Viper Networks (VPER) 10QSB/A 2006 Q1 Quarterly report (small business) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB/A

Amendment No. 1

(Mark one)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission File Number: 0-032939

Viper Networks, Inc.

(Exact name of registrant as specified in its charter)

Nevada	87-0140279
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
10373 Roselle Street, Suite 170 San Diego, California	92121
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (858) 452-8737

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, and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨ No x

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

The aggregate market value of the voting stock held by non-affiliates (199,266,655 shares of Common Stock) was $8,169,933 as of March 31, 2006.  The stock price for computation purposes was $0.0410. This value is not intended to be a representation as to the value or worth of the Registrant's shares of Common Stock.  The number of shares of non-affiliates of the Registrant has been calculated by subtracting shares held by persons affiliated with the Registrant from outstanding shares.  The number of shares outstanding of the Registrant's Common Stock as of March 31, 2006 was 235,378,557.

VIPER NETWORKS, INC.

FORM 10-QSB/A (Amendment No. 1) QUARTERLY REPORT

FOR THE QUARTERLY PERIOD ENDED March 31, 2006

Explanatory Note

Viper Networks, Inc. (the “Company”) is filing this amendment to its Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006 (the “Amendment”) to expand disclosures and restate the Condensed Consolidated Financial Statements in response to comments issued by and discussions with the Securities and Exchange Commission (the “SEC”).  The restated financials (Item 1) and revised document (Item 2 - Managements’ Discussion and Analysis of Financial Condition and Results of Operations; Item 3 – Factors That May Affect Future Results; and Item 4 – Controls and Procedures) address comments issued by and discussions with the SEC as relates to the Company’s Forms 10-KSB for the year ended December 31, 2005, and 10-QSB for the quarters ended March 31, 2006 and June 30, 2006.

Any reference to facts and circumstances at a “current” date refer to such facts and circumstances as of such original filing date.

TABLE OF CONTENTS

			Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)
		Basis of Presentation	4
		Report of Independent Registered Public Accounting Firm	5
		Condensed Consolidated Balance Sheets – March 31, 2006 (Unaudited) and December 31, 2005	6
		Condensed Consolidated Statements of Operations - Three months ended March 31, 2006 and 2005 (Unaudited)	7
		Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) – Three months ended March 31, 2006 (Unaudited) and Year ended December 31, 2005	8
		Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2006 and 2005 (Unaudited)	9
		Notes to Condensed Consolidated Financial Statements (Unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Factors That May Affect Future Results		24
Item 4.	Controls and Procedures		30
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings		32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32
Item 3.	Defaults Upon Senior Securities		35

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VIPER NETWORKS, INC.

FORM 10-QSB/A (Amendment No. 1) QUARTERLY REPORT

FOR THE QUARTERLY PERIOD ENDED March 31, 2006

TABLE OF CONTENTS (continued)

Page No.

PART II.  OTHER INFORMATION (continued)
Item 4.	Submission of Matters to a Vote of Security Holders	35
Item 5.	Other Information	35
Item 6.	Exhibits and Reports on Forms 8-K	35
SIGNATURE		36

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VIPER NETWORKS, INC. AND SUBSIDIARIES

PART 1.  FINANCIAL INFORMATION
ITEM 1 -	FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions for Form 10-QSB pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
The unaudited condensed consolidated balance sheet of the Company as of March 31, 2006, and the related consolidated balance sheet of the Company as of December 31, 2005, which is derived from the Company's audited consolidated financial statements, the un-audited condensed consolidated statement of operations and cash flows for the three months ended March 31, 2006 and March 31, 2005 and the condensed consolidated statement of stockholders equity for the period of December 31, 2004 to March 31, 2006 are included in this document.  These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s most recently filed Form 10-KSB.
Operating results for the quarter ended March 31, 2006 are not necessarily indicative of the results that can be expected for the year ending December 31, 2006.

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Chang G. Park, CPA, Ph. D.

t 371 E STREET t CHULA VISTA t CALIFORNIA 91910-2615t

t TELEPHONE (858)722-5953 t FAX (858) 408-2695  t FAX (858) 764-5480

t E-MAIL changgpark@gmail.com t

To the Board of Directors of

Viper Networks Inc. and Subsidiaries

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have reviewed the accompanying condensed consolidated balance sheet of Viper Networks, Inc. and Subsidiaries as of March 31, 2006, and the related condensed consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the three months then ended. These financial statements are the representation of the management of Viper Networks, Inc. and Subsidiaries

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  Because of the Company’s current status and limited operations there is substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to its current status are also described in Note 4.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Chang G. Park, CPA

_____________________

CHANG G. PARK, CPA

August 3, 2007

Chula Vista, CA 91910

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	March 31,			December 31,
	2006			2005
	(Unaudited)
ASSETS
Current assets:
Cash	$	356,718		$	33,430
Short-term investments		5,400			4,000
Accounts receivable, net of allowance for doubtful accounts and sales returns		94,681			119,039
Inventories		73,003			74,959
Other current assets		196,914			194,874
Total current assets		726,717			426,301
Property and equipment, net		186,762			179,640
Goodwill		200			149,541
Total assets	$	913,679		$	755,482
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	425,926			589,918
Accrued liabilities		97,803			84,492
Loans from related party		-			460,052
Taxes payable		4,563			3,749
Deferred revenues		203,319			185,293
Short term debt, net of beneficial conversion discount		19,812			148,438
Total current liabilities		751,423			1,471,943
Commitments and Contingencies
Stockholders equity (deficit):
Preferred stock: authorized 10,100,000 shares of $0.001 par value, -0- shares issued and outstanding		-			-
Common stock: 250,000,000 shares authorized of $0.001 par value, 235,378,557 and 151,048,582 shares   issued and outstanding as of March 31, 2006 and December 31, 2005		235,379			151,049
Additional paid-in capital		15,592,852			12,602,966
Unearned stock-based compensation		(104,567	)		(113,694	)
Treasury stock		(223,028	)		(223,028	)
Accumulated deficit		(15,260,654	)		(13,054,628	)
Accumulated comprehensive loss		(77,725	)		(79,125	)
Total stockholders’ equity (deficit)		162,256			(716,461	)
Total liabilities and stockholders’ equity (deficit)	$	913,679		$	755,482

The referenced notes are an integral part of these condensed consolidated financial statements.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended March 31,
	2006			2005
Net Revenues	$	470,545		$	946,953
Cost of revenues		404,573			924,913
Gross Margin		65,972			22,040
Operating Expenses
General and administrative		1,790,441			840,588
Bad debt expense (recovery)		14,693			(26,833	)
Equity loss from unconsolidated subsidiaries		-			46,560
Impairment of purchased intangibles		149,341			275,000
(Gain on sale) impairment of purchased assets		-			-
Total Operating Expenses		1,954,476			1,135,315
Loss from operations		(1,888,503	)		(1,113,275	)
Other income (expenses)
Realized gain on marketable securities		154,072			-
Interest expense		(472,530	)		(14,553	)
Other income (expense)		937			3
Total other income (expenses)		(317,521	)		(14,550	)
Net loss	$	(2,206,024	)	$	(1,127,825	)
Basic loss per share	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding		166,072,285			123,650,390

The referenced notes are an integral part of these condensed consolidated financial statements.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)

																									Total
	Common Stock						Additional			Stock			Unearned									Other			Stockholders’
	Shares			Amount			Paid-In Capital			Subscriptions Receivable			Stock-based Compensation			Treasury Stock			Accumulated Deficit			Comprehensive Loss			Equity (Deficit)
Balance, December 31, 2004		121,222,899		$	121,223		$	11,425,685		$	(125,000	)	$	(253,318	)	$	-		$	(11,124,943	)	$	(78,125	)	$	(34,478	)
Issuance of common stock for cash		29,185,475			29,185			1,179,036			125,000			-			-			-			-			1,333,221
Issuance of common stock for    services received		(10,386,811	)		(10,387	)		148,576			-			-			-			-			-			138,189
Cancellation of common stock upon    recision of notes payable		(554,283	)		(554	)		(150,614	)		-			-			-			-			-			(151,168	)
Conversion of notes payable and   interest		12,094,140			12,094			491,523			-			-			-			-			-			503,617
Cancellation of common stock for   settlement and termination of   acquisition		(1,375,000	)		(1,375	)		(636,125	)		-			-			-			-			-			(637,500	)
Issuance of common stock for cashless    exercise of warrants and options		862,162			862			229,566			-			-			(223,028	)		-			-			7,400
Stock-based compensation		-			-			(84,681	)		-			139,624			-			-			-			54,943
Comprehensive loss		-			-			-			-			-			-			-			(1,000	)		(1,000	)
Net loss for the year ended    December 31, 2005		-			-			-			-			-			-			(1,929,685	)		-			(1,929,685	)
Balance, December 31, 2005		151,048,582			151,049			12,602,966			-			(113,694	)		(223,028	)		(13,054,628	)		(79,125	)		(716,461	)
Issuance of common stock for cash		17,897,500			17,898			601,589			-			-			-			-			-			619,486
Issuance of common stock for   services  received		33,825,167			33,825			1,344,923			-			-			-			-			-			1,378,749
Issuance of common stock for   syndication fee		1,500,000			1,500			(1,500	)		-			-			-			-			-			-
Conversion of notes payable and   interest		31,107,308			31,107			461,973			-			-			-			-			-			493,080
Beneficial conversion of interest-in-   kind  on convertible notes		-			-			539,123			-			-			-			-			-			539,123
Stock-based compensation		-			-			43,778			-			9,127			-			-			-			52,905
Comprehensive gain		-			-			-			-			-			-			-			1,400			1,400
Net loss for quarter ended    March 31, 2006		-			-			-			-			-			-			(2,206,024	)		-			(2,206,024	)
Balance, March 31, 2006		235,378,557		$	235,379		$	15,592,851		$	-		$	(104,567	)	$	(223,028	)	$	(15,260,653	)	$	(77,725	)	$	162,257

The referenced notes are an integral part of these condensed consolidated financial statements.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2006			2005
Cash flows from operating activities:
Net loss	$	(2,206,024	)	$	(1,127,824	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		47,326			79,455
Allowance for doubtful accounts and sales returns		7,799			(51,245	)
Amortization of stock-based compensation		52,905			15,573
Beneficial conversion of interest-in-kind on convertible notes		452,161			-
Loss (gain) on sale of property and equipment		(6,812	)		675
Impairment of purchased intangibles		149,341			275,000
Equity loss from unconsolidated subsidiaries		-			46,560
(Gain) on sale of marketable securities		(154,072	)		-
Stock based compensation		1,384,725			40,045
Interest accrual		20,131			10,250
Changes in assets and liabilities:
Accounts receivable		38,804			21,923
Inventories		1,956			36,282
Prepaid expenses		1,458			61,894
Other current assets		(10,374	)		1,873
Accounts payable		(111,356	)		125,335
Accrued liabilities		16,965			24,776
Taxes payable		814			807
Deferred revenues		18,025			8,073
Net cash used in operating activities		(296,229	)		(430,548	)
Cash flows from investing activities:
Purchases of property and equipment		(57,636	)		(1,086	)
Proceeds from sale of property and equipment		10,000			8,700
Sales of marketable securities		80,089			-
Net cash used in investing activities		32,453			7,614

The referenced notes are an integral part of these condensed consolidated financial statements.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2006			2005
Cash flows from financing activities:
Proceeds from issuance of common stock		619,486			454,000
Proceeds from shareholder loans		31,990			70,000
Repayments of shareholder loans		(55,411	)		(35,595	)
Repayments of convertible loans		(9,000	)		(21,145	)
Payments on capital lease obligations		-			(1,972	)
Net cash provided by financing activities		587,065			465,287
Net increase in cash		323,288			42,353
Cash at the beginning of the period		33,430			46,957
Cash at the end of the period	$	356,718		$	89,310
Supplemental schedule of cash flow activities
Cash paid for:
Interest	$	59		$	5,449
Income taxes	$	-		$	800
Non-cash investing and financial activities:
Common stock issued in payment of services	$	1,378,749		$	351,504
Common stock issued in payment of convertible loans	$	493,080		$	(20,110	)
Common stock issued in payment of syndication fees	$	78,000		$	-

The referenced notes are an integral part of these condensed consolidated financial statements.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 1 -	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	The accompanying March 31, 2006 condensed 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 March 31, 2006 and 2005 and for all periods presented have been made. Certain information and Footnote disclosures normally included in consolidated 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 consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 2005 audited consolidated financial statements. The results of operations for periods ended March 31, 2006 and 2005 are not necessarily indicative of the operating results for the full years.
NOTE 2 -	DESCRIPTION OF THE BUSINESS
	The condensed consolidated financial statements presented are those of Viper Networks, Inc. and its wholly-owned Subsidiaries (the “Company”).
	We are striving to become a provider of Voice over Internet Protocol, or VoIP, communications products and services.  Since we began VoIP operations in 2000, we have evolved from a pioneer in selling VIPER CONNECT, a “push to talk” technology developed by ITXC, to a next generation provider of high-quality telecommunication services and technology for internet protocol, or IP telephony applications. We utilize our VoIP technology to transmit digital voice communications over data networks and the internet.
NOTE 3 -	SIGNIFICANT ACCOUNTING POLICIES
	a.  Basis of Presentation.
	The Company’s condensed consolidated financial statements are prepared using the accrual method of accounting and include its wholly-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated.  Investments in businesses which the Company does not control, but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method and are included in Investments in Unconsolidated Businesses on the condensed consolidated balance sheet.
	b.  Inventories
	Inventories are stated at the lower of cost, using the first-in first-out method, or market.  Inventory costs include international inbound freight, duty and custom fees.
	c.  Estimates
	The preparation of financial statements in conformity with generally accepted accounting principles requires the Company 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  The Company is required to make judgments and estimates about the effect of matters that are inherently uncertain.  Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.
	On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, product returns, warranties, inventory reserves, long-lived assets, income taxes,

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 3 -	SIGNIFICANT ACCOUNTING POLICIES (continued)
	c.  Estimates (continued)
	litigation, and other contingencies.  The Company bases its estimates on historical experience and various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
	d.  Property and Equipment
	Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method.  Useful lives range from three to five years for office furniture and equipment.  Additions to property and equipment together with major renewals and betterments are capitalized.  Maintenance, repairs and minor renewals and betterments are charged to expense as incurred.
	e.  Goodwill and Other Intangible Assets
	Goodwill represents the excess of the cost of businesses acquired over the fair value of the identifiable net assets at the date of acquisition.  Goodwill and intangible assets acquired in a purchase business combination and determined to have indefinite useful lives are not amortized, but instead are evaluated for impairment annually and if events or changes in circumstances indicate that the carrying amount may be impaired per Statement of Financial Accounting Standards (“SFAS”) No.142, “Goodwill and Other Intangible Assets” (“SFAS 142”).  An impairment loss would generally be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The estimated fair value is determined using a discounted cash flow analysis.  SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” (“SFAS 144”).
	f.  Long-lived Assets
	Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable per SFAS 144.  Recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the estimated fair value of the asset.  The estimated fair value is determined using a discounted cash flow analysis.  Any impairment in value is recognized as an expense in the period when the impairment occurs.
	g.  Revenue Recognition
	The Company recognizes revenues and the related costs for voice, data and other services along with product sales when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition in Financial Statements”.  Service revenue from monthly and per minute fee agreements is recognized gross, consistent with Emerging Issues Task Force (EITF) No. 99-19, “Reporting Revenues Gross as a Principal Versus Net as an Agent”, as the Company is the primary obligor in its transaction, has all credit risk, maintains all risk and rewards, and establishes pricing.  Combined product and service agreements are allocated consistent with EITF No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables”

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 3 -	SIGNIFICANT ACCOUNTING POLICIES (continued)
	g.  Revenue Recognition (continued)
	with the multiple deliverables divided into separate units of accounting.  Revenue is allocated among the separate units of accounting based on the relative fair value of the hardware (product) and minutes of calling time (service) based on published pricing.  Support and maintenance sales are recognized over the contract term.  Amounts invoiced or collected in advance of product delivery or providing services are recorded as a deferred revenue liability.
	The Company’s hardware products consist of both i) devices connected to and used in conjunction with a computer for use over any speed Internet connection (dial-up or broadband) and ii) devices used with a broadband Internet connection not requiring a computer.  Hardware products contain embedded software or firmware provided by the third party manufacture which is incidental to the product sale.  Included with each product sale are a Viper Networks VoIP calling account (“VoIP Account”) and the ability to download our proprietary dialer software/VoIP Account interface.  Our dialer software/VoIP Account interface is not sold separately; the current version is available for customers to download from our web site.
	The Company sells the routing and delivery of internet traffic which conforms with Voice over Internet Protocol to both consumers and wholesale carriers.  Consumers purchase prepaid calling time for addition to a VoIP Account either directly from the Company web site or by the purchase of a voucher from our distributor network.  Revenue from the sale of prepaid calling time to consumers or vouchers to distributors is deferred upon sale.  These deferred revenues are recognized into revenue based on the number of minutes during a call in accordance with our published calling rates.  Consumer revenue for a period is calculated by our proprietary software from information received through our network switches.  Wholesale carriers purchase bulk minutes of VoIP traffic typically billed weekly in arrears from information received through our network switches.  Other services are sold on a per use basis typically billed in arrears.
	The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.
	h.  Stock-based Compensation
	SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”) replaces SFAS No. 123 “Accounting for Stock-Based Compensation” (“SFAS 123”) and supersedes Accounting Principles Board (“APB”) Opinion No. 25 “Accounting for Stock Issued to Employees” (“APB 25”).  SFAS 123R requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees.  Prior to the January 1, 2006 adoption of SFAS 123R, the Company applied SFAS 123 which provided for the use of a fair value based method of accounting for stock-based compensation.  However, SFAS 123 allowed the measurement of compensation cost for stock options granted to employees using the intrinsic value method of accounting prescribed by APB 25, which only required charges to compensation expense for the excess, if any, of the fair value of the underlying stock at the date a stock option is granted (or at an appropriate subsequent measurement date) over the amount the employee must pay to acquire the stock.  Prior to 2006, the Company had elected to account for employee stock options using the intrinsic value method under APB 25 and provided, as required by SFAS 123, pro forma footnote disclosures of net loss as if a fair value based method of accounting had been applied.
	The Company adopted 123R in accordance with the modified prospective application and has not restated the consolidated financial statements prior to 2006 for the possible impact of 123R.  The table

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 3 -	SIGNIFICANT ACCOUNTING POLICIES (continued)
	h.  Stock-based Compensation (continued)
	below reflects the pro forma net loss and net loss per share for the three months ended March 31, 2005 deducting $61,508 in compensation costs for fair value of employee stock options.

	Three months ended March 31, 2005
Net loss:
As reported	$	(1,127,825	)
Pro forma	$	(1,189,333	)
Basic loss per share:
As reported	$	(0.01	)
Pro forma	$	(0.01	)

During the three months ended March 31, 2006 the Company recognized $43,777 for the fair value of employee stock options.  The Company estimated the fair value of each option grant at the grant date by using the Black-Scholes option pricing model with the following weighted average assumptions used for grants during the years ended December 31, 2005 and 2004; no dividend yield, expected volatility of 103.2% and 200.7%, risk-free interest rates of 4.36% and 4.43%, and expected lives of 10.0 and 10.0 years, respectively.  No options were granted during 2006.

During the three months ended March 31, 2006 and 2005, the Company recognized $1,333,898 and $26,226 and $50,646 and $53,721 of expense relating to the grant of common stock to non-employees and employees, respectively, for services which are included in the accompanying condensed consolidated statements of operations.  The value of these shares was determined based upon over the counter closing prices.

In accordance with the provisions of EITF No. 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and EITF No. 00-27 “Application of Issue No. 98-5 to Certain Convertible Instruments” the Company evaluates debt securities (“Debt”) for beneficial conversion features.  A beneficial conversation feature is present when the conversation price per share is less than the market value of the common stock at the commitment date.  The intrinsic value of the feature is then measured as the difference between the conversion price and the market value (the “Spread”) multiplied by the number of shares into which the Debt is convertible and is recorded as debt discount with an offsetting amount increasing additional paid-in-capital.  The debt discount is accreted to interest expense over the term of the Debt with any unamortized discount recognized as interest expense upon conversion of the Debt.  If a debt security contains terms that change upon the occurrence of a future event (i.e. conversion price equal to 52 week low trading low) the incremental intrinsic value is measured as the additional number of issuable shares multiplied by the commitment date market value and is recognized as additional debt discount with an offsetting amount increasing additional paid-in-capital upon the future events occurrence.  The total intrinsic value of the feature is limited to the proceeds allocated to the Debt instrument.

i.  Income Tax

Current income tax expense (benefit) is the amount of income taxes expected to be payable (receivable) for the current year.  A deferred tax asset and/or liability is computed for both the expected future impact of differences between the financial statement and tax bases of assets and

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 3 -	SIGNIFICANT ACCOUNTING POLICIES (continued)
	i.  Income Tax (continued)
	liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.  Deferred income tax expense is generally the net change during the period in the deferred income tax asset and liability.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be “more likely then not” realized in future tax returns.  Tax rate changes are reflected in income in the period such changes are enacted.
	j.  Net Loss Per Share
	Basic net loss per share is computed using the weighted average number of common shares outstanding during the periods presented.  Diluted loss per share has not been presented because the assumed exercise of the Company’s outstanding options and warrants would have been antidilutive.  Options and/or warrants will have a dilutive effect only when the average market price of the common stock during the period exceeds the exercise price of the options and/or warrants.  There were options to purchase 7,250,000 shares of common stock and 34,033,290 warrants potentially issuable at March 31, 2006 which were not included in the computation of net loss per share.
	l.  Recent Accounting Pronouncements
	In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, "Accounting Changes and Error Corrections: a Replacement of Accounting Principles Board Opinion No. 20 and FASB Statement No. 3" ("SFAS No. 154"). SFAS No. 154 requires retrospective application for voluntary changes in accounting principle unless it is impracticable to do so or another methodology is required by the standard. Retrospective application refers to the application of a different accounting principle to previously issued financial statements as if that principle had always been used. SFAS No. 154's retrospective application requirement replaces APB No. 20's ("Accounting Changes") requirement to recognize most voluntary changes in accounting principle by including in net income (loss) of the period of the change the cumulative effect of changing to the new accounting principle. This statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. SFAS No. 154 also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. The requirements are effective for accounting changes made in fiscal years beginning after December 15, 2005 and will only impact the consolidated financial statements in periods in which a change in accounting principle is made.  The implementation of SFAS No. 154 did not have a material impact on our financial position, results of operations or cash flows.
NOTE 4 -	GOING CONCERN
	The Company’s condensed consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred a loss from inception on September 14, 2000 through March 31, 2006, resulting in an accumulated deficit of $15,260,654 at March 31, 2006, that raises doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
	It is the intent of management to continue to develop its voice and data services to Web-based customers and expand its Voice over Internet Protocol networks for businesses, institutions, and Internet Service Providers (ISP).

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 5 -

SIGNIFICANT EVENTS

On February 9, 2007, the Company exchanged certain short term unsecured promissory notes with current and former officers of the Company for unsecured twelve month convertible promissory notes with variable interest equal to the greater of the monthly market yield on 1-year constant maturity U.S. Treasury securities or the noteholders cost of funds.  Each of the notes, at the option of each noteholder, are convertible, in whole or part, into shares of the Company’s common stock at a percentage of the preceding 52-week low trading range of the Company’s publicly traded common stock price.  The potential beneficial conversion feature of the notes is recognized as debt discount and is accreted over the term of the notes as interest-in-kind.

Noteholder	Amount		Conversion Factor
John Castiglione	$	59,327	100% of the 52-week low trading range
Farid Shouekani, President and CEO	$	367,812	50% of the 52-week low trading range
Jason Sunstein	$	37,057	100% of the 52-week low trading range
Ronald Weaver, Chairman	$	68,285	100% of the 52-week low trading range
	$	532.481

On February 14, 2006, the Company signed a three year lease commencing March 15^th for 4,000 square feet of office space in Troy, Michigan for an East Coast sales office and to consolidate inventory, order fulfillment, and technical support.  First year monthly rental payments are $2,650 increasing to $3,170 and $4,170 in the second and third years.  Subsequently, on May 3, 2006 the Company signed a sublease agreement for 80% (3,343 square feet) of its San Diego office under terms equal to its master lease obligation for the remainder of the lease term.

On February 16, 2006, Ron Weaver and Farid Shouekani elected to convert the entire balance ($72,294) and $90,877of their convertible promissory notes into 2,409,822 and 4,190,178 shares of the Company’s Common Stock in accordance with the terms of the notes, respectively.  Also on February 16, 2006, Yale Wong was issued 1,355,406 shares of the Company’s Common Stock as full payment of his short term unsecured note ($40,662).

During February the Board of Directors approved, in principal, a compensation arrangement for Farid Shouekani, CEO, which would allow him to receive 10,000,000 shares of common stock for past services and as a retention incentive.  The Company does not have a sufficient number of authorized but unissued shares of common stock to complete the transaction.  Currently, the Company is exploring the possibility of designating a Series A Preferred Stock from the amount of authorized but unissued Preferred Stock for this purpose.  The Company anticipates that the Series A Preferred Stock will include a provision which will convert the Series A Preferred Stock into shares of the Company's common stock at such time as there are a sufficient number of authorized but unissued shares.  The exact form of this arrangement is subject to further discussion by the Board of Directors.

On March 1, 2006, Farid Shouekani elected to convert an additional $289,398.78 of his convertible promissory note into 23,151,902 shares of the Company’s Common Stock in accordance with the terms of the note.

On March 31, 2006, the Company issued 31,058,500 shares on common stock to seven individuals in Saudi Arabia for services within the Middle East to provide market analysis, develop business plans, establish distribution channels, engineering and other local support, and to assist in obtaining local licenses.

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 5 -	SIGNIFICANT EVENTS (continued)
	On April 5, 2006, the Company signed a twelve month consulting agreement with J2 Capital Management for strategic advisory services and marketing, advertising, and public relations services in exchange for 2,500,000 shares of the Company’s common stock.
	On April 30, 2006, the Company signed two twelve month consulting agreements with Pasadena Capital Partners, LLC and BlueWave Advisors, LLC for the development and implementation of a marketing and an investor awareness programs and for turn-key services as the Company’s in-house investor relations in exchange for an aggregate of 2,750,000 shares of the Company’s common stock.
	During June the Board of Directors approved, in principal, a compensation arrangement for Ron Weaver, Chairman of the Board, which would allow him to 1,000,000 shares of common stock for past services and as a retention incentive.  The Company does not have a sufficient number of authorized but unissued shares of common stock to complete the transaction.  Currently, the Company is exploring the possibility of designating a Series A Preferred Stock from the amount of authorized but unissued Preferred Stock for this purpose.  The Company anticipates that the Series A Preferred Stock will include a provision which will convert the Series A Preferred Stock into shares of the Company's common stock at such time as there are a sufficient number of authorized but unissued shares.  The exact form of this arrangement is subject to further discussion by the Board of Directors.
NOTE 6 -	RESTATEMENT
	The accompanying unaudited condensed consolidated financial statements as of March 31, 2006, have been restated as of August 7, 2007.
	The restatement includes additional interest expense, debt discount, and disclosures regarding the beneficial conversion feature of unsecured convertible promissory notes (Balance Sheet, Statements of Operations, Statements of Stockholder’s Equity (Deficit), Statements of Cash Flows, and footnote 3-h and 5); compensation expense and disclosures regarding fair value of employee stock options (Statements of Operations, Statements of Stockholder’s Equity (Deficit), Statements of Cash Flows, and footnote 3-h); and revenue recognition disclosure (footnote 3-g).
	The following is a summary of the effects of the restatement:

Condensed Consolidated Balance Sheets
	March 31, 2006  (Unaudited)			December 31, 2005
Additional paid-in capital:
As originally reported	$	15,009,951		$	12,602,966
Effect of restatement		582,901			-
As restated	$	15,592,852		$	12,602,966
Accumulated deficit:
As originally reported	$	(14,764,715	)	$	(13,054,628	)
Effect of restatement		(495,939	)		-
As restated	$	(15,260,654	)	$	(13,054,628	)

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VIPER NETWORKS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 6 - RESTATEMENT (continued)

Condensed Consolidated Balance Sheets (continued)
	March 31, 2006  (Unaudited)		December 31, 2005
Total stockholders’ equity (deficit):
As originally reported	$	75,294	$	(716,461	)
Effect of restatement		86,962		-
As restated	$	162,256	$	(716,461	)

Condensed Consolidated Statements of Operations (Unaudited)
	Three Months Ended March 31,
	2006			2005
Total operating expenses:
As originally reported	$	1,910,698		$	1,102,968
Effect of restatement		43,778			32,347
As restated	$	1,954,476		$	1,135,315
Total other income (expenses):
As originally reported	$	134,640		$	(14,550	)
Effect of restatement		(452,161	)		-
As restated	$	(317,521	)	$	(14,550	)
Net loss:
As originally reported	$	(1,710,086	)	$	(1,095,478	)
Effect of restatement		(495,938	)		(32,347	)
As restated	$	(2,206,024	)	$	(1,127,825	)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BASIS OF DISCUSSION AND ANALYSIS

The Company’s discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures of contingent liabilities.  On an ongoing basis, management evaluates its estimates, including those that relate to income tax contingencies, revenue recognition, and litigation.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Although we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.   If actual results significantly differ from management's estimates, the Company's financial condition and results of operations could be materially impaired.

FORWARD-LOOKING STATEMENTS

This Form 10-QSB contains forward-looking statements.  Forward-looking statements are statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying (express or implied) assumptions and other statements which are other than historical facts.  In some cases forward-looking statements can be identified by the use of forward-looking words such as “believes”, “expects”, "ma,", "will", "should", "could", "intends", "plan,", "anticipates", "contemplates", "estimates", "predicts", "projects", and other similar terminology or the negative of these terms or by discussions of plans or strategy that involve risks or uncertainties Management wishes to caution the reader that these forward-looking statements including, but not limited to, statements regarding the Company’s marketing –plans, goals, competitive and technology trends, and other matters that are not historical facts are only predictions.  No assurances can be given that such predictions will prove correct or that the anticipated future results will be achieved.  Actual events or results may differ materially either because one or more predictions prove to be erroneous or as a result of other risks facing the Company.  Forward-looking statements should be read in light of the cautionary statements and important factors described in this Form 10-QSB, including, but not limited to, the Sections titled “The Factors That May Affect Future Results” shown as Item 3 and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.  The risks include, but are not limited to, the risks associated with an early-stage company that has only a limited history of operations, the comparatively limited financial resources of the Company, the intense competition the Company faces from other established competitors, technological changes that may limit the ability of the company to market and sell its products and services or adversely affect the pricing of these products or services, and management that has only limited experience in developing systems and management practices.  Any one or more of these or other risks could cause actual results to differ materially from the future results indicated, expressed, or implied in such forward-looking statements.  We undertake no obligation to update or revise any forward-looking statement to reflect events, circumstances, or new information after the date of this Form 10-QSB or to reflect the occurrence of unanticipated or other subsequent events, and we disclaim any such obligation.

RESULTS OF OPERATIONS

Organization of Business; Presentation of Results

The Company provides VoIP communication products and services both to consumer and wholesale customers.  Through our consumer operations we sell 1) third-party hardware products directly and indirectly to consumer end users (both residential and commercial) that enable these customers to place VoIP telephone calls over our networks, and 2) services based on individual prepaid customer accounts and the ability to purchase additional prepaid calling time through our automated, on-line system (“Consumer Operations”).  We also provide software which enables call origination, account management, call routing and billing so that per-call revenue can be calculated and charged to the customers’ prepaid account.  Through our wholesale activity we both buy and sell network capacity to and from other VoIP providers for specific destinations around the world (“Wholesale Operations”).  Thus, we attempt to better utilize the capacity in our network by selling unused capacity to

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competitors, and expand our termination footprint by contracting for the termination of our customer’s calls to destinations where we do not have our own servers.  Our Wholesale Operations were born from the activities in our acquisitions of Mid-Atlantic and Adoria.

Comparison of Three Month period Ended March 31, 2006 and March 31, 2005

During the three months ended March 31, 2006, the Company recorded $470,545 in Net revenues. This was a $476,408 decrease (-50%) compared to the three months ended March 31, 2005 when we recorded $946,953 in Net revenue.  The decrease in Net revenues consisted of a $26,080 (-16%) decrease in Consumer Operations and a $450,328 (-57%) decrease in Wholesale Operations.  The decrease in revenue from Wholesale Operations resulted from an intentional shift in emphasis away from the former Mid-Atlantic operations ($220,324 in the first Quarter of 2005 vs. $28,392 in the same three months of 2006), coupled with the curtailment of available business caused by cash flow restrictions.

During the three months ended March 31, 2006, the Company’s Cost of revenues (“COGS”) was $404,573, which resulted in a Gross margin (“GM”) as a percentage of Net revenues of approximately 14%. This compares to the three months ended March 31, 2005 when our COGS was $924,913, which resulted in a GM of approximately 2.3%.  Consumer Operations COGS in the first three months in 2005 was 85.3% of Net revenues ($138,870 vs. $162,816, respectively); in the same period during 2006 COGS increased to 90.6% for Consumer Operations activities ($123,879 COGS vs $136,736 Net revenues).  For our Wholesale Operations, COGS improved as we de-emphasized the former Mid-Atlantic operations which have traditionally seen tighter margins.  Wholesale Operations GM for the period improved from a 0.2% loss in 2005 (-$1,906) to a 15.9% Gross profit in 2006 ($53,115).  These factors resulted in a tripling of Gross Profit for the Company, improving from $22,040 in 2005 (2.3%) to $65,972 in 2006 (14%) for comparable periods.  The Company expects these trends to continue for the remainder of the year.

During the three months ended March 31, 2006 the Company incurred $1,790,441 in General and administrative (“G&A”) expenses. This compares to the three months ended March 31, 2005 when we incurred $840,588 in G&A expenses.  Consumer Operations (including corporate overhead) G&A expenses in the three months ended March 31, 2005 totaled $597,787 (367% compared to revenues of $162,816); during the same period in 2006 these expenses more than doubled to $1,603,190, or 1172% of Consumer Operations revenue.  The Company incurred a one-time non-cash charge of $1,273,398 for services by seven individuals to evaluate the Middle East market, develop a business plan, and establish distribution and support channels.  Excluding this non-cash charge Consumer Operations G&A expenses were reduced $267,995 or a 45% reduction from the same period in 2005.  Simultaneously, Wholesale Operations G&A expenses decreased by 23% from $242,801 in the first three months of 2005 (31% of revenues) to $187,251 in the same period in 2006 (56% of revenues).  These results led to an overall increase of 113% in G&A expenses for the first three months of 2006 compared to the same period in 2005.  Overall, G&A expenses were primarily made up of wages and salaries, business consulting services, office expenses, fees and costs incurred for legal and accounting services, and other administrative costs.

During the three months ended March 31, 2006 the Company had Bad debt expense of $14,693 compared to the three months ended March 31, 2005, when we had a recovery of $26,833 in Bad debt.  During the three months ended March 31, 2005 we recorded an Equity loss from unconsolidated subsidiaries of $46,560; there is no comparable activity in 2006 following the June 2005 settlement agreement and release which terminated the Company’s 50% ownership in the Brasil LLC venture.  In addition, during the three months ended March 31, 2006 we recorded a charge of $149,341 for Impairment of purchased intangibles compared to the three months ended March 31, 2005, when we recorded a charge of $275,000.  The Impairment of purchased intangibles recognized during the three months ended March 31, 2006 and 2005 resulted from the annual evaluation of purchased intangibles based on the discounted cash flow analysis of Mid-Atlantic ($94,341 and $244,000, respectively) and Adoria ($55,000 and $31,000, respectively).

During the three months ended March 31, 2006, we realized a Loss from operations of $1,888,503 compared to a Loss from operations of $1,113,275 during the three months ended March 31, 2005.  The adverse change of -$775,228, or 70% on a period-to-period basis, was due primarily to the non-cash General and administrative expenses discussed above offset in part by cash reductions in General and administrative expenses and improved Gross margin.

During the three months ended March 31, 2006, we recognized a $154,072 gain from the sale of 224,799 shares of NextPhase Wireless, Inc. (“NextPhase”) common stock to the public and 250,000 shares in private transactions in exchange for services.  This compares to the three months ended March 31, 2005 when we had no

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similar gains or loses.  During the three months ended March 31, 2006, we incurred Interest expense of $472,530 compared to $14,553 in Interest expense during the three months ended March 31, 2005.  The increase in Interest expense occurred from 1) $452,161 of non-cash expense for accreted interest-in-kind from the potential beneficial conversion feature (debt discount) of the February 2006 unsecured convertible notes and 2) increased borrowings from related parties.

As a result, during the three months ended March 31, 2006 we had a Net loss of $2,206,024 compared to the three months ended March 31, 2005, when we had a Net loss of $1,127,825 (an adverse change of $1,078,199).  Consumer Operations experienced a Net loss of $2,048,682 (1,498 % of revenues), an adverse change of $1,132,103 (or -124%) compared to a Net loss in the comparable period in 2005 of $916,579.  Wholesale Operations experienced a Net loss of $157,342 (47% of revenues), an improvement of $53,904 compared to the $211,246 Net loss for the same period in 2005 (27% of revenues).  The increase in Net loss during the three months ended March 31, 2006 compared to the three months ended March 31, 2005 is the result of the discussions above, notable from the benefit of improved Gross margin and the Realized gain on marketable securities (NextPhase) ($154,072) offset by increased General and administrative and $452,161 of accreted interest-in-kind from the potential beneficial conversion feature of the unsecured convertible notes.

Basic loss per share for the three months ended March 31, 2006 was -$0.01, unchanged from the same period in 2005.  During the three months ended March 31, 2006, the Company had 166,072,285 Weighted average shares outstanding.  By comparison, during the three months ended March 31, 2005 the Company had 123,650,390 Weighted average shares outstanding.

IMPACT OF INFLATION

Because of the nature of its services, the Company does not believe that inflation had a significant impact on its sales or profits.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2006, we had $356,718 in Cash. At the same time, we had $94,681 in Net accounts receivable, $73,003 in Inventories, and $196,914 in Other current assets for $726,717 in Total current assets.  In contrast, as of March 31, 2006 our Total current liabilities were $751,423, which consisted primarily of the following material amounts: $425,926 in Accounts payable, $97,803 in Accrued liabilities, $203,319 in Deferred revenues, and $19,812 in Short term debt (net of $80,320 in unamortized debt discount).

During the three months ended March 31, 2006, our cash needs were met primarily by the sale of common stock, loans from certain of our shareholders, and the sale of stock holdings in NextPhase owned by the Company (see discussion below).  We cannot be assured that we can continue to obtain funds from these or any other sources to meet our need for additional capital resources.

Net working capital as of March 31, 2006 was negative -$27,706, an improvement compared to negative -$936,246 for the same period in 2005.  Overall, the company’s access to capital is very limited.  The Company continually evaluates its cash needs and anticipates seeking additional equity or debt financing in order to achieve its overall business objectives.  However, no commitment for additional financing has been obtained and there can be no assurance that such financing will be available, or, if available, at a price or in a form that is acceptable to the Company.  We may be limited to 1) loans and other cash infusions from officers, directors, existing stockholders, and persons affiliated or associated with one or more of them or 2) the sale of the Company’s investment in NextPhase subject to the occurrence of future events as noted below.  In addition, if any financing should be obtained, existing stockholders will likely incur substantial, immediate, and permanent dilution of their existing investment.  Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have an adverse impact on the Company’s ability to achieve its business objectives.

NextPhase Wireless, Inc. is trading on the OTC BB under the symbol NXPW.  Incorporated in September, 2000 as a 100% owned subsidiary of the Company, NextPhase remained operationally dormant until May, 2004.  At that time the Company elected to concentrate its efforts into its core VoIP business activities. The non-VoIP technologies - that were never developed, were deemed to be of no value, and into which the Company had no intention of investing time or funds - were then assigned to the NextPhase subsidiary in anticipation of spinning it off as a separate entity.  In this way, the Company hoped through the spinoff some value might be obtained from what otherwise would have remained worthless.  The asset assignment and spinoff was accomplished by Resolution of the Board of Directors of the Company; no formal purchase and sale agreement existed.

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One officer of the Company, believing he could create and implement a viable business model within NextPhase, then terminated his employment with Viper and became an officer of NextPhase.  Concurrent with the spinoff, NextPhase issued additional common shares to this officer and to several other NextPhase employees that had the effect of diluting Vipers’ share of ownership to 40% (4,000,000 shares).

From that point forward NextPhase pursued its own business opportunities independent to those of the Company, except that in 2004 all holders of NextPhase common stock, including the Company, pledged their shares as collateral for a loan NextPhase sought, the proceeds of which were used by NextPhase to purchase a publicly trading entity (Edison Renewables, Inc).  That loan has been repaid in full and the pledged shares have been released from the Pledge Agreement.

NextPhase was and continues to be a separate legal entity not related to the Company other than through the Company’s equity ownership.  None of the management of the Company have any operational position within NextPhase nor as members of it’s Board of Directors.

The 4,000,000 shares of NextPhase common stock were pledged (“Pledged Stock”) as collateral on behalf of NextPhase for a $350,000 promissory note (“Note”) issued in connection with the acquisition of the public shell.  In early May 2005, the Note was paid in full and the Pledged Stock was released to the Company.   In August, 2005 the Company requested an exemption (as noted below) to commence selling shares of the NextPhase “restricted” common stock to raise capital for the Company.

During the period ending March 31, 2006, the Company sold 224,799 shares of NextPhase in the public market and exchanges 250,000 shares in private transactions in payment of services.  Aggregate proceeds from the public sale equaled $80,089.  On March 31, 2006 the Company holds 1,423,934 shares of NextPhase common stock

The term “restricted” refers to common stock represented by certificate(s) that have not been registered under the Securities Act of 1933, as amended (the “Act”), or under certain state securities laws.  No public sale or transfer of these shares may be made in the absence of (a) an effective registration statement under the Act or (b) an opinion of counsel acceptable to the issuing company that registration under the Act or under applicable state securities laws is not required (an exemption) in connection with such proposed sale or transfer.  An exemption is typically limited to i) stock owned for a minimum of twelve months and ii) a maximum number of shares to be offered for sale, during any rolling three month period, limited to 1% of the issuing company’s total number of shares issued and outstanding.

The Company has been cash negative since inception, and is not expected to become cash neutral or cash positive until revenues grow significantly in the VoIP operation (at the earliest, by the end of 2006).  Until this time, the Company will depend on outside cash sources – mainly new equity sales.  Cash on hand as of March 31, 2006 is insufficient to support the needs of the Company for more than a very short period of time.  To support operational needs and to implement the business plan the Company will need to raise significant additional capital; without such additional capital the Company cannot grow or continue as it is currently constituted.  As of March 31, 2006, the Company expects that it will need at least $2,050,000 to cover its anticipated operating expenses for the twelve month period thereafter.   Of this, approximately 59% is for projected salary and payroll related expenses, 13% for projected lease and facility related expenses, and 11% for projected professional services expenses.

CRITICAL ACCOUNTING POLICIES

The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, requires us 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 periods. We are required to make judgments and estimates about the effect of matters that are inherently uncertain. .Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.

On an on-going basis, we evaluate our estimates, including, but not limited to, those related to bad debts, product returns, warranties, inventory reserves, long-lived assets, income taxes, litigation, and other contingencies. We base our estimates on historical experience and various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

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The Company recognizes revenues and the related costs for voice, data and other services along with product sales when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured, in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition in financial Statements”. Service revenue from monthly and per minute fee agreements is recognized gross, consistent with Emerging Issues Task Force (“EITF”) No. 99-19 “Reporting Revenues Gross as a Principal Versus Net as an Agent”, as the Company is the primary obligor in its transaction, has all credit risk, maintains all risk and rewards, and established pricing.  Combined product and service agreements are allocated consistent with EITF No. 00-21 “Accounting for Revenue Arrangements with Multiple Deliverables” with the multiple deliverables divided into separate units of accounting.  Revenue is allocated among the separate units of accounting based on the relative fair value of the hardware (product) and minutes of calling time (service) based on published pricing.   Support and maintenance sales are recognized over the contract term.  Amounts invoiced or collected in advance of product delivery or providing services are recorded as a deferred revenue liability.

The Company’s hardware products consist of both i) devices connected to and used in conjunction with a computer for use over any speed Internet connection (dial-up or broadband) and ii) devices used with a broadband Internet connection not requiring a computer.  Hardware products contain embedded software or firmware provided by the third party manufacture which is incidental to the product sale.  Included with each product sale are a Viper Networks VoIP calling account (“VoIP Account”) and the ability to download our proprietary dialer software/VoIP Account interface.  Our dialer software/VoIP Account interface is not sold separately; the current version is available for customers to download from our web site.

The Company sells the routing and delivery of internet traffic which conforms with Voice over Internet Protocol to both consumers and wholesale carriers.  Consumers purchase prepaid calling time for addition to a VoIP Account either directly from the Company web site or by the purchase of a voucher from our distributor network.  Revenue from the sale of prepaid calling time to consumers or vouchers to distributors is deferred upon sale.  These deferred revenues are recognized into revenue based on the number of minutes during a call in accordance with our published calling rates.  Consumer revenue for a period is calculated by our proprietary software from information received through our network switches.  Wholesale carriers purchase bulk minutes of VoIP traffic typically billed weekly in arrears from information received through our network switches.  Other services are sold on a per use basis typically billed in arrears.

The Company accrues for warranty costs, sales returns, bad debts and other allowances based on its historical experience.

The Company’s property and equipment and purchased intangible assets represent a significant component of our consolidated assets.  Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method.  Useful lives range from three to five years for office furniture and equipment.  Additions to property and equipment together with major renewals and betterments are capitalized.  Maintenance, repairs and minor renewals and betterments are charged to expense as incurred.

Goodwill represents the excess of the cost of businesses acquired over the fair value of the identifiable net assets at the date of acquisition.  Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful lives are not amortized, but instead are evaluated for impairment annually and if events or changes in circumstances indicate that the carrying amount may be impaired per Statement of Financial Accounting Standards (“SFAS”), No.142, “Goodwill and Other Intangible Assets” (“SFAS 142”).  An impairment loss would generally be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The estimated fair value is determined using a discounted cash flow analysis.  SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” (“SFAS 144”).

Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable per SFAS 144, “Accounting for Impairment or Disposal of Long-Lived Assets”.  Recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the

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estimated fair value of the asset.  The estimated fair value is determined using a discounted cash flow analysis.  Any impairment in value is recognized as an expense in the period when the impairment occurs.

Changes in the remaining useful lives of assets as a result of technological change or other changes in circumstances, including competitive factors in the VoIP market, can have a significant impact on asset balances, recoverability, or depreciation expense. There is inherent subjectivity involved in estimating discounted future cash flows, which can have a material impact on the amount of any impairment.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 154, "Accounting Changes and Error Corrections: a Replacement of Accounting Principles Board Opinion No. 20 and FASB Statement No. 3" ("SFAS 154").  SFAS 154 requires retrospective application for voluntary changes in accounting principle unless it is impracticable to do so or another methodology is required by the standard. Retrospective application refers to the application of a different accounting principle to previously issued financial statements as if that principle had always been used. SFAS 154's retrospective application requirement replaces APB No. 20's ("Accounting Changes") requirement to recognize most voluntary changes in accounting principle by including in net income (loss) of the period of the change the cumulative effect of changing to the new accounting principle. This statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. SFAS 154 also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. The requirements are effective for accounting changes made in fiscal years beginning after December 15, 2005 and will only impact the consolidated financial statements in periods in which a change in accounting principle is made.  The implementation of SFAS 154 did not have a material impact on our financial position, results of operations or cash flows.

ITEM 3.  FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company’s business organization, the Company’s reliance upon certain technology and third parties, competitive trends in the marketplace, ever-changing technology, domestic and international regulatory changes, and other factors all involve elements of substantial risk. In many instances, these risks arise from factors over which the Company will have little or no control. Some adverse events may be more likely than others and the consequence of some adverse events may be greater than others. No attempt has been made to rank risks in the order of their likelihood or potential harm. In addition to those general risks enumerated elsewhere, any purchaser of the Company's Common Stock should also consider the following factors.

1. Continued Operating Losses.

The Company has incurred $2,206,024 in losses during the three months ending March 31, 2006 and cumulative losses of $15,260,654 since the Company’s inception through March 31, 2006. The Company may well incur significant additional losses in the future as well and there can be no assurance that the Company will be successful or that it will be profitable in the future.

2. Current Financial Structure, Limited Equity, Limited Working Capital & Need for Additional Financing.

While the Company’s management believes that its financial policies have been prudent, the Company has relied, in large part, upon the use of common stock financing to provide a substantial portion of the Company’s financial needs. The Company anticipates that it will need to raise significant additional capital to implement is business plan. This dependence upon common equity financing has meant that we are reliant upon the price of our common stock in the public markets, which has dramatically declined over the past two years and there can be no assurance that the price of our common stock will recover. In addition, we have had only limited discussions with potential investors and there can be no guarantee that the Company will receive additional capital from any investors or, if it does receive sufficient additional capital, that it can obtain additional capital on terms that are reasonable in light of the Company’s current circumstances. We have limited equity and limited working capital. Further, the Company has not received any commitments or assurances from any underwriter, investment banker, venture capital fund, or other individual or institutional investor.

3. Auditor's Opinion: Going Concern.

The Company’s independent auditors, Chang G. Park, CPA, Ph.D., have expressed substantial doubt about the Company's ability to continue as a going concern since the Company is an early-stage company and there exists only a limited history of operations and has continued operating losses.

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4. Subordinate to Existing and Future Debt & Authorized But Unissued Preferred Stock.

All of the Common Stock is subordinate to the claims of the Company's existing and future creditors and the holders of the Company's existing preferred stock and any that may be issued in the future.

5. Outstanding Debt and Stock Purchase Warrants to Current and Former Management.

In August of 2005, we entered into agreements with certain of our current and former officers and directors. Under the terms of these agreements, these individuals returned an aggregate of 16,500,000 shares of our common stock previously awarded as bonuses in connection with their prior employment with the Company and in exchange, we issued an aggregate of 16,500,000 common stock purchase warrants. In addition, the existing short term unsecured promissory notes with these officers were amended to include certain unpaid salaries, benefits, previous salary deferrals, and unpaid expenses within the existing notes. The warrants grant the holder the right to purchase our common stock at an exercise price of $0.25 per share and the warrants do not expire until August 26, 2009. In February of 2006, the short term unsecured promissory notes were exchanged for unsecured twelve month convertible promissory notes with variable interest equal to the greater of the monthly market yield on 1-year constant maturity U.S. Treasury securities or the noteholders cost of funds.  Each of the notes, at the option of each noteholder, are convertible, in whole or part, into shares of the Company’s common stock at a percentage of the preceding 52-week low trading range of the Company’s publicly traded common stock price. While the Company believed at the time the issuance of the warrants and the exchange of the notes served to support the Company’s plans, the terms of the notes and the warrants may limit the ability to raise additional capital. Further, while the transactions involve the return of shares previously issued in connection with the Company’s payment of employment bonuses and unpaid accrued salaries, the Company did not undertake any evaluation of whether the transactions do not expose the Company to potential claims under the California Labor Code and other state employment rules and regulations.

6. Conflicts of Interest.

As a small company, we are dependent, from time to time, upon one or more our officers and directors to assist us in meeting our financial obligations. In some cases, we may enter into an agreement with an officer or director who assists us in completing one or more transactions or in providing us with financing or other services. These transactions involve a conflict of interest. A conflict of interest arises whenever a party has an interest on both sides of a transaction. While we believe that we have and will continue to enter into such agreements with officers and directors on terms that are no different than that which we can obtain from independent third parties, there can be no assurance that we will always be successful in these efforts or that we can successfully resolve conflicts of interest to fully satisfy our obligations to our Company and our stockholders.

7. Dependence & Reliance Upon Others.

Some of our products and services may rely upon hardware, software, and communications systems provided by others. For this reason we may become dependent upon third parties which may materially and adversely affect our ability to offer distinct products and services which may result in adverse pricing pressures on our products with resulting adverse impact on our profits, if any.

8. Recent Acquisitions & Limited History of Operations.

During the fiscal year ending December 31, 2005, we generated $3,482,549 in net revenues, primarily through our acquisition of Coliance and Mid-Atlantic in 2003 and our acquisition of Adoria in 2004. We will need to further increase our revenues and successfully develop and implement our business strategy in an ever-changing and challenging marketplace if we are to succeed. In the event that we are not able to successfully develop and implement our business strategy, we may be subject to continuing significant risks and resulting financial volatility. Our limited history and the continuing technological and competitive challenges that we face are beyond our ability to control. For these and other reasons we may incur continuing and protracted losses with the result that an investor may lose all or substantially all of their investment.

9. Matter of 911 and Emergency Calling Services and Exposure to Liability.

Both our emergency calling service and our E911 calling service are different, in significant respects, from the emergency calling services offered by traditional wireline telephone companies. In each case, those differences may cause significant delays, or even failures, in callers’ receipt of the emergency assistance they need. Traditional wireline telephone companies route emergency calls over a dedicated infrastructure directly to an emergency services dispatcher at the public safety answering point, or PSAP, in the caller’s area. Generally, the dispatcher automatically receives the caller’s phone number and actual location information. While our system being deployed is designed to route calls in a similar fashion to traditional wireline services, our 911 services are not yet available in all locations. Further to the extent that it is not available in a specific location or to the extent that a caller

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experiences delays in obtaining and accessing emergency calling services, we may face significant liability.

10. Matter of National Security Agency and Potential Liability.

As a provider of telephone services, our company may be asked to provide information regarding our customer telephone records to the National Security Agency (NSA) and governmental agencies in connection with efforts taken by these agencies to fight the war against terror. In the event that we assist the NSA and other agencies in providing such information, we may be exposed to potential liability in violating the privacy rights of our customers. We may also face the loss of revenues and customer good will.

11. Decreasing Pricing Trends. 

Domestic and international telecommunications prices continue to decrease and we anticipate that this trend will continue. Further, users who select our services may switch to the services offered by our competitors to take advantage of lower priced services offered by them. Such continued competition or continued price decreases may require us to lower our prices to remain competitive. This will serve to reduce our revenue and lead to loss of customers or a decrease in our growth and may delay or prevent us from achieving profitability.

12. Consumer Acceptance of VoIP Technology and Competitive Issues.

The market for VoIP services continues to grow and develop. While we believe that a significant portion of this growth is due to customers who are “early adopters,” as this market segment utilizes VoIP services in larger numbers, if we are to achieve any growth in revenues, we will likely incur higher marketing expenses in attracting customers from other segments. For these reasons, we may experience lower growth and higher expenses than our larger competitors. Further, our larger competitors have entered into co-marketing agreements with other technology and internet companies and, in other cases, they are offering VoIP services bundled with other internet services that we do not offer and have no ability to offer. These and other competitive conditions will serve to severely limit our ability to compete effectively.

13. Flaws in Technology and Systems.

While we believe that our VoIP serve network offers a high level of system integrity, flaws in our technology and systems may arise which may create disruptions and other outages. Software and hardware malfunctions or problems with our network may arise. In addition, “hacker attacks” can occur from the Internet. As a result, if the reliability of our services is adversely perceived by our customers, we may have difficulty ion attracting and retaining customers and our reputation may suffer.

14. Losses Due to Customers Fraud.

Customers have obtained access to the Company’s service without prepaying for the service (minutes) by submitting fraudulent credit card information. Losses from unauthorized credit card transactions and theft of service totaled $42,579 during the twelve months ending December 31, 2005. We have implemented new anti-fraud procedures in order to control losses relating to unauthorized credit card use, but these procedures may not be adequate to effectively limit our exposure in the future from customer fraud. If our procedures are not effective, consumer fraud and theft of service could be significant and have a material adverse effect on our business and operating results.

15. Price Competition on Certain Services.

The products and services that we intend to offer may, through changing technology and cost structures, become commodities which result in intense price competition. While we believe that we will be able to distinguish our products and services from competing products, services, and technologies offered by others, if we fail to distinguish ourselves from others, this could hinder market acceptance of our services, force reductions in contemplated sales prices for our products and services, and reduce our overall sales and gross margins. Potential customers may view price as the primary distinguishing characteristic between our products and services and those of our competitors. This could result in the Company incurring significant and protracted losses. Further, we are selling into a market that has a broad range of desired product characteristics and features which may make it difficult for us to develop products that will address a broad enough market to be commercially viable.

16. Absence of Barriers to Entry & Lack of Patent Protection.

Our planned products and services are not unique and others could easily copy our strategy and provide the same or similar services since there are no significant barriers to entering the business of providing internet telephone services or VoIP networks and no significant barriers to entry are expected in the future. In addition, we do not hold and do not expect to hold any patent protection on any of our planned products or services. Our products and services primarily utilize the intellectual property rights of others. For these reasons we may face continuing financial losses.

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17. Limited Customer Base.

While we seek to implement our plans, we have a limited customer base of approximately 20,000 accounts using our suite of VoIP products and there can be no assurance that we will grow and develop a sufficient customer base that generates sufficient sustainable revenues that provide stable profit margins. The absence of growth at pricing levels that can provide for sustainable revenues and profit margins may greatly inhibit our ability to attract additional capital and otherwise lead to volatile results from operations with consequent adverse and material impact on our financial condition.

18. Customers, Technology/Feature Options & Commercial Viability.

If we are able to implement our business plan, we will be selling our products and services into a marketplace that is experiencing a convergence of competing technologies. Typically, telecommunications providers desire extremely robust products with the expectation of a relatively long effective life. As a result and depending on the outcome of unknown trends in technology, market forces, and other variables, we may not attract a broad enough market to achieve commercial viability.

19. New Technologies May Be Developed.  

New products or new technologies may be developed that supplant or provide lower-cost or better-performing alternatives to our planned products and services. This could negatively impact our financial results and delay or prevent us from achieving profitability.

20. Absence of Brand Name Recognition: Limited Ability to Promote.

The market for telecommunications services is intensely competitive; brand name recognition is critical to success. Many companies offer products and services like ours and many have a well established presence in major metropolitan centers. We may not be able to compete successfully with these companies and others that may enter the market. Some of them also have substantially greater financial, distribution, and marketing resources than we do. If we do not succeed in this competitive marketplace, we will lose customers and our revenue will be substantially reduced and our business, financial condition, and results of operations may be materially and adversely affected.

21. Domestic and Foreign Government Regulation.

We incur significant additional costs to remain a public company and to file current and prior period past due original and amended periodic reports (with the U.S. Securities and Exchange Commission) to meet our obligations as a public company. Since September 22, 2004 (the date at which we were informed that our common stock was registered under Section 12(g) of the Securities Exchange Act of 1934), we have had to expend and divert significant managerial and financial resources to address prior year filing delinquencies and to meet our current year filing obligations under Section 13(a) of the Securities Exchange Act of 1934. While we have made significant progress in filing many periodic reports with the SEC, we have yet to complete work on: (A) amending certain previously filed reports to respond to comments from the staff at the SEC; and (B) completing certain other reports that need to be filed for certain prior periods, including, for example, the filing of Form 10-QSB for the first quarter of 2006 through March 31, 2006. Our goal is to complete the filing of all of our past periodic reports, respond to SEC comments on all of prior and current periodic filings, and to file all of our current periodic reports in a timely manner. However, until we accomplish these and related objectives, we cannot assure you that we have satisfy our obligations as a public company.

Our planned operations will likely be subject to extensive telecommunications-based regulation by the United States and foreign laws and international treaties. In the United States we are subject to various Federal Communications Commission ("FCC") rules and regulations. Current FCC regulations suggest that our VoIP will not be unduly burdened by new and expanded regulations. However, there can be no assurance that the occurrence of regulatory changes would not significantly affect our operations by restricting our planned operations or increasing the opportunity of our competitors. In the event that government regulations change, there can be no assurance that the costs and burdens imposed on us will not materially and adversely impact our planned business.

22. Loss of Equipment.

Equipment located in a foreign country with a developing or emerging economy may be materially adversely affected by possible political or economic instability. The risks include, but are not limited to rapid political and legal change, terrorism, military repression, or expropriation of assets. In the event that equipment is damaged or lost our ability to service to our customers will be substantially reduced and our business, financial condition, and results of operations may be materially and adversely affected.

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23. Control.

Our current officers and directors directly and indirectly hold an aggregate of 36,111,902 shares of the Company’s common stock (before including any shares issuable upon exercise of any options, warrants, or the conversion of certain convertible promissory notes issued on February 9, 2006). This represents approximately 15.3% of the Company’s total outstanding shares as of March 31, 2006 and thereby allows the Company’s officers and directors to retain significant influence over the Company. Further and due to our limited financial resources, in the past we have issued our common stock and granted common stock purchase options to our officers and directors in lieu of paying cash compensation and we anticipate that we may need to continue this practice in the future. This may further limit the ability of stockholders

24. Prior Filing of Form 10-SB.

In June of 2001 we prepared and filed a registration statement on Form 10-SB with the U.S. Securities andExchange Commission ("SEC"). Subsequently, our then legal counsel delivered a letter (dated November 15, 2001) to the SEC which, by its terms, stated that the SEC had agreed to allow us to withdraw the registration statement. At the time the Company’s management believed, in reliance upon assurances from the Company’s then legal counsel, that the Company had been allowed to withdraw the registration statement, notwithstanding that the Securities Exchange Act of 1934 (the "Exchange Act") provides that any withdrawal of a Form 10-SB registration statement (at any time after 60 days from the date at which it is originally filed) requires that the registrant: (a) file Form 15 with the SEC; (b) meet certain requirements that allow the registrant to file Form 15 to terminate the registration of the securities that were previously registered on Form 10-SB; and (c) file such other periodic reports as required to ensure compliance with Section 13(a) of the Exchange Act up to the date at which the Form 15 is filed. Subsequently, in September 2004, the Company received a letter from the SEC (the "SEC Letter") informing the Company that the Company had not satisfied its obligations to file periodic reports required under Section 13(a) of the Exchange Act. While we believed that we had reasonably relied upon the assurances from our legal counsel (that we had effectively withdrawn the Form 10-SB registration statement), we are determined to complete all past and current periodic filings and to comply with the SEC Letter as expeditiously as possible. However, we have not received any assurances from the SEC that we will not be subject to any adverse enforcement action by the SEC. While we did not seek to avoid our obligations under the Exchange Act in any way, our prior actions in mistakenly believing that we had no obligation to file periodic reports required by the Exchange Act exposes us to risk of liability for significant civil fines and the SEC could, among other enforcement actions, suspend trading in our Common Stock. Further, we offered and sold securities in reliance upon exemptions that were predicated on our mistaken belief that the registration statement had been withdrawn. For these and other reasons we may be exposed to liability. We intend to continue a dialogue with the staff of the SEC and, as information is collected and documents are prepared, to complete all filings needed to demonstrate that we are fulfilling our obligations under the Exchange Act with due care and in full observance of our obligations as a "reporting company" thereunder.

25. Dependence Upon Key Personnel and New Employees.

We believe that our success will depend, to a significant extent, on the efforts and abilities of Farid Shouekani, Paul W. Atkiss, and James R. Balestraci. The loss of the services of any of them could have a material and continuing adverse effect on the Company. Our success also depends upon our ability to attract and retain qualified employees. Hiring to meet our anticipated operations will require that we assimilate significant numbers of new employees during a relatively short period of time.

26. Absence of Key Man Insurance.

We currently do not maintain any key man life insurance on the life of any of our officers or directors and there are no present plans to obtain any such insurance. In the event that any one or more of them are unable to perform their duties, the Company's business may be adversely impacted and our results of operations and financial condition would be materially and adversely impacted for a protracted period.

27. Lack of Independent Evaluation of Business Plan & Proposed Strategy.

We have not obtained any independent or professional evaluation of our business plan and our business strategy and we have no present plans to obtain any such evaluation. There can be no assurance that we will successfully increase revenues, or if revenues we do, that we can do so at levels that will allow us to achieve or maintain profitability. If we are unsuccessful, our results of operations and financial condition would be materially and adversely impacted and investors would likely lose all or a significant portion of their investment.

28. No Planned Dividends.

We do not anticipate that we will pay any dividends on our Common Stock. Any profits that we may generate, if any, will be reinvested.

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29. Potential Immediate and Substantial Dilution.

Funding of our planned business is likely to result in substantial and on-going dilution of our existing stockholders. While there can be no guarantee that we will be successful in raising additional capital, if we are successful in obtaining any additional capital, existing stockholders will likely incur immediate and substantial dilution.

30. Matter of Public Market and Rule 144 Stock Sales.

As of March 31, 2006, there were 91,839,882 shares of the Company’s Common Stock that were “restricted securities” and which may be sold pursuant to Rule 144. Since September 16, 2002, we have had a limited public trading market for our Common Stock in the “Pink Sheets” market. Since that date trading volumes have been volatile with sporadic liquidity levels. Further, our Common Stock is (as of the date of the filing of this Report) a “Penny Stock” and for this reason we face continuing difficulties in our efforts to gain a liquid trading market and there can be no assurance that any liquid trading market will ever develop or, if it does develop, that it can be maintained. In the event that we are able to complete the filing of all periodic reports (the “Periodic Reports”) required by Section 13(a) of the Exchange Act, we may be able to avoid any significant adverse enforcement action by the SEC arising out of our lack of compliance with the Exchange Act. Rule 144 provides that a person holding restricted securities for a period of one year may thereafter sell in brokerage transactions, an amount not exceeding in any three month period 1% of our outstanding Common Stock. Further, unless the Company can complete all of the required Periodic Reports and remain current in the filing of all future Periodic Reports, persons holding restricted stock will not be able to avail themselves of the safe harbor provisions of Rule 144. Persons who are not affiliated with the Company and who have held their restricted securities for at least two years are not subject to the volume limitation. In any trading market for our Common Stock, possible or actual sales of our Common Stock by present shareholders under Rule 144 may have a depressive effect on the price of our Common Stock even if a liquid trading market develops.

31. General Risks of Low Priced Stocks.

In any trading market for our Common Stock, we anticipate that our Common Stock will be deemed a "Penny Stock" which will limit trading and liquidity and thereby the retail market for the Common Stock. The limitations are primarily due to the burdens that are imposed on brokers whose customers may wish to acquire our Common Stock.

In that event, a shareholder may find it more difficult to dispose of, or to obtain accurate quotations as to the price of our Common Stock. In the absence of a security being quoted on NASDAQ, or the Company having $2,000,000 in net tangible assets, trading in the Common Stock is covered by Rule 3a51-1 promulgated under the Securities Exchange Act of 1934 for non-NASDAQ and non-exchange listed securities. Under such rules, broker/dealers who recommend such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with their spouse) must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale.

Securities are also exempt from this rule if the market price is at least $5.00 per share, or for warrants, if the warrants have an exercise price of at least $5.00 per share. The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure related to the market for penny stocks and for trades in any stock defined as a penny stock.

The Commission has adopted regulations under such Act which define a penny stock to be any NASDAQ or non-NASDAQ equity security that has a market price or exercise price of less than $5.00 per share and allow for the enforcement against violators of the proposed rules.

In addition, unless exempt, the rules require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule prepared by the Commission explaining important concepts involving a penny stock market, the nature of such market, terms used in such market, the broker/dealer's duties to the customer, a toll-free telephone number for inquiries about the broker/dealer's disciplinary history, and the customer's rights and remedies in case of fraud or abuse in the sale.

Disclosure also must be made about commissions payable to both the broker/dealer and the registered representative, current quotations for the securities, and, if the broker/dealer is the sole market maker, the broker/dealer must disclose this fact and its control over the market. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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While many NASDAQ stocks are covered by the proposed definition of penny stock, transactions in NASDAQ stock are exempt from all but the sole market-maker provision for (i) issuers who have $2,000,000 in tangible assets has been in operation for at least three years ($5,000,000 if the issuer has not been in continuous operation for three years), (ii) transactions in which the customer is an institutional accredited investor, and (iii) transactions that are not recommended by the broker/dealer.

In addition, transactions in a NASDAQ security directly with the NASDAQ market maker for such securities, are subject only to the sole market-maker disclosure, and the disclosure with regard to commissions to be paid to the broker/dealer and the registered representatives. The Company's securities are subject to the above rules

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report, as to there effectiveness to record, process, summarize, and report on a timely basis.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures, taken as a whole, are effective in recording, processing, summarizing and reporting information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, except that such controls and procedures are not effective to ensure that the reports that it files or submits under the Exchange Act are on a timely basis nor that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is communicated to the Company’s management, as appropriate, to allow for timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in the Company’s internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

Internal controls are processes designed, by our board of directors and management, to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations. Internal controls consist of five interrelated components:

1. Control environment sets the tone of an organization, influencing the control consciousness of its people and is the foundation for all other components of internal control, providing discipline and structure,

2. Risk assessment is the entity's identification and analysis of relevant risks to achievement of its objectives, forming a basis for determining how the risks should be managed,

3. Control activities are the policies and procedures that help ensure that management directives are carried out,

4. Information and communication systems support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities, and

5. Monitoring is a process that assesses the quality of internal control performance over time.

Internal controls, no matter how well designed and operated, can provide only reasonable assurance of achieving our control objectives. The likelihood of achievement is affected by limitations inherent to internal controls. These include the realities that human judgment in decision-making can be faulty and that breakdowns in internal controls can occur because of human failures such as simple errors or mistakes.  Additionally, controls, whether manual or automated, can be circumvented by the collusion of two or more people or inappropriate management override of internal controls.  Internal controls are influenced by the quantitative and qualitative

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estimates and judgments made by management in evaluating the cost-benefit relationship of an internal control.  Custom, culture, and the corporate governance system may inhibit fraud, but they are not absolute deterrents.

It is the responsibility of management, to include the Chief Executive Officer and Chief Financial Officer, to monitor compliance with and maintain effective internal controls.

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PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

VIPER NETWORKS, INC. vs GREENLAND CORPORATION

On June 11, 2004 the Company filed an action in the Superior Court of California, County of San Diego seeking, among other things, rescission of an April 25, 2003 agreement with Greenland Corp (“Greenland”).  The Company considers the contract it entered into with Greenland (wherein Greenland was to receive 2,500,000 common shares of the Company) to have been obtained by fraud.  Greenland has filed counter-claims in both California and Utah, seeking, among other things, full and free ownership to the 2,500,000 common shares of the Company.

As requested, by the Company, the Superior Court stayed the California cases and referred the California and Utah causes of action to binding arbitration (as stipulated in the April 25, 2003 agreement).  Although the final decision of the Arbitrator remains pending, the company believes the interim award issued by the Arbitrator on February 10, 2006 to be very favorable to the Company.  If the interim award were to stand, the Company believes the ruling would, in essence, restore the parties to the conditions that existed prior to the consummation of the agreement, to include the return to treasury of the 2,500,000 shares of the Company’s common stock; which is what the Company has been seeking.  The Company is currently evaluating the interim award and formulating it’s response to it, including, but not limited to, additional claims (such as compensation for attorney’s fees), if any.

HILLS OF BAJAMAR

During September 1998, the Company entered into an agreement with Tri-National, a related party, to purchase 50 acres of real property known as the Hills of Bajamar, located in Ensenada, Mexico (the “Land) that is valued at the predecessor cost of $125,000. The Company intended, at the time, to sell lots for residential development and build a communications facility for residents in the surrounding area.

As consideration for the Land, the Company issued 3,000,000 shares of its series B Preferred Stock and stock warrants to purchase 1,000,000 shares of Common Stock.  During June 2001, the Company negotiated a settlement and release with the Class B preferred stockholder whereby the Preferred Stock and stock warrants were exchanged for 400,000 shares of the Company’s Common Stock and the cumulative undeclared dividend was not declared.  During October 2001, Tri-National filed a voluntary bankruptcy petition; the court appointed a Trustee in October 2002.

Because consideration for the agreement (documented title) never was received the Company did not believe it was ever the owner of the Land.  Accordingly, the value of the Land had previously been classified as a stock subscription receivable.

During January 2006, the Company and the court appointed Trustee entered into a settlement agreement whereby the 400,000 shares of the Company’s Common Stock was released to the Trustee as an asset of the bankruptcy estate, Viper was released from all claims, and the Company relinquished any claim in the Land.  Accordingly, the $125,000 previously held as a stock subscription receivable was charged against earnings as a bad debt during the year ended December 31, 2005.

The Company's officers and directors are aware of no other threatened or pending litigation, which would have a material, adverse effect on us. From time to time we are a defendant (actual or threatened) in certain lawsuits encountered in the ordinary course of its business, the resolution of which, in our opinion, is not likely to have a material adverse effect on our financial position, results of operations, or cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In January 2006, the Company issued 333,333 shares of the Company’s Common stock to one purchaser in exchange for the Company’s receipt of $20,000 in cash.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchaser was an accredited investors as defined in Rule 501 of Regulation D of the Securities Act of 1933. The

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purchaser was provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist them in understanding the merits and risks of the investment. The purchaser was further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchaser was informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In January 2006, the Company issued a total of 912,000 shares of the Company’s Common stock to Paul Atkiss (an officer and director of the Company; 250,000), two employees (132,000), Paul Goss (legal counsel; 350,000), and Gibrahn Verdult (consultant; 180,000) in payment for services.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In January 2006, the Company issued 9,000,000 shares of the Company’s Common stock to two purchasers in a cashless exercise of stock options (200,000 shares $7,400) and warrants (8,800,000 shares $352,000) in exchange for monies owed on short term unsecured promissory notes.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction. The purchasers were each accredited investors as defined in Rule 501 of Regulation D of the Securities Act of 1933. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist them in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In January 2006, the Company issued 5,915,000 shares of the Company’s Common stock to five purchasers in exchange for the Company’s receipt of an aggregate of $195,800 in cash.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In January 2006, the Company issued 3,294,140 shares of the Company’s Common stock to three purchasers in conversion of an aggregate of $151,464 owed under convertible promissory notes.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

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In February 2006, the Company issued 15,615,000 shares of the Company’s Common stock to five purchasers in exchange for the Company’s receipt of an aggregate of $569,486 in cash.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; a 1,500,000 share commissions was incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In February 2006, the Company issued a total of 2,000,000 shares of the Company’s Common stock to Nabil Youkhana (an officer of the Company; 1,500,000) and to one other employee (500,000), in payment for service.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In February 2006, the Company issued 1,355,406 shares of the Company’s Common stock to one purchaser in full payment of $40,662 owed under a short term unsecured promissory note.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchaser was sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchaser was provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchaser was further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchaser was informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time

In March 2006, the Company issued 6,600,000 shares of the Company’s Common stock to two purchasers in conversion of an aggregate of $163,172 owed under convertible promissory notes.  Ronald Weaver, a director, received 2,409,822 shares ($72,295) and Farid Shouekani, an officer and director, received 4,190,178 shares ($90,877).  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchasers were sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchasers were provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchasers were further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchasers were informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

In March 2006, the Company issued 250,000 shares of the Company’s Common stock to Paul Atkiss, an officer and director of the Company in payment for services.  All of the shares were offered and sold under a claim of exemption provided by Section 4(2) of the Securities Act of 1933 without the use of an underwriter or NASD

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registered broker-dealer; no commissions were incurred by the Company in connection with the transaction.  The purchaser was sophisticated and experienced in financial, business, and investment matters and otherwise able to evaluate the merits and risks associated with the purchase of the Company’s securities. The purchaser was provided with, or given access to, information about the Company and the offering, including, but not limited to, the Company’s financial statements, business plan, articles of incorporation, by-laws, a description of how the proceeds were to be used, and additional information to assist in understanding the merits and risks of the investment. The purchaser was further provided the opportunity to ask questions of the Company’s officers and directors and receive answers to their questions. The purchaser was informed the securities purchased were restricted securities and they may have to hold them for an indefinite period of time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

Not Applicable.

ITEM 5. OTHER INFORMATION

Not Applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORMS 8-K

(a). The following Exhibits are attached:

EXHIBIT      NUMBER	DESCRIPTION
23.1 *	Auditor’s Consent
31.1 *	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 *	Certification Pursuant to Title 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *	Certification Pursuant to Title 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	*  Filed herewith.

 (b). The Company filed the following Reports on Form 8-K during the three months ended March 31, 2006:

None

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SIGNATURES

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

Viper Networks, Inc.
By:  /s/ Farid Shouekani Farid Shouekani Chief Executive Officer	Date: August 7, 2007
By:  /s/ Paul E. Atkiss Paul E. Atkiss Chief Financial Officer/Principal Accounting Officer	Date: August 7, 2007

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:  /s/ Farid Shouekani Farid Shouekani Chief Executive Officer & Director	Date: August 7, 2007
By:  /s/ Paul E. Atkiss Paul E. Atkiss Chief Financial Officer, Secretary & Director	Date: August 7, 2007
By:  /s/ Ronald G. Weaver Ronald G. Weaver Director	Date: August 7, 2007

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