceptable price and quality.~~

41 systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks.

APART ~~failure~~II byOTHER ~~us,~~INFORMATION or our suppliers, in any of these areas, or a failure of new products to obtain commercial acceptance, could mean we receive less revenue than we anticipate and we are unable to recover our research and development expenses, and may result in a decrease in the market price for our shares.

WeITEM ~~develop products to meet our customers’ requirements~~1. IfLEGAL we are unable or choose not to meet our customers’ future needs, we may not win their future business and our revenue and profitability may decrease. In addition, wireless communications service providers require that wireless data systems deployed on their networks comply with their own standards, which may differ from the standards of other providers. We may be unable to successfully address these developments in a timely basis or at all. Our failure to respond quickly and cost-effectively to new developments through the development of new products or enhancements to existing products could cause us to be unable to recover significant research and development expenses and reduce our revenues.PROCEEDINGS

We ~~may~~know ~~infringe~~of onno material, ~~the~~existing ~~intellectual~~or ~~property~~pending ~~rights~~legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of ~~others~~our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

~~The~~ITEM ~~industry in which we operate has many participants that own, or claim to own, proprietary intellectual property~~1A. ~~While~~RISK to date we have not received assertions or claims from third parties alleging that our products violate or infringe on their intellectual property rights we may receive these assertions in the future. Rights to intellectual property can be difficult to verify and litigation may be necessary to establish whether or not we have infringed the intellectual property rights of others. In many cases, these third parties are companies with substantially greater resources than us, and they may be able to, and may choose to, pursue complex litigation to a greater degree than we could. Regardless of whether these infringement claims have merit or not, we may be subject to the following:FACTORS

WeIn addition to other information in this quarterly report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be ~~liable~~immaterial, may ~~for~~also ~~potentially~~impact ~~substantial~~our ~~damages~~business, ~~liabilities~~operating results, liquidity and ~~litigation~~financial ~~costs~~condition. If any such risks occur, ~~including~~our ~~attorneys’~~business, ~~fees;~~operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.

WeRisks ~~may~~Associated ~~be prohibited from further use of the intellectual property and may be required to cease selling~~ with our ~~products~~Business ~~that are subject to the claim;~~

WeIf ~~may~~we ~~have~~are unable to ~~license~~obtain financing in the ~~third~~amounts ~~party~~and ~~intellectual~~on ~~property,~~terms ~~incurring~~and ~~royalty~~dates ~~fees~~acceptable ~~that~~to ~~may~~us, orwe may not be onable ~~commercially~~to ~~reasonable~~expand or ~~terms.~~continue Inour ~~addition,~~operations ~~there~~and isdevelopment noand ~~assurance~~so ~~that~~may ~~we will~~ be ~~able~~forced to ~~successfully~~scale ~~negotiate~~back ~~and~~or ~~obtain~~cease ~~such~~operations aor ~~license~~discontinue ~~from~~our ~~the~~business. ~~third~~You ~~party;~~could lose your entire investment.

We ~~may~~do not currently have any arrangements for financing and we can provide no assurance to ~~develop~~investors awe ~~non-infringing~~will ~~alternative,~~be ~~which~~able ~~could~~to find such financing when such financing is required. Obtaining additional financing would be ~~costly~~subject ~~and~~to ~~delay~~a ornumber ~~result~~of infactors, ~~the~~including ~~loss~~investor acceptance of ~~sales.~~our InNexWare ~~addition~~routing solutions and our business model. Furthermore, there is no assurance that we will not incur additional debt in the future, that we will have sufficient funds to repay our future indebtedness, or that we will not default on our debts, thereby jeopardizing our business viability. Finally, we may not be able to ~~develop~~borrow ~~such~~or araise ~~non-infringing~~additional ~~alternative;~~capital in the future to meet our needs or to otherwise provide the capital necessary to maintain our operations, which might result in the loss of some or all of your investment in our common stock.

~~The~~We anticipate ~~diversion~~that the funds that were raised from private placements by way of ~~management’s~~subscription ~~attention~~agreements and ~~resources;~~funds advanced by our management will not be sufficient to satisfy our cash requirements for the next twelve month period. Also, there is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that:

~~Our~~1. ~~relationships~~We ~~with~~are ~~customers~~unsuccessful ~~may~~in bepenetrating ~~adversely~~our ~~affected;~~target markets and realizing our targeted revenues;

We2. ~~may~~The becost ~~required~~of tomanufacturing ~~indemnify~~exceeds our ~~customers~~estimated ~~for certain~~ costs and ~~damages~~we ~~they~~are ~~incur~~not inable ~~such~~to arealize ~~claim.~~expected gross margins to support our overhead; or

In3. ~~the~~Costs ~~event~~associated ofwith andeveloping ~~unfavorable outcome in such a claim and~~ our ~~inability~~products toor ~~develop~~filing apatents ~~non-infringing~~exceed ~~alternative,~~estimates ~~then~~or our ~~business,~~IP ~~operating~~is ~~results~~infringed ~~and~~upon ~~financial condition may be materially adversely affected~~ and we ~~may~~ have to ~~restructure~~defend ~~our~~it ~~business~~in a court of law.

~~Misappropriation~~The occurrence of ~~our~~any ~~intellectual~~of ~~property~~the aforementioned events could ~~place~~prevent us atfrom executing our business plan, expanding our business operations and ultimately achieving a ~~competitive~~profitable ~~disadvantage~~level of operations.

~~Our~~40 intellectual property is important to our success. We rely on a combination of patent protection, copyrights, trademarks, trade secrets, licenses, non-disclosure agreements and other contractual agreements to protect our intellectual property. Third parties may attempt to copy aspects of our products and technology or obtain information we regard as proprietary without our authorization. If we are unable to protect our intellectual property against unauthorized use by others it could have an adverse effect on our competitive position. Our strategies to deter misappropriation could be inadequate due to the following risks:

~~Non-recognition~~We ofdepend almost exclusively on outside capital to pay for the ~~proprietary~~continued ~~nature~~development orof ~~inadequate~~our ~~protection~~business and the marketing of our ~~methodologies~~products. inSuch outside capital may include the ~~United~~sale ~~States~~of additional stock, ~~Canada~~stockholder and director advances and/or ~~foreign~~commercial ~~countries;~~borrowing.

~~Undetected~~There ~~misappropriation~~can be no assurance that capital will continue to be available to meet our continuing development costs or, if the capital is available, that it will be on terms acceptable to us. The issuance of additional equity securities by us may result in a significant dilution in the equity interests of our ~~intellectual~~current ~~property;~~stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may not be able to expand or continue our sales and marketing initiatives and so may be forced to scale back or cease operations or discontinue our business and you could lose your entire investment.

~~The~~Because ~~substantial~~our ~~legal~~directors and ~~other~~officers ~~costs~~control ofa ~~protecting~~large ~~and~~percentage ~~enforcing~~of our ~~rights~~common instock, such ~~our~~insiders ~~intellectual~~have ~~property;~~the ~~and~~ability to influence matters affecting our stockholders.

~~Development~~Excluding warrants and stock options, our directors and officers, in the aggregate, beneficially own 27.89% of ~~similar~~the ~~technologies~~80,350,217 issued and outstanding shares of our common stock as of the date of this Report. As a result, they have the ability to influence matters affecting our stockholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our officers and directors control such shares, investors will find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our ~~competitors~~common stock.

InOur ~~addition~~monthly, wequarterly ~~could be required to spend significant funds~~ and ~~our~~annual ~~managerial~~financial ~~resources~~results ~~could~~will be ~~diverted~~subject ~~in order~~ to ~~defend~~fluctuations ~~our~~that could ~~rights,~~affect ~~which~~the ~~could~~market ~~disrupt~~price of our ~~operations~~common shares.

42Our revenue, gross margin, operating earnings and net earnings may vary from month to month and quarter to quarter and could be significantly impacted by a number of factors, including:

~~Fluctuations~~• inPossible ~~exchange~~delays ~~rates~~or ~~between~~shortages ~~the~~in ~~United~~manufactured ~~States dollar and other currencies, including the Canadian dollar may affect our operating results.~~components;

We• ~~are~~Price ~~exposed to fluctuations in the exchange rate between the United States dollar~~ and ~~the~~product ~~Canadian dollar through our operations in Canada. To reduce our risk because of currency fluctuations~~competition, wewhich ~~purchase~~may ~~inventory,~~result ~~other cost of sales items and many of our services~~ in ~~United~~lower ~~States~~selling ~~dollars,~~prices ~~however,~~for some of our ~~operating~~products ~~costs~~or ~~are~~lost ~~still~~market incurred in Canadian dollars, primarily those relating to marketing, administration and sales support. Given the fluctuation in the Canadian dollar relative to the United States dollar, our operating results may be negatively impacted. To date, we have not entered into any foreign currency futures contracts as part of a hedging policy. We expect that as our business expands in Europe and the Asia-Pacific region, we will also be exposed to additional foreign currency transactions and to the associated currency risk.share;

We• ~~depend~~Transition onperiods ~~wireless~~associated ~~network~~with ~~carriers~~the tomigration ~~offer~~of ~~acceptable~~new ~~wireless data and voice communications services for our products to operate.~~technologies;

~~Our~~• ~~products~~The ~~can~~development ~~operate on wireline networks but because of our 3G/4G Business Class focus we are dependent on wireless data~~ and ~~voice~~timing ~~networks operated by third parties. Our business and future growth depends, in part, on the successful deployment by network carriers~~ of ~~next generation wireless data and voice networks and~~ the ~~network~~introduction ~~carriers’ ability to co-market our products. If these network carriers delay the deployment or expansion~~ of ~~next generation networks or fail to offer~~ our ~~products~~new ~~in conjunction with their data plans, or fail to price and market their services effectively, sales of our~~ products ~~will decline and our revenues will decrease.~~;

We• doThe ~~not~~securing ~~have~~of ~~fixed-term~~channel ~~employment~~slots ~~agreements~~for ~~with~~new ~~our~~products ~~key personnel~~ and the ~~loss~~timing of ~~any~~sales ~~key~~orders ~~personnel~~and ~~may~~OEM ~~harm~~and ~~our~~carrier ~~ability~~customer tosell ~~compete effectively.~~through;

~~None~~• ofProduct ~~our~~mix ~~executive officers or other key employees has entered into a fixed-term employment agreement. Our success depends in large part on the abilities and experience~~ of our ~~executive~~sales officers and other key employees. Competition for highly skilled management, technical, research and development and other key employees is intense in the wireless communications industry. We may not be able to retain our current executive officers or key employees and may not be able to hire and transition in a timely manner experienced and highly qualified additional executive officers and key employees as ~~needed to achieve~~ our ~~business~~products ~~objectives.~~have ~~The~~different ~~loss~~gross ~~of executive officers and key employees could disrupt our operations and our ability to compete effectively could be adversely affected.~~margins;

As• ~~our~~The ~~business~~amount ~~expands~~of ~~internationally,~~inventory weheld ~~will~~by beour ~~exposed~~channel ~~to additional risks relating to international operations.~~partners;

If• wePossible ~~are~~cyclical ~~unable~~fluctuations related to ~~further develop distribution channels in Europe and~~ the ~~Asia-Pacific~~evolution ~~region~~of wewireless ~~may not be able to grow our international operations and our ability to increase our revenue will be negatively impacted.~~technologies;

~~Government~~• ~~regulation~~Possible ~~could~~delays ~~result~~ in ~~increased~~the ~~costs~~manufacture ~~and~~or ~~inability~~shipment toof ~~sell~~current ~~our~~or new products.;

~~Our~~• ~~products~~Possible ~~are~~product ~~subject~~quality tothat ~~certain~~may ~~mandatory~~increase ~~regulatory~~our ~~approvals~~cost ~~in the United States, Canada, the European Union and other regions in which we operate. In the United States, the Federal Communications Commission regulates many aspects~~ of ~~communications~~goods devices. In Canada, similar regulations are administered by the Ministry of Industry, through Industry Canada. European Union directives provide comparable regulatory guidance in Europe. Although we have obtained all the necessary Federal Communications Commission, Industry Canada and other required approvals for the products we currently sell, we may not obtain approvals for future products on a timely basis, or at all. In addition, regulatory requirements may change or we may not be able to obtain regulatory approvals from countries other than the United States and Canada in which we may desire to sell products in the future.sold;

If• ~~our~~Possible ~~efforts~~increased toinventory ~~restore the business to sustained profitability are not successful, we may be required to restructure or take other actions and our share price may decline.~~levels;

We• ~~have~~Concentration ~~incurred losses from operations~~ in ~~2010, 2009 and 2008 as a result of restructuring~~ our ~~business~~customer ~~and~~base; ~~selling off low margin end of life products associated with the distribution business~~ and we believe that we will continue to incur losses throughout fiscal year ending October 31, 2011 until such time we have the necessary funds to attract and hire additional sales, marketing, and support personnel required to reach our monthly breakeven sales targets.

~~Our~~• ~~ability~~The toachievement ~~achieve and maintain profitability in the future will depend on, among other things, the continued sales~~ of ~~our~~milestones ~~current~~related ~~products~~to ~~and~~signing ~~the successful development and commercialization of~~ new ~~products~~customers. If we cannot sustain profitability, our total losses will increase and we may be required to restructure our operations or raise additional capital. Additional financing may not be available, and even if available, may not be on acceptable terms. We may seek to raise additional capital through an offering of common shares, preference shares or debt, which may result in dilution, and/or the issuance of securities with rights senior to the rights, of the holders of common shares. As a result, our share price may decline.

43Because our operating expenses are determined based on anticipated sales, are generally fixed and are incurred throughout each fiscal month and quarter, any of the factors listed above could cause significant variations in our revenues, gross margin and earnings in any given month or quarter. Therefore, our monthly and quarterly results are not necessarily indicative of our overall business, results of operations and financial condition.

~~Risks~~Monthly, ~~Associated~~quarterly ~~with~~and ~~Our~~annual ~~Common~~variations ~~Stock~~in operating results or any of the other factors listed above, changes in financial estimates by securities analysts, or other events or factors may result in wide fluctuations in the market price of our stock price. In addition, the financial markets have experienced significant price and volume fluctuations that have particularly affected the market prices of equity securities of many technology companies and that often have been unrelated to the operating performance of these companies or have resulted from the failure of the operating results of such companies to meet market expectations in a particular quarter. Broad market fluctuations or any failure of our operating results in a particular quarter to meet market expectations may adversely affect the market price of our common shares.

WeCompetition dofrom ~~not~~new ~~intend~~or toestablished ~~pay~~wireless ~~dividends~~communication oncompanies ~~any~~or ~~investment~~from inthose with greater resources may prevent us from increasing or maintaining our ~~common~~market ~~stock~~share and could result in price reductions and/or loss of business with resulting reduced revenues and gross margins.

WeThe dowireless ~~not~~communications ~~currently~~industry ~~anticipate declaring and paying dividends to our stockholders in the near future. It~~ is ~~our~~highly ~~current~~competitive ~~intention~~and towe ~~apply~~expect ~~net~~competition ~~earnings, if any, in the foreseeable future~~ to ~~increasing~~increase ~~our~~and ~~working capital~~intensify. ~~There~~More ~~can~~established ~~be no assurance that we will ever have sufficient earnings to declare~~ and ~~pay~~larger ~~dividends~~companies towith greater ~~the holders of shares of our common stock~~financial, ~~and~~technical ~~in any event, a decision to declare~~ and ~~pay~~marketing ~~dividends~~resources issell atproducts ~~the sole discretion of our board of directors, which currently do not intend to pay any dividends on shares of our common stock for the foreseeable future. To the extent~~ that wecompete ~~require~~with ~~additional~~ours financing currently not provided for in our financing plan, our financing sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our common stock will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our common stock.

~~The~~41 ~~price of our common stock is likely to be highly volatile and may decline. If this happens, our stockholders may have difficulty selling their shares and may not be able to sell their shares at all.~~

and we expect this competition to intensify. We ~~cannot~~also ~~assure~~may ~~you~~introduce new products that awill ~~trading~~put ~~market~~us ~~will~~in ~~continue~~direct tocompetition ~~develop~~with ~~for~~major ~~our~~new ~~common~~competitors. ~~stock,~~Existing or iffuture itcompetitors ~~does,~~may itbe ~~may~~able ~~not~~to respond bemore ~~sustained~~quickly to technological developments and changes and introduce new products before we do, or may independently develop and patent technologies and products that ~~any~~are ~~stockholder~~superior ~~will~~to beours ~~able~~or achieve greater acceptance due to ~~liquidate~~factors ~~his~~such as more favorable pricing, more desired or ~~her~~better ~~investment~~quality ~~without~~features ~~considerable~~or ~~delay,~~more ifefficient atsales ~~all~~channels. ~~The~~If ~~market~~we ~~price~~are ofunable ~~our~~to ~~common~~compete ~~stock~~effectively iswith ~~likely~~our tocompetitors’ bepricing ~~highly~~strategies, ~~volatile~~technological advances and other initiatives, we may ~~also~~lose customer ~~fluctuate~~orders ~~significantly~~and inmarket ~~response~~share and we may need to reduce the ~~following~~price ~~factors~~of our products, ~~most~~resulting ofin ~~which~~reduced ~~are~~revenue ~~beyond~~and ~~our~~reduced ~~control:~~gross margins.

~~variations~~Acquisitions of companies or technologies may result in disruptions to our ~~quarterly~~business ~~operating~~or ~~results;~~may not achieve the anticipated benefits.

~~changes~~As inpart ~~market~~of ~~valuations~~our ofbusiness ~~similar~~strategy, we may acquire additional assets and businesses principally relating to or complementary to our current operations. Any acquisitions and/or mergers by us will be accompanied by the risks commonly encountered in acquisitions of companies;.

~~announcements~~These byrisks usinclude, among orother ~~our~~things: ~~competitors of significant new products; and~~

~~the~~• ~~loss~~Exposure to unknown liabilities of ~~key~~acquired ~~management.~~companies, including unknown litigation related to acts or omissions of our acquired company and/or its directors and officers prior to the acquisition;

~~The~~• ~~equity~~Higher ~~markets~~than ~~have,~~anticipated onacquisition ~~occasion, experienced significant price~~ and ~~volume~~integration ~~fluctuations~~costs ~~that have affected the market prices for many companies’ securities~~ and that have often been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.expenses;

~~Because~~• weEffects ~~can~~of ~~issue~~costs ~~additional~~and ~~shares~~expenses of ~~our~~acquiring ~~common~~and ~~stock,~~integrating ~~our~~new ~~stockholders~~businesses ~~may~~on ~~incur~~our ~~immediate~~operating ~~dilution~~results and ~~may~~financial ~~experience further dilution.~~condition;

We• ~~are~~The ~~authorized~~difficulty ~~to issue up to 600,000,000 shares of common stock. As of June 14, 2011 there were 78,350,217 shares of our common stock issued~~ and ~~outstanding.~~expense ~~Our board~~ of ~~directors~~integrating ~~has~~ the ~~authority~~operations toand ~~cause~~personnel ~~our company to issue additional shares~~ of ~~common stock without~~ the ~~consent of any of our stockholders. Consequently, our stockholders may experience dilution in their ownership of our company in the future.~~companies;

~~Because~~• weDisruption ~~can issue up to 100,000,000 shares~~ of ~~preferred stock, preferred shareholders will have preference over~~ our ~~common~~ongoing ~~stockholders.~~business;

On• ~~October~~Diversion ~~5, 2010 we filed a Certificate~~ of ~~Amendment~~management’s totime ~~our Articles with the Secretary of State of Nevada creating 100,000,000 preferred shares with a par value of $0.001 per share. Our board of directors is authorized to prescribe the series~~ and ~~the~~attention ~~number~~away offrom the shares of each series of preferred stock and the voting powers, designations, preferences, limitations, restrictions and relative rights of the shares of each series of preferred stock. Consequently, preferred shareholders may be entitled to a higher claim on the assets and earnings than holders of our ~~common~~remaining ~~stock.~~business Noduring ~~preferred shares have been issued as of~~ the ~~date~~integration ~~of this Report.~~process;

~~Our~~• ~~stock~~Failure isto amaximize ~~penny stock. Trading of~~ our ~~stock~~financial ~~may~~and bestrategic ~~restricted~~position by the ~~Securities~~successful ~~and~~incorporation ~~Exchange~~of ~~Commission’s~~acquired ~~penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.~~technology;

~~Our~~• ~~stock is a penny stock.~~ The ~~Securities~~inability ~~and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock”~~ to beimplement ~~any~~uniform ~~equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share~~standards, ~~subject to certain exceptions. Our securities are covered by the penny stock rules~~controls, ~~which~~procedures ~~impose additional sales practice requirements on broker-dealers who sell to persons other than established customers~~ and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rulespolicies; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

44• The loss of key employees and customers as a result of changes in management; and

• The ~~Financial~~incurrence ~~Industry~~of ~~Regulatory~~amortization ~~Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our stock~~expenses.

InAs ~~addition~~a toresult ~~the~~of ~~“penny stock” rules described above,~~ the ~~Financial~~growth ~~Industry~~of ~~Regulatory~~our ~~Authority~~company, ~~which~~ we ~~refer~~may seek to asraise ~~FINRA,~~additional ~~has~~capital ~~adopted~~through ~~rules that require that in recommending~~ an ~~investment~~offering toof acommon ~~customer~~shares, apreference ~~broker-dealer~~shares ~~must~~or ~~have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers~~debt, ~~broker-dealers~~which ~~must~~may ~~make~~result ~~reasonable~~in ~~efforts~~dilution ~~to obtain information about the customer’s financial status, tax status, investment objectives~~ and/or ~~other information. Under interpretations of these rules,~~ the ~~FINRA~~issuance ~~believes that there is a high probability that speculative low priced~~ of securities ~~will not be suitable for at least some customers~~. ~~The~~As ~~FINRA~~a ~~requirements~~result, ~~make~~our itshare ~~more~~price ~~difficult~~may ~~for~~decline ~~broker-dealers~~and tothere ~~recommend that their customers buy our common stock, which~~ may ~~limit~~be ~~your~~possible ~~ability~~dilution to ~~buy and sell~~ our ~~stock~~shareholders ~~and~~if ~~have~~the anpurchase ~~adverse~~price ~~effect~~is onpaid ~~the~~in ~~market~~common ~~for~~ shares ofor ~~our~~securities convertible into common ~~stock~~shares.

~~ITEM~~In 2addition, geographic distances may make integration of businesses more difficult. ~~UNREGISTERED~~We ~~SALES~~may OFnot ~~EQUITY~~be ~~SECURITIES~~successful ~~AND~~in ~~USE~~overcoming OFthese ~~PROCEEDS~~risks or any other problems encountered in connection with any acquisitions. If realized, these risks could reduce shareholder value.

~~Disclosure~~The ~~contained~~loss ~~under~~of ~~Part~~any 1of –our significant ~~Item~~customers 2could ~~under~~adversely ~~the~~affect ~~heading~~our ~~“Outstanding~~

Filing Compare · NEXAIRA WIRELESS INC.