UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]xQuarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September  30, 2009

For the quarterly period ended June 30, 2009
[  ]oTransition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period __________ to __________

For the transition period __________ to __________

Commission File Number: 000-52374

IB3 Networks, Inc.
(Exact name of small business issuer as specified in its charter)

Nevada61-1433933
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

10 South High Street, Canal Winchester, Ohio, 43110
(Address of principal executive offices)

(614) 833-9713 x235
(Issuer’s telephone number)

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


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


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X]
x Yes     [ ]o 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 (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [  ]o  No [X]x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

[ ]
o Large accelerated filer Accelerated filer
[ ]
o Non-accelerated filer
[X]
x Smaller reporting company
 

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date 25,937,10325,728,209 common shares as of August 13,October 5, 2009.
 
 
TABLE OF CONTENTS

TABLE OF CONTENTS
Page
PART I – FINANCIAL INFORMATION
 
Item 1:
Financial Statements
3
Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
4
Item 3:
Quantitative and Qualitative Disclosures About Market Risk
7
Item 4T:
Controls and Procedures
7
PART II – OTHER INFORMATION
Item 1:
Legal Proceedings
8
Item 1A:
Risk Factors
8
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds
8
Item 3:
Defaults Upon Senior Securities
8
Item 4:
Submission of Matters to a Vote of Security Holders
8
Item 5:
Other Information
8
Item 6:
Exhibits
8
 
 
PARTPART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

Our consolidated financial statements included in this Form 10-Q are as follows:

Our consolidated financial statements included in this Form 10-Q are as follows:
F-1
F-1
Consolidated Balance Sheets as of  JuneSeptember 30, 2009 (unaudited) and December 31, 2008 (audited);
F-2
F-2
Consolidated Statements of Operations for the three and sixnine months ended JuneSeptember 30, 2009 and 2008;2008 (unaudited);
F-3
Consolidated Statements of Stockholders’ Equity (Deficit) for the period from December 31, 2007 to JuneSeptember 30, 2009;2009 (unaudited);
F-4
F-4
Consolidated Statements of Cash Flows for the sixnine months ended JuneSeptember 30, 2009 and 2008;2008 (unaudited);
F-5
F-5
Notes to Consolidated Financial Statements;


These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended JuneSeptember 30, 2009 are not necessarily indicative of the results that can be expected for the full year.

IB3 IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Consolidated Balance Sheets

  
September 30,
2009
  
December 31,
2008
 
  (Unaudited)  (Audited) 
Assets      
Current Assets      
Cash and equivalents $1,674  $13,000 
Accounts receivable, net  32,164   39,410 
Inventory  3,974   8,673 
Other current assets  14,117   3,193 
Total Current Assets  51,929   64,276 
Furniture and Equipment, net  28,008   36,474 
Other Assets        
Goodwill  269,725   269,725 
Total Other Assets  269,725   269,725 
Total Assets $349,662  $370,475 
Liabilities and Stockholders' Equity (Deficit)        
Current Liabilities        
Accounts payable and accrued expenses $955,694  $1,010,477 
Bank overdraft  2,032   - 
Payable-related party  388,652   40,741 
Notes payable-short term  33,854   58,211 
Client deposits  10,026   33,521 
Total Current Liabilities  1,390,258   1,142,950 
Long Term Liabilities        
Convertible notes payable, net of discount of $37,500  755,466   100,000 
Total Liabilities  2,145,724   1,242,950 
Stockholders' Equity (Deficit)        
Common stock: $0.001 par value; 100,000,000 shares authorized, 25,897,103 and 24,436,491 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively  25,897   24,436 
Additional paid-in capital  14,793,370   14,034,678 
Accumulated deficit  (16,615,329)  (14,931,589)
Total Stockholders' Equity (Deficit)  (1,796,062)  (872,475)
Total Liabilities and Stockholders' Equity (Deficit) $349,662  $370,475 
 
June 30,
2009
 
December 31,
2008
 (Unaudited)  
Assets   
Current Assets   
Cash and equivalents$7,960 $13,000
Accounts receivable, net 31,208  39,410
Inventory 1,230  8,673
Other current assets 27,884  3,193
Total Current Assets 68,282  64,276
      
Furniture and Equipment, net 36,990  36,474
Other Assets     
Deposits 45,088  -
Goodwill 269,725  269,725
Total Other Assets 314,813  269,725
      
Total Assets$420,085 $370,475
      
Liabilities and Stockholders' Equity (Deficit)     
Current Liabilities     
Accounts payable and accrued expenses$1,068,051 $1,010,477
Payable-related party 173,386  40,741
Notes payable-short term 33,700  58,211
Client deposits 22,157  33,521
Total Current Liabilities 1,297,294  1,142,950
Long Term Liabilities     
Convertible notes payable 780,466  100,000
Total Liabilities 2,077,760  1,242,950
      
Stockholders' Equity (Deficit)     
Common stock: $0.001 par value; 100,000,000 shares authorized, 25,937,103 and 24,436,491 shares
issued and outstanding at March 31, 2009 and December 31, 2008, respectively
 25,937  24,436
Additional paid-in capital 14,753,330  14,034,678
Accumulated deficit (16,436,942)  (14,931,589)
Total stockholders' equity (deficit) (1,657,675)  (872,475)
      
Total Liabilities and Stockholders' Equity (Deficit)$420,085 $370,475

The accompanying notes are an integral part of these financial statements.

IB3 IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Consolidated Statements of Operations
(Unaudited)

  
For the Three
Months Ended
September 30,
2009
  
For the Three
Months Ended
September 30,
2008
  
For the Nine
Months Ended
September 30,
2009
  
For the Nine
Months Ended
September 30,
2008
 
             
Net Revenue $168,715  $321,871  $730,922  $986,990 
Cost of Goods Sold  112,036   181,071   418,849   609,414 
Gross profit  56,679   140,800   312,073   377,576 
Operating Expenses                
Depreciation and amortization  4,325   5,250   14,390   16,112 
Selling, general and administrative  189,974   95,835   1,286,658   453,250 
Total operating expenses  194,299   101,085   1,301,048   469,362 
Operating Loss  (137,620)  39,715   (988,975)  (91,786)
Other Income and Expenses                
Interest expense  (40,767)  (22,341)  (68,382)  (246,338)
Other income (expense)  -   -   3,891   (52)
Total other income and expenses  (40,767)  (22,341)  (64,491)  (246,390)
Net loss before income taxes  (178,387)  17,374   (1,053,466)  (338,176)
Income tax expense  -   -   -   - 
Discontinued Operations  -   -   (630,274)  599,571 
Net Income (Loss) $(178,387) $17,374  $(1,683,740) $261,395 
Basic Earnings (Loss) Per Share                
Continuing operations $(0.01) $0.00  $(0.04) $(0.05)
Discontinued operations $-  $-  $(0.03) $0.10 
  $(0.01) $0.00  $(0.07) $0.04 
Weighted Average                
Common Shares Outstanding  25,917,103   12,345,655   25,129,519   6,239,377 
 
For the Three
Months Ended
June 30, 2009
 
For the Three
Months Ended
June 30, 2008
 
For the Six
Months Ended
June 30, 2009
 
For the Six
Months Ended
June 30, 2008
        
Net Revenue$294,917 $318,538 $562,207 $665,119
Cost of Goods Sold 151,801  197,272  306,813  428,343
Gross profit 143,116  121,266  255,394  236,776
            
Operating Expenses           
Depreciation and amortization 4,792  5,407  10,065  10,862
Selling, general and administrative 267,751  207,420  1,096,684  357,415
Total operating expenses 272,543  212,827  1,106,749  368,277
Operating Loss (129,427)  (91,561)  (851,355)  (131,501)
            
Other Income and Expenses           
Interest expense (17,968)  (175,779)  (27,615)  (223,997)
Other income (expense) 3,848  (52)  3,891  (52)
Total other income and expenses (14,120)  (175,831)  (23,724)  (224,049)
Net loss before income taxes (143,547)  (267,392)  (875,079)  (355,550)
Income tax expense -  -  -  -
Discontinued Operations (630,274)  -  (630,274)  599,571
Net Income (Loss)$(773,821) $(267,392) $(1,505,353) $244,021
            
Basic Earnings (Loss) Per Share           
Continuing operations$(0.01) $(0.01) $(0.04) $(0.01)
Discontinued operations$(0.03) $- $(0.03) $0.02
 $(0.03) $(0.01) $(0.06) $0.01
            
Weighted Average Common Shares Outstanding
 25,186,797  41,547,980  24,873,658  34,734,444

The accompanying notes are an integral part of these financial statements.

F-2
IB3 IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)

  Common Stock  Additional  Accumulated  
Total
Stockholders'
 
  Shares  Amount  Paid-in Capital  Deficit  Deficit 
                
Balance, December 31, 2007  105,537  $105  $12,739,114  $(14,972,886) $(2,233,667)
                     
Notes converted to common stock at $1.45 per share  55,125   55   79,945   -   80,000 
                     
Notes converted to common stock at $0.80 per share  333,280   333   268,417   -   268,750 
                     
Beneficial conversion feature  -   -   3,540   -   3,540 
                     
Shares issued for cash at $0.001 per share  5,300,000   5,300   -   -   5,300 
                     
Notes converted to common stock at $0.05 per share  18,642,549   18,643   943,662   -   962,305 
                     
Net income for the year ended December 31, 2008  -   -   -   41,297   41,297 
Balance, December 31, 2008  24,436,491   24,436   14,034,678   (14,931,589)  (872,475)
                     
Shares issued for services at $0.55 per share (unaudited)  1,150,000   1,150   631,350   -   632,500 
                     
Shares issued for equipment at $0.25 per share (unaudited)  -   -   -   -   - 
Shares issued for services at $0.25 per share (unaudited)  121,500   122   30,253   -   30,375 
                     
Shares issued for services at $0.25 per share (unaudited)  129,112   129   32,149   -   32,278 
                     
Shares issued for cash at $0.25 per share (unaudited)  60,000   60   14,940   -   15,000 
Beneficial conversion feature  -   -   50,000   -   50,000 
Net loss for the nine months ended September 30, 2009 (unaudited)  -   -   -   (1,683,740)  (1,683,740)
                     
Balance, September 30, 2009 (unaudited)  25,897,103  $25,897  $14,793,370  $(16,615,329) $(1,796,062)
 Common Stock Additional Accumulated  
Total
Stockholders'
 SharesAmount Paid-in Capital Deficit  Deficit
           
Balance, December 31, 2007 105,537 $105 $12,739,114 $(14,972,886)  $(2,233,667)
                
Notes converted to common stock at $1.45 per share  55  79,945  -   80,000
                
Notes converted to common stock at $0.80 per share  333  268,417  -   268,750
                
Beneficial conversion feature -  -  3,540  -   3,540
                
Shares issued for cash at $0.001 per share 5,300,000  5,300  -  -   5,300
                
Notes converted to common stock at $0.05 per share  18,643  943,662  -   962,305
                
Net income for the year ended December 31, 2008 -  -  -  41,297   41,297
                
Balance, December 31, 2008 24,436,491  24,436  14,034,678  (14,931,589)   (872,475)
                
Shares issued for services at $0.55 per share (unaudited)  1,150  631,350  -   632,500
                
Shares issued for equipment at $0.25 per share (unaudited)  40  9,960  -   10,000
                
Shares issued for services at $0.25 per share (unaudited)  122  30,253  -   30,375
                
Shares issued for services at $0.25 per share (unaudited)  129  32,149  -   32,278
                
Shares issued for cash at $0.25 per share (unaudited)  60  14,940  -   15,000
                
Net loss for the six months ended June 30, 2009 (unaudited) -  -  -  (1,505,353)   (1,505,353)
                
Balance, June 30, 2009 (unaudited) 25,937,103 $25,937 $14,753,330 $(16,436,942)  $(1,657,675)

The accompanying notes are an integral part of these financial statements.

IB3 IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Consolidated Statements of Cash Flows
(Unaudited)

  
For the Nine
Months Ended
September 30,
2009
  
For the Nine
Months Ended
September 30,
2008
 
OPERATING ACTIVITIES:      
Net income (loss) $(1,053,466) $261,395 
Discontinued operations  (630,274)  (488,071)
Add back non-cash items:        
Depreciation  14,390   16,112 
Gain on sale of fixed assets  (3,891)  52 
Amortization of discount on convertible debt  12,500   - 
Common stock issued for services  695,153   - 
Adjustments to reconcile net loss to net cash used by operating activities:        
Change in accounts receivable  7,246   5,655 
Change in other assets  (6,225)  (15,093)
Change in accounts payable and accrued liabilities  157,983   248,524 
Change in other liabilities  (23,495)  (22,850)
Net cash (used in) provided by operating activities  (830,079)  5,724 
         
INVESTING ACTIVITIES:        
Sale of fixed assets  5,860   149 
Purchase of fixed assets  (7,893)  (1,249)
Net cash provided by in investing activities  (2,033)  (1,100)
         
FINANCING ACTIVITIES:        
Cash proceeds from common stock issued        
Repayment of notes payable  (24,357)  (11,732)
Cash proceeds from notes payable  680,466   5,000 
Cash proceeds from sale of common stock  15,000   5,300 
Proceeds from related party loans  132,645   - 
Stock offering costs paid        
Proceeds from bank overdraft  2,032   - 
Repayment of notes payable        
Accrued interest on notes payable  15,000   - 
Net cash provided by financing activities  820,786   (1,432)
         
Net increase (decrease) in cash and cash equivalents  (11,326)  3,192 
Cash and cash equivalents at beginning of the year  13,000   1,373 
Cash and cash equivalents at end of the year $1,674  $4,565 
         
SUPPLEMENTAL DISCLOSURE:        
Cash paid during the year for interest $60,878  $48,359 
Cash paid during the year for income taxes $-  $- 
         
Non Cash Financing Activities        
Common stock issued for convertible debt and accrued interest $-  $348,750 
Common stock issued for services $695,153  $- 
 
For the Six Months Ended
June 30, 2009
 
For the Six Months Ended
June 30, 2008
OPERATING ACTIVITIES:   
Net income (loss)$(875,079) $244,021
Discontinued operations (630,274)  (488,071)
Add back non-cash items:     
Depreciation 10,065  10,862
Gain on sale of fixed assets (3,891)  52
Common stock issued for services 695,153  -
Adjustments to reconcile net loss to net cash used by operating activities:     
Change in accounts receivable 8,202  36,112
Change in other assets (17,248)  (7,824)
Change in accounts payable and accrued liabilities 55,074  100,567
Change in other liabilities (56,452)  116,106
Net cash (used in) provided by operating activities (814,450)  11,825
      
INVESTING ACTIVITIES:     
Sale of fixed assets 5,860  149
Purchase of fixed assets (2,550)  -
Net cash provided by in investing activities 3,310  149
      
FINANCING ACTIVITIES:     
Repayment of notes payable (24,511)  (1,218)
Cash proceeds from notes payable 680,466  5,000
Cash proceeds from sale of common stock 15,000  -
Proceeds from related party loans 132,645  -
Accrued interest on notes payable 2,500  -
Net cash provided by financing activities 806,100  3,782
      
Net increase (decrease) in cash and cash equivalents (5,040)  15,756
Cash and cash equivalents at beginning of the year 13,000  1,373
Cash and cash equivalents at end of the year$7,960 $17,129
      
SUPPLEMENTAL DISCLOSURE:     
Cash paid during the year for interest$55,468 $35,829
Cash paid during the year for income taxes$- $-
      
Non Cash Financing Activities     
Common stock issued for convertible debt and accrued interest$- $348,750
Common stock issued for equipment$10,000 $-

The accompanying notes are an integral part of these financial statements.

 
IB3 IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Condensed Notes to the Consolidated Financial Statements
JuneSeptember 30, 2009 and December 31, 2009

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at JuneSeptember 30, 2009 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2008 audited financial statements.  The results of operations for the periodperiods ended JuneSeptember 30, 2009 and 2008 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 

IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Condensed Notes to the Consolidated Financial Statements
JuneSeptember 30, 2009 and December 31, 2009

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In May 2009, the FASB issued FAS 165, “Subsequent Events”. This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires and entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company’s financial condition or results of operation.

In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets” an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance , and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company’s results of operations, financial condition or cash flows.

In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R) ”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company’s results of operations, financial condition or cash flows.

In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”. FAS 168 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.The Company does not expect the adoption of  FAS 168 to have an impact on the Company’s results of operations, financial condition or cash flows.

IB3 NETWORKS, INC.
(FKA LANGUAGE ACCESS NETWORK, INC.)
Condensed Notes to the Consolidated Financial Statements
JuneSeptember 30, 2009 and December 31, 2009

NOTE 4 – CAPITAL STOCK

As of JuneSeptember 30, 2009, the Company had 100,000,000 shares of common stock authorized and 25,937,10325,728,209 issued and outstanding.  During the six months ended JuneSeptember 30, 2009, the Company made the following issuances of common stock.

a)1,150,000 shares issued for services at $0.55 per share
b)  40,000 shares issued for equipment at $0.25 per share
c)  250,612 shares issued for services at $0.25 per share
d)  60,000 shares issued for cash at $0.25 per share in accordance with the PPM dated December 30, 2008.

NOTE 5 - RELATED PARTY TRANSACTIONS

Notes Payable-Related Party
At September 30, 2009, the Company had notes payable to a shareholder totaling $56,587. The notes payable are unsecured, accrue interest at 6% per annum and are due upon demand.

Accrued Salaries and Payroll Taxes
At September 30, 2009, the Company owes certain of its officers and directors $332,065 for accrued salaries and payroll taxes under the terms of their employment agreements.

 
Item
Item 2.     Management’s Discussion and Analysis or Plan of Operation
Management’s Discussion and Analysis or Plan of Operation

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.   These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

We are engaged in the businesses of our wholly-owned subsidiaries, iBeam Solutions, LLC (“iBeam”) and NYC Mags, Inc (“NYC Mags”). Through iBeam, a Microsoft Gold Certified Partner, we are engaged in delivering a variety of IT related solutions including scalable hosting solutions, managed hosting, dedicated hosting and Co-location, IT infrastructure, virtual help desk, managed services, staff augmentation, design and implementation of networks, security and Internet monitoring, technical support, web development, application development, database development and support,  and wireless solutions.  We are also a Cisco Certified Select Partner, and are authorized resellers of most IT related hardware and software, including Dell, APC, IBM, HP, 3COM, and many others.   iBeam Solutions has experienced a decrease in revenues due to the current economic environment.  As a direct result, we have reduced our current staff and reduced expenses  to allow us to continue operations while we seek new customers and other revenue sources.

Through NYC Mags, we are engaged in the development, promotion, and operation of our online dating social community MadisonAvenueMatch.com.  Due to the current economic environment, we have been unsuccessful in raising funding to complete the sites’ development as well as to launch of this online service.  We continue to seek funding to permit us to proceed with this project.  We have completed the initial design,received proposals and contracts to get the site operational.

Our principal executive offices are located at 10 South High Street, Canal Winchester, OH 43110. Our telephone number is (614) 833-9713.


Results of Operations for the three months Ended JuneSeptember 30, 2009 and 2008

Revenues. Revenues are generated through sales. We reported sales of $294,917$168,715 for the three months ended JuneSeptember 30, 2009, compared with revenue of $318,538$321,871 for the same period ended JuneSeptember 30, 2008.  We reported sales of $562,207$730,922 for the sixnine months ended JuneSeptember 30, 2009, compared with revenue of $665,119$986,990 for the same period ended JuneSeptember 30, 2008.  The decrease  in revenues for both periods is attributable to poor economic conditions in the overall economy causing businesses to cut back onreduce IT related projects and expenditures.

Our cost of goods sold for the three months ended JuneSeptember 30, 2009 was $151,801$112,036 resulting in gross profits of $143,116.$56,679. Our cost of goods sold for the three months ended JuneSeptember 30, 2008 was $197,272$181,071  resulting in gross profits of $121,266.$140,800.  Our cost of goods sold for the sixnine months ended JuneSeptember 30, 2009 was $306,813$418,849 resulting in gross profits of $255,394.$312,073. Our cost of goods sold for the sixnine months ended JuneSeptember 30, 2008 was $428,343$609,414 resulting in gross profits of $236,776.  We improved our$377,576.  Our gross profit percentage by increasing the fees we charged for our services.has decreased due to reduced overall revenues and decreased sales due to current economic conditions.

Operating Expenses. Our operating expenses were $272,543$194,299 for the three months ended JuneSeptember 30, 2009, compared to $212,827for$101,085 for the same reporting period ended JuneSeptember 30, 2008. Our operating expenses were $1,106,749$1,301,048 for the sixnine months ended JuneSeptember 30, 2009, compared to $368,277$469,362 for the same reporting period ended JuneSeptember 30, 2008. The increase for the nine months was primarily the result of the issuance of common stock for services valued at $695,153.

Interest Expenses. We recorded interest expenses of $17,968$40,767 for the three months ended JuneSeptember 30, 2009, compared with $175,779$22,341 for the three months ended JuneSeptember 30, 2008. We recorded interest expenses of $27,615$68,382 for the sixnine months ended JuneSeptember 30, 2009, compared with $223,997$246,338 for the sixnine months ended JuneSeptember 30, 2008. Our interest expense decreased because we converted the majority of our convertible notes payable to common stock in 2008. We expect that our interest expense will decrease even further in 2009.

Discontinued Operations. On January 16, 2008, pursuant to an acquisition agreement between the Company and Interim Support, LLC, we sold Language Access Network, LLC. in exchange for the assumption of certain liabilities contained in the Acquisition Agreement. Accordingly, the assets, liabilities and operations of Language Access Network LLC are reclassified as discontinued operations in the accompanying financial statements. We recorded a loss of $630,274$0 from discontinued operations for the three months ended JuneSeptember 30, 2009, compared to a $0 from discontinued operations for the same period ended JuneSeptember 30, 2008.  We recorded a loss of $630,274 from discontinued operations for the sixnine months ended JuneSeptember 30, 2009, compared to a gain of $599,571 from discontinued operations for the same period ended JuneSeptember 30, 2008. The gain in the sixnine months ended JuneSeptember 30, 2008 is attributable to the disposal of Language Access Network, LLC.

Net Income (Loss). We reported a net loss of $773,821$178,387 or $0.03$(0.01) per share for the three months ended JuneSeptember 30, 2009 compared with income of $267,392$17,374  or $0.01$0.00 per share for the three months ended JuneSeptember 30, 2008.  We reported a net loss of $1,505,353$1,683,740 or $0.06$(0.07) per share for the sixnine months ended JuneSeptember 30, 2009 compared with income of $244,021$261,395 or $0.01$0.04 per share for the sixnine months ended JuneSeptember 30, 2008.


Liquidity and Capital Resources

As of JuneSeptember 30, 2009, we had total current assets of $68,282.$51,929. As of JuneSeptember 30, 2009, we had total current liabilities of $1,297,294.$1,390,258. We thus had a working capital deficit of $1,229,012$1,338,329 at JuneSeptember 30, 2009.  As of September 30, 2009, we had total assets of $349,662.  As of September 30, 2009 we had total liabilities of $2,145,724 resulting in a total stockholders deficit of $1,796,062.

Net cash used by operating activities was $814,450$(830,079) for the sixnine months ended JuneSeptember 30, 2009 compared to net cash provided by operating activities of $11,825$5,724 for the sixnine months ended JuneSeptember 30, 2008. Net cash provided byused in investing activities was $3,310$(2,033) for the sixnine months ended JuneSeptember 30, 2009, as compared with net cash providedused of $149$(1,100) for the sixnine months ended JuneSeptember 30, 2008. Net cash flow provided by financing activities amounted to $806,100$820,786 for the sixnine months ended JuneSeptember 30, 2009, compared to net cash provided byused in financing activities of $3,782$(1,432) for the same period ended JuneSeptember 30, 2008.  During the sixnine months ended JuneSeptember 30, 2009, the primary factors of our cash provided by financing activities was proceeds of notes payable of $680,466 and proceeds of related party loan of $132,645.  During the sixnine months ended JuneSeptember 30, 2008, the primary factor of our cash provided by financing activities was proceeds from notes payable of $5,000.

We anticipate that we will be dependent, for the immediate future, upon additional investment capital to fund operating expenses.

Going Concern

The Company's financial statements are prepared using accounting principles   generally   accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Off Balance Sheet Arrangements

As of JuneSeptember 30, 2009, there were no off balance sheet arrangements.


Item
Item 3.     Quantitative and Qualitative Disclosures About Market Risk
Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

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Item 4T.     Controls and Procedures
Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of JuneSeptember 30, 2009.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Eric Schmidt.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of JuneSeptember 30, 2009, our disclosure controls and procedures are effective.  There have been no changes in our internal controls over financial reporting during the quarter ended JuneSeptember 30, 2009.

Disclosure 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 Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 
PART II – OTHER INFORMATION

Item
Item 1.     Legal Proceedings
Legal Proceedings

Except as follows, we are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

On July 15, 2009, iBeam Solutions, LLC, our wholly owned subsidiary, commenced an action against Data Center 101, LLC in the Court of Common Pleas of Franklin County, Ohio for Negligent Misrepresentation, Common Law Fraud, Breach of Sublease Agreement and Declaratory Relief, requesting money damages and a declaration that a sublease agreement to lease 5,000 square feet of office space located on the third floor of the building at 101 East Town Street, Columbus, Ohio  has been terminated and is of no further legal force or effect.  At this time, we cannot make any evaluation of the outcome of this litigation.  A proposal to settle this action was received from Data Center 101, LLC and is currently under evaluation by our board of directors.

Item On September 17, 2009, iB3 Networks, Inc. received a judgement against iB3 Networks, Inc. filed by Jeffrey D. Katz in the amount of $10,359.49 pursant to Mr. Katz’s claim for legal fees that resulted from the merger of NYC MAGS, Inc.  In accordance with our agreement with NYC MAGS, Inc., legal fees were to be the responsibility of each party to the merger, and this expense for the other party’s legal fees was not to be the responsibility of iB3 Networks, Inc.  This judgement was also made against Michael Jacobson, a board member of iB3 Networks, Inc., a shareholder of iB3 Networks, Inc., the seller of NYC MAGS, Inc. to iB3 Networks, Inc., and President of our NYC MAGS, Inc. wholly owned subsidiary, jointly and severably.  Michael Jacobson has filed a motion to vacate the judgement against him, and that is pending before the court.  iB3 Networks, Inc. filed a motion to vacate the judgement against it in District Court of Maryland for Montgomery County on October 9, 2009 based upon the agreement of merger agreement between the parties.  As of 11/5/2009 we received paperwork that the motion on behalf of iB3 Networks has been denied.  Consideration is being given to a possible appeal of this ruling, however the current judgement is in effect against iB3 Networks, Inc..  At this time, we cannot make any evaluation of the outcome of this potenial appeal.

Item 1A:  Risk Factors
Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended JuneSeptember 30, 2009, we issued the following shares:no equity securities:

§  
Item 3.
129,112 shares of our common stock at $0.25 per share to officers and employees of our company for services rendered.Defaults upon Senior Securities
§  60,000 shares issued for cash at $0.25 per share in accordance with the PPM dated December 30, 2008.

These shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.

Item 3.     Defaults upon Senior Securities

None

Item
Item4.     Submission of Matters to a Vote of Security Holders
Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended JuneSeptember 30, 2009.

Item
Item 5.     Other Information
Other Information

None

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Item 6.      Exhibits
Exhibits

Exhibit Number
Number
Description of Exhibit
31.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 
SIGNATURES

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

 IB3 NETWORKS, INC.
  
Date: August 26, November 11, 2009
  
 
By:
/s/ Eric Schmidt
Eric Schmidt
Title:Chief Executive Officer and Chief Financial Officer