China Wi-Max Communications (CHWM) 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2010

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

For the transition period from __________ to ___________

Commission file number : 000-53268

CHINA WI-MAX COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Nevada	61-1504884
(State of Incorporation)	(IRS Employer ID Number)

1009 Washington Street, Grafton, Wisconsin 53024

(Address of principal executive offices)

800-830-1978

(Registrant's Telephone number)

1905 Sherman Street, Suite 335, Denver, Colorado 80203

(Former address)

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

Yes x   No ¨           

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

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

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

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of November 19, 2010 there were 21,216,115 shares of the registrant's common stock issued and outstanding.

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets – September 30, 2010 (Unaudited) and
December 31, 2009	F-1
Statements of Operations (Unaudited) -
Three months and nine months ended September 30, 2010 and 2009, and
the period from July 5, 2006 (Inception) to September 30, 2010	F-2 – F-3
Statements of Changes in Deficit (Unaudited) - From July
5, 2006 (Inception) to September 30, 2010	F-4
Statements of Cash Flows (Unaudited) - Nine months ended September 30, 2010
and 2009, and the period from July 5, 2006 (Inception) to
September 30, 2010	F-5
Notes to the (Unaudited) Financial Statements	F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk - Not Applicable	7
Item 4. Controls and Procedures	7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - Not Applicable	8
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3. Defaults Upon Senior Securities - Not Applicable	9
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable	9
Item 5. Other Information - Not Applicable	9
Item 6. Exhibits	9
SIGNATURES	10

2

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2010			2009
	(unaudited)
ASSETS
Current assets:
Cash	$	12,580		$	34,524
Prepaid expenses		31,969			52,385
Total current assets		44,549			86,909
Property and equipment, net		504,174			514,731
Intangible assets, net		174,428			305,678
		678,602			820,409
Total assets	$	723,151		$	907,318
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable	$	1,004,845		$	357,577
Accrued interest		1,566,397			425,189
Notes payable, net of discount of $143,639 (2010)		3,634,615			3,468,824
Derivative liability		138,582			-
Total liabilities (all current)		6,344,439			4,251,590
Deficit:
China Wi-Max shareholders' deficit:
Common stock; $.001 par value; 100,000,000 shares authorized;
19,545,115 and 14,654,004 shares issued and outstanding as of
September 30, 2010 and December 31, 2009, respectively		19,545			14,654
Additional paid-in capital		3,744,433			1,892,931
Accumulated other comprehensive income		39,366			25,978
Deficit accumulated during the development stage		(9,400,609	)		(5,277,835	)
Total China Wi-Max  shareholders' deficit		(5,597,265	)		(3,344,272	)
Noncontrolling interest		(24,023	)		-
Total deficit		(5,621,288	)		(3,344,272	)
Total liabilities and deficit	$	723,151		$	907,318

See notes to unaudited consolidated financial statements.

F-1

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	Three Months Ended
	September 30,			September 30,
	2010			2009
Operating expenses:
General and administrative expense	$	(745,893	)	$	(466,729	)
Operating loss		(745,893	)		(466,729	)
Other expense:
Interest expense		(1,015,197	)		(79,440	)
Net loss		(1,761,090	)		(546,169	)
Net loss attributable to the noncontrolling interest		4,167			-
Net loss attributable to China Wi-Max		(1,756,923	)		(546,169	)
Foreign currency translation gain		12,477			491
Comprehensive loss	$	(1,748,613	)	$	(545,678	)
Basic and diluted net loss per share attributable to China Wi-Max common shareholders	$	(0.09	)	$	(0.04	)
Weighted average number of common
shares outstanding		19,059,980			14,267,620

See notes to unaudited consolidated financial statements.

F-2

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

							Period from
							July 5, 2006
							(inception)
	Nine Months Ended						through
	September 30,			September 30,			September 30,
	2010			2009			2010
Operating expenses:
General and administrative expense	$	(2,873,334	)	$	(1,921,373	)	$	(7,633,719	)
Operating loss		(2,873,334	)		(1,921,373	)		(7,633,719	)
Other expense:
Interest expense		(1,273,463	)		(213,117	)		(1,790,913	)
Net loss		(4,146,797	)		(2,134,490	)		(9,424,632	)
Net loss attributable to the noncontrolling interest		24,023			-			24,023
Net loss attributable to China Wi-Max		(4,122,774	)		(2,134,490	)		(9,400,609	)
Foreign currency translation gain		13,388			545			39,366
Comprehensive loss	$	(4,133,409	)	$	(2,133,945	)	$	(9,385,266	)
Basic and diluted net loss per share attributable to China Wi-Max common shareholders	$	(0.25	)	$	(0.17	)
Weighted average number of common
shares outstanding		16,868,597			12,665,316

See notes to unaudited consolidated financial statements.

F-3

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

PERIODS FROM JULY 5, 2006 (INCEPTION) THROUGH SEPTEMBER 30, 2010

	China Wi-Max Shareholders
									Accumulated		Deficit
							Additional		other		accumulated
	Common stock						paid-in		comprehensive		during the			Noncontrolling			Total
	Shares			Amount			capital		income		development stage			Interest			deficit
Common stock issued for cash between July 5, 2006 (inception) and December 31, 2006 at par value ($0.001 per share)		3,825,000		$	3,825		$	-	$	-	$	-		$	-		$	3,825
Net loss								-		-		(8,538	)					(8,538	)
Balances, December 31, 2006		3,825,000			3,825			-		-		(8,538	)		-			(4,713	)
Common stock issued for cash between January and June 2007 at par value ($0.001 per share)		5,230,000			5,230			-		-		-			-			5,230
Common stock issued for cash between June and December 2007 at par value ($0.001 per share)		260,000			260			-		-		-			-			260
Common stock issued for services, valued at $0.25 per share		455,000			455			113,295		-		-			-			113,750
Net loss		-			-			-		-		(444,590	)		-			(444,590	)
Balances, December 31, 2007		9,770,000			9,770			113,295		-		(453,128	)		-			(330,063	)
Shares of common stock cancelled at par value		(260,000	)		(260	)		-		-		-			-			(260	)
Common stock issued for services, valued at $0.25 per share		884,000			884			220,116		-		-			-			221,000
Common stock issued upon conversion of notes and accrued interest in December 2008, valued at $0.25 per share		391,002			391			97,362		-		-			-			97,753
Fair value of options vested during the period		-			-			103,275		-		-			-			103,275
Net loss		-			-			-		-		(1,716,195	)		-			(1,716,195	)
Other comprehensive income adjustments, gain on foreign currency translation		-			-			-		25,853		-			-			25,853
Balances, December 31, 2008		10,785,002			10,785			534,048		25,853		(2,169,323	)		-			(1,598,637	)
Common stock issued for services		1,900,000			1,900			473,100		-		-			-			475,000
Common stock issued upon conversion of notes and accrued interest		1,969,002			1,969			549,422		-		-			-			551,391
Fair value of options vesting during the period		-			-			336,361		-		-			-			336,361
Net loss		-			-			-		-		(3,108,512	)		-			(3,108,512	)
Other comprehensive income adjustments, gain on foreign currency translation		-			-			-		125		-			-			125
Balances, December 31, 2009		14,654,004			14,654			1,892,931		25,978		(5,277,835	)		-			(3,344,272	)
Common stock issued for services (unaudited)		4,350,551			4,350			735,483		-		-			-			739,833
Common stock issued upon conversion of notes and accrued interest (unaudited)		240,559			241			69,673		-		-			-			69,914
Common stock and warrants issued to convertible note holders (unaudited)		300,000			300			108,178		-		-			-			108,478
Fair value of options vesting during the period (unaudited)		-			-			938,168		-		-			-			938,168
Net loss (unaudited)		-			-			-		-		(4,122,774	)		(24,023	)		(4,146,797	)
Other comprehensive income adjustments, gain on foreign currency translation (unaudited)		-			-			-		13,388		-			-			13,388
Balances, September 30, 2010 (unaudited)		19,545,114		$	19,545		$	3,744,433	$	39,366	$	(9,400,609	)	$	(24,023	)	$	(5,621,288	)

See notes to unaudited consolidated financial statements.

F-4

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

							Period from
							July 5, 2006
							(Inception)
	Nine Months Ended						through
	September 30, 2010			September 30, 2009			September 30, 2010
Cash flows from operating activities:
Net loss	$	(4,146,797	)	$	(2,134,490	)	$	(9,424,632	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock based compensation		1,719,974			657,265			2,969,360
Amortization of debt issue costs		50,488			-			50,488
Impairment loss		131,250			-			131,250
Depreciation		21,163			20,552			54,935
Amortization		-			16,303			25,649
Changes in assets and liabilities:		-			-			-
Decrease (increase) in prepaid expenses		23,160			(29,936	)		(29,225	)
Decrease in other assets		-			26,657			38,139
Increase in accounts payable		647,268			146,981			1,004,844
Increase in accrued interest		1,177,975			213,117			1,690,408
Net cash used in operating activities		(375,519	)		(1,083,551	)		(3,488,784	)
Cash flows from investing activities:
Purchase of property and equipment		-			(13,945	)		(521,329	)
Purchase of intangible assets		-			-			(364,195	)
Net cash used in investing activities		-			(13,945	)		(885,524	)
Cash flows from financing activities:
Proceeds from issuance of notes payable and warrants		353,510			1,321,590			4,384,234
Proceeds from issuance of common stock		-			-			9,055
Debt issue costs		-			-			(5,270	)
Net cash provided by financing activities		353,510			1,321,590			4,388,019
Effect of exchange rate changes on cash		65			(678	)		(1,131	)
Net (decrease) increase in cash		(21,944	)		223,416			12,580
Cash, beginning of period		34,524			147,889			-
Cash, end of period	$	12,580		$	371,305		$	12,580
Supplemental disclosure of non-cash investing
and financing activities:
Convertible notes and interest converted to common stock	$	69,914		$	397,560		$	719,058

See notes to unaudited consolidated financial statements.

F-5

CHINA WI-MAX COMMUNICATIONS, INC.

(A Development Stage Enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NINE-MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

(Unaudited)

1. Organization, basis of presentation, going concern and management's plans:

Organization:

China Wi-Max Communications, Inc. (the "Company") is a development stage telecommunications broadband provider.  The Company is a Nevada corporation formed in July 2006, and is focused on providing commercial customers with high bandwidth connections throughout first and second tier markets in China.  For accounting purposes, the Company is classified as a development stage enterprise.

The Company plans to build, own, and operate metropolitan area Internet Protocol (IP)-based broadband networks using a combination of Company-owned optical fiber and licensed Wi-Max (Worldwide Interoperability for Microwave Access) capable wireless spectrum.  These networks are designed to provide the reliability, redundancy, scalability, and other features expected of a carrier class network.  The Company intends to provide value-added services such as IP transport, Internet Service Provider (ISP) services, and broadband internet access.  The Company plans to position itself to bypass the local loop facilities of the current local exchange carriers to connect enterprise customers directly to a global communications network.

In September 2008, the Company effectuated the formation and control of two wholly-owned subsidiaries in China:  Beijing Yuan Shan Da Chuan Business Development Ltd. ("Da Chuan") and Beijing Yuan Shan Shi Dai Technology Ltd. ("Shi Dai").

The Company's financial statements as of September 30, 2010, the year ended December 31, 2009, and the periods from September 24, 2008 (the date at which the Company gained 100% ownership of Da Chuan and Shi Dai) through September 30, 2010, include the accounts of Da Chuan and Shi Dai.  In  connection with the adoption of new accounting rules for variable interest entities (“VIE’s”), the Company began consolidating Beijing Gao Da Yang Guang Communication Technology, Ltd. (“Gao Da”) beginning on January 1, 2010 (Note 2).  All intercompany account balances and transactions have been eliminated in consolidation.

The Company's foreign subsidiaries (Da Chuan and Shi Dai) and its controlled affiliate (Gao Da) are located in China, and foreign transactions are conducted in currencies other than the U.S. dollar, primarily the Chinese Renmimbi (RMB), which is considered to be their functional currency. For financial reporting purposes, the financial statements of the subsidiaries have been translated into United States (U.S.) dollars.  Assets and liabilities are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at weighted-average rates of exchange prevailing during the reporting period. Any resulting translation adjustments are charged or credited to other comprehensive income (loss) in shareholders' deficit. Gains and losses on foreign currency transactions are included in other income and expense.

F-6

The Company is exposed to movements in foreign currency exchange rates.  In addition, the Company is subject to risks including adverse developments in the foreign political and economic environment, trade barriers, managing foreign operations and potentially adverse tax consequences.  There can be no assurance that any of these factors will not have a material negative impact on the Company's financial condition or results of operations in the future.

Basis of Presentation:

The accompanying interim, unaudited financial statements of the Company have been prepared in accordance with the instructions to quarterly reports on Form 10-Q. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations and cash flows at September 30, 2010, and for all periods presented, have been made. Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these interim financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The results of operations for the periods ended September 30, 2010, are not necessarily an indication of operating results for the full year.

Going concern and management's plans:

The accompanying unaudited, interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of approximately $4.1 million for the nine-months ended September 30, 2010, and a working  capital deficiency and  shareholders' deficit of approximately $6.3 million and $5.6 million, respectively, at September 30, 2010.  The Company has a limited operating history and no revenue producing operations.  In addition, the Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any  assurance  it will be able to enter into any such agreement in the future, or be able to raise  funds  through a future issuance of debt or equity. These factors raise substantial doubt about the Company's ability to continue as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company's continuance as a going concern is dependent on its future profitability   and on the on-going support of its shareholders and creditors.  In order to mitigate the going concern issues, the Company is continuing its efforts to raise capital.  The Company raised approximately $354,000 during the nine-months ended September 30, 2010, in exchange for notes payable (Note 5).

F-7

In July 2010, the Company entered into a two-year financing agreement with AGS Capital Group, LLC (“AGS”), a third party, in which, subject to various conditions and restrictions, AGS is obligated to purchase up to $10 million of the Company’s common stock.  The Company‘s ability to require AGS to purchase its common stock however, is subject to restrictive limitations, as defined. Such restrictions include a maximum advance (and sale of shares) that is limited to 100% of the average daily-trading volume of the Company’s stock for the five days immediately preceding the advance. The Company also must meet certain terms and conditions which include, but are not limited to, the Company filing a Registration Statement with the Securities and Exchange Commission registering such shares to be issued. Such conditions and terms may significantly limit the amount of cash that may be raised over the term of this agreement, and that amount, if any, may be significantly less than the $10 million maximum. Through September 30, 2010, the Company has not raised any cash under the AGS agreement (Note 8).

The Company is also pursuing other financing options; however, these options may not be available in amounts or on terms acceptable to the Company, or at all.  As a consequence, if the Company is unable to obtain any additional financing in the near term, the Company will be  required  to delay its business plan  implementation, and/or the Company may be required to cease operations in order to offset the lack of available funding, which would have a material adverse impact on the Company.

2. Summary of significant accounting policies:

Use of estimates in the preparation of consolidated financial statements:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates.

Impairment of long-lived assets:

Management assesses the carrying values of long-lived assets for impairment when circumstances indicate that such amounts may not be recoverable from future operations.  Generally, assets to be held and used are considered impaired if the sum of expected undiscounted future cash flows is less than the carrying amount of the asset.

As a result of this assessment process, management made a determination that an impairment was evident to one of its frequency license rights as of September 30, 2010. The Company recorded an impairment charge of $131,250 in the quarter ended September 30, 2010, which is recorded in general and administrative expense (Note 4).

Fair value of financial instruments:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 — assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.

As of September 30, 2010, the Company had the following financial liability which is measured at fair value (Note 6):

	Level 1		Level 2		Level 3
Derivative liability		—	$	138,582		—

The fair value of the Company's cash, accounts payable and notes payable approximate their carrying amounts due to the short maturities of these instruments.

F-8

Derivatives:

The applicable accounting rules require that each derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative’s fair value recognized currently in earnings unless specific hedge accounting criteria are met.  The Company values these derivative securities under the fair value method at the end of each reporting period (quarter), and their value is marked to market at the end of each reporting period with the gain or loss recognition recorded against earnings.  The Company continues to revalue these instruments each quarter to reflect their current value in light of the current market price of the Company's common stock.  The Company utilizes the Black-Scholes option-pricing model to determine fair value.  Key assumptions of the Black-Scholes option-pricing model include applicable volatility rates, risk-free interest rates and the instrument’s expected remaining life.  These assumptions require significant management judgment.

The Company classifies derivatives as either current or long-term in the balance sheet based on the classification of the underlying convertible debt instrument.

Consolidation of variable interest entity:

In June 2009, the FASB issued new guidance that amended the existing criteria for consolidating VIE’s.  The new consolidation criteria requires an ongoing qualitative assessment of which entity has the power to direct matters that most significantly impact the activities of a VIE and has the obligation to absorb losses or benefits that could be potentially significant to the VIE.  This new guidance was effective for the Company beginning January 1, 2010.

In connection with the adoption of the new accounting rules for VIE’s, the Company consolidated an affiliate company, Gao Da, beginning on January 1, 2010. The Company is the sole variable interest holder of Gao Da, and it is the primary beneficiary, as there is a service agreement between the Company and Gao Da, in which the Company has agreed to fund all of Gao Da’s operations. Gao Da is a development stage, PRC enterprise, with no revenue-producing operations; at September 30, 2010, Gao Da's assets consist of license rights with a carrying value of approximately $174,000 (Note 4) and liabilities of approximately $436,000, which are due to China Wi-Max.  These account balances eliminate in consolidation. Gao Da's license rights cannot be sold or transferred without the prior approval of the licensor.

Prior to January 1, 2010, advances made by the Company to Gao Da for operations were expensed by the Company. In addition, prior to January 1, 2010, the Company had recorded contractual license rights, which represented the amount the Company paid to Gao Da to purchase the frequency licenses held by Gao Da. The carrying value of the contractual license rights was approximately the same amount as the carrying value of the frequency licenses recorded by Gao Da through December 31, 2009. Therefore, upon consolidation of Gao Da on January 1, 2010, after elimination of intercompany account balances and transactions, there was no material impact on the Company’s consolidated financial statements.

Revenue recognition:

As of September 30, 2010, the Company has no revenue-producing operations. At such time that revenue  generating  operations begin, the Company will recognize revenue pursuant to Securities and Exchange Commission, Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements, as amended  by  SAB  No. 104, Revenue  Recognition.  Consistent with the requirements of these SABs, revenue will be  recognized  only when:  a) persuasive evidence of arrangement exists, b) delivery has occurred, c) the seller's price to the buyer is fixed, and d) collectability is reasonably assured.

F-9

Loss per share:

Basic loss per share of common stock is computed based on the weighted-average number of common shares outstanding during the period. Common shares issuable upon the conversion of stock options, warrants and debt securities (24,569,043 at September 30, 2010 and 13,497,929 at September 30, 2009) are not considered in the calculation, as the effect would be antidilutive. Therefore, diluted loss per share is equivalent to basic loss per share.

Reclassifications:

Certain immaterial prior year amounts were reclassified in the statement of cash flows to conform to the current period presentation.

3. Property and equipment:

As of September 30, 2010 and December 31, 2009, property and equipment consists of the following:

	September 30, 2010			December 31, 2009
Fiber optic cable	$	518,423		$	507,875
Network equipment		41,404			40,643
		559,827			548,518
Less accumulated depreciation		(55,653	)		(33,787	)
	$	504,174		$	514,731

4. Intangible assets:

Intangible assets consist of frequency license rights of $174,428 at September 30, 2010 held by Gao Da. Prior to January 1, 2010, the Company's intangible asset, contractual license rights ($305,678 at December 31, 2009), represented the Company’s rights to revenue generated from Gao Da customers who contracted to utilize the frequency licenses held by Gao Da. Prior to January 1, 2010, the Company amortized this intangible asset over the twenty-year term of the agreement. With the consolidation of Gao Da effective January 1, 2010, and the elimination of intercompany account balances between the Company and Gao Da, the resultant intangible asset represents the frequency licenses held by Gao Da.

The Company does not amortize these frequency license rights. The Company evaluates this intangible asset for impairment annually, and between annual evaluations if events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. In cases where required, an impairment provision is recognized in an amount by which the carrying value exceeds the estimated fair value of the asset. As discussed below, an impairment provision was recorded in the quarter ended September 30, 2010.

F-10

The underlying value of the frequency licenses held by Gao Da is dependent on numerous factors, including successful deployment of networks and connectivity, and/or radio links. The Company considers the underlying licenses to have an indefinite useful life under the provisions of ASC Topic 350, Goodwill and Other Intangible Assets. These licenses are typically renewed if the licensee files a renewal application prior to license expiration wherein the licensee demonstrates its engagement in supplying services or related activities to satisfy the appropriate criteria for renewal.

If at any time the Company determines that these criteria will most likely not be met, or if there is a change in management's future business plans or disposition of one or more licenses underlying the contractual license rights, the Company will first test the contractual license rights for impairment, and then the Company will modify the life of the contractual license rights and begin amortizing the cost over the remaining underlying license period. The Company also tests its contractual license rights for impairment if there are any legal, regulatory, contractual, competitive, and economic or other factors that are determined to limit the useful lives of the licenses.

An impairment loss of $131,250 was recorded in the quarter ended September 30, 2010, to reduce the carrying value of one of the Company’s three frequency licenses to $0.  The decision to impair the carrying value of this license (the Hangzhou license) was based primarily on the Company’s inability to renew the term of the license within what management determined to be a reasonable period of time, as well as unanticipated delays in the Company’s implementation of planned infrastructure in Hangzhou province, PRC.

5. Notes payable:

At September 30, 2010 and December 31, 2009, the Company had the following notes payable outstanding:

F-11

		Balance Outstanding as of
		September 30, 2010		December 31, 2009
12%, unsecured, convertible notes, originally due June 30, 2010; convertible at $0.10 per share	[A]	$	40,000	$	-
12%, unsecured, convertible notes, originally due June 30, 2010; convertible at $0.19 per share	[A]		188,500		-
12%, unsecured, convertible notes, originally due June 30, 2010; convertible at $0.25 per share	[A]		290,000		552,400
10%, unsecured, convertible notes, originally due December 31, 2010; convertible at $0.10 per share	[B]		181,000		-
10%, unsecured, convertible notes, originally due prior to and as of December 31, 2010; convertible at $0.19 per share	[B]		1,944,924		-
10%, unsecured, convertible notes, originally due prior to and as of December 31, 2010; convertible at $0.50 per share	[B]		917,181		2,916,424
Other unsecured notes	[C]		73,010		-
Totals		$	3,634,615	$	3,468,824

[A]

During the nine months ended September 30, 2010, the Company agreed to reduce the conversion rates on certain notes as an inducement to the noteholders to convert their notes into shares of the Company’s common stock. Holders of notes for $368,500 agreed to convert their notes at conversion rates ranging from $0.10 to $0.25 per share.  These noteholders agreed to accept the shares of the Company’s common stock on December 31, 2010. Because such shares have not been issued as of September 30, 2010, the amount the noteholders agreed to convert continues to be presented as notes payable at September 30, 2010.

F-12

As a result of the inducements granted to certain note holders, the Company recognized expense of approximately $65,000 in the three months ended September 30, 2010, presented in interest expense in the accompanying consolidated financial statements.

The remaining 12% notes for $150,000 that were due on June 30, 2010, are in default and are due on demand.

[B]    During the nine months ended September 30, 2010, the Company issued an additional $233,500 of 10% convertible notes for cash. These notes are convertible at any time into shares of the Company's common stock at $0.50 per share at the option of the note holders.

Of the $233,500 notes issued, notes for $183,500 were issued along with detachable warrants to purchase up to 367,000 shares of common stock at $1.00 per share. These warrants have a five-year term. The Company recorded the warrants at their relative fair value and recorded a discount on the notes payable of approximately $16,000.

During the nine months ended September 30, 2010, the Company agreed to reduce the conversion rates on certain notes as an inducement to the noteholders to convert their notes into shares of the Company’s common stock. Holders of notes for $1,944,924 agreed to convert their notes into shares of the Company’s common stock at conversion rates ranging from $0.10 to $.25 per share. These noteholders agreed to accept the shares of the Company’s common stock on December 31, 2010. Because such shares have not been issued as of September 30, 2010, the amount the noteholders agreed to convert continues to be presented as notes payable at September 30, 2010.

Holders of notes for $131,000 agreed to extend the due date of their notes until December 31, 2010 with reduced conversion rates.  Holders of notes for $81,000 have agreed to convert their notes into shares of common stock at a conversion rate based on the 10-day average trading price of the Company’s common stock at the conversion date and receive a warrant for each $1.00 of note principal outstanding at the conversion date (81,000 warrants). These warrants are to have an exercise price of $1.00 per share and a term of 5 years. The Company determined that these notes did not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of the debt is not fixed. Therefore, the conversion feature of the debt has been bifurcated and accounted as a derivative. A discount of $81,000 has been recorded on these notes as of September 30, 2010 (Note 6).

Holders of notes for $225,000 agreed to extend the due date of their notes to December 31, 2010, without any additional modifications to the terms of the debt. As a result, the total of notes due at December 31, 2010, is $985,000.

Notes for $210,000 have not been extended and are due on demand.

As a result of the inducements granted to certain noteholders, the Company recognized expense of approximately $900,000 in the three months ended September 30, 2010, presented in interest expense in the accompanying consolidated financial statements.

[C]    In July 2010, the Company issued a $50,000 convertible note, convertible into common stock at 58% of the average market price of the Company’s common stock during the ten days preceding the conversion date.  This note bears interest at 8% and is due in April 2011. The Company determined that this note did not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of this note is not fixed. Therefore, the conversion feature of the debt has been bifurcated and accounted as a derivative. A discount of approximately $47,000 has been recorded on this note as of September 30, 2010 (Note 6)

F-13

In September 2010, the Company issued two convertible notes which total $30,010, convertible into shares of the Company’s common stock at $0.08 per share, which approximates the market price of the Company’s common stock at the issuance date. The note holders agreed to convert these notes at the date of issuance; however, the shares of the Company’s common stock have not been issued as of September 30, 2010.

During the nine months ended September 30, 2010, the Company borrowed $40,000 from an existing convertible note holder in exchange for a non-interest bearing note payable, due on demand.

6. Derivative liability:

In accordance with ASC 815-15, Embedded Derivatives, the Company determined that the conversion features of certain convertible notes issued or modified during the three months ended September 30, 2010, meet the criteria of an embedded derivative, and therefore the conversion features of these notes, pursuant to ASC 815-40, Contracts in Entity’s Own Equity, have been bifurcated and accounted for as a derivative. The Company adjusts the fair value of these derivative liabilities at each reporting date, and the resulting gain or loss is reported in the statements of operations. The change in fair value of these derivatives was not considered material for the three months ended September 30, 2010. The derivative liability balance as of September 30, 2010 is $138,582.

The Company utilized the Black-Scholes pricing model to calculate the fair value of the derivative liability. Key assumptions used to apply this model were as follows:

Expected term	4 to 9 months
Volatility		110	%
Risk-free interest rate		0.19%-0.38	%
Dividend yield		0	%

7. Income taxes:

Based on the U.S. statutory income tax rates, the Company's expected income tax benefit was approximately $1,451,000 and $747,000 for the nine-months ended September 30, 2010 and 2009, respectively.  The expected income tax benefit differs from the actual benefit of $0 each period, due primarily to the valuation allowance.

8. Shareholders’ deficit:

Stock options:

During the nine months ended September 30, 2010, the Company recorded stock-based compensation of approximately $938,000 for options that vested during the period, which is included in general and administrative expense.  As of September 30, 2010, the fair value of 600,000 unvested stock options was approximately $54,000 which is expected to be recognized over a weighted-average period of approximately 1.5 years.

F-14

The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options. The weighted-average fair value of options granted during the nine-months ended September 30, 2010, was $0.22 per share. The assumptions utilized to determine the fair value of options granted through September 30, 2010, are provided in the following table:

	September 30, 2010			September 30, 2009
Risk free interest rates		2.38%-2.44	%		1.34% - 2.75	%
Expected volatility		181%-185	%		135% - 145	%
Expected term in years		5			2-3
Expected dividend yield		-			-

The following table sets forth stock option activity since January 1, 2010:

			Weighted
			Average				Weighted
	Number of		Exercise				Average
	Options		Price		Exercisable		Fair Value
Outstanding, January 1, 2010		5,350,000	$	0.35		2,050,000	$	0.18
Granted/vested during period		4,350,000	$	0.28		4,050,000	$	0.22
Outstanding, September 30, 2010		9,700,000	$	0.32		6,100,000	$	0.21

			Weighted
	Number of		Average
	Options		Fair Value
Nonvested At January 1, 2010		3,300,000	$	0.18
Granted		300,000	$	0.22
Nonvested at September 30, 2010		3,600,000	$	0.18

As of September 30, 2010, the Company has 3,600,000 unvested stock options, of which the vesting of 3,000,000 stock options are contingent on future events.

Options granted to date have been granted outside of the plan and have terms that do not exceed five years. There were 6,100,000 vested options as of September 30, 2010. There was no intrinsic value attributable to outstanding or vested options at September 30, 2010.

Common stock issuances:

During the nine-months ended September 30, 2010, the Company issued 4,350,551 shares of its common stock to individuals as employee compensation and payments for services performed for the Company, valued at approximately $740,000 (based on the market price of the Company’s common stock at the date of the respective issuances). This amount includes 1,853,051 shares valued at approximately $206,000 that were issued to AGS as a fee incurred in conjunction with the AGS financing agreement.

F-15

During the nine-month period ended September 30, 2009, the Company issued 1,860,000 shares of common stock to various third parties who performed development stage services for the Company and for employee bonuses. These shares were valued at $465,000 ($0.25 per share).

9. Lease commitment:

Through October 2010, the Company leased office space in Denver, Colorado on a month-to-month basis for approximately $1,100 per month. Da Chuan leases office space in Beijing, China on a month-to-month basis for approximately $5,400 per month.

9. Subsequent events:

On October 28, 2010, the Company’s board of directors elected Eric Hager as Executive Vice President. Mr. Hager has served on the Board of Advisors of the Company since March 2009. On October 28, 2010, Mr. Hager was granted 750,000 shares of common stock valued at approximately $30,000, and compensation of $10,000 per month.

In addition, the board of directors also granted 750,000 shares of common stock, valued at approximately $30,000, to the Company’s CFO on October 28, 2010, and increased his monthly salary to $10,000 per month.

Subsequent to September 30, 2010, the Company issued two additional unsecured, 10% convertible notes, convertible into shares of common stock at $0.07 per share.  These two notes were then converted into shares of the Company’s common stock

Subsequent to September 30, 2010, the Company issued 216,000 shares of its common stock as payment for consulting services, valued at approximately $8,700.

F-16

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

The following discussion is intended to provide an analysis of China Wi-Max’s financial condition and should be read in conjunction with China Wi-Max’s financial statements and the notes thereto set forth herein.  The matters discussed in these sections that are not historical or current facts deal with potential future circumstances and developments.  China Wi-Max actual results could differ materially from the results discussed in the forward-looking statements.  Factors that could cause or contribute to such differences include those discussed below.

Plan of Operations

China Wi-Max plans to be a telecommunications broadband provider focused on providing commercial customers with high bandwidth connections through first and second tier markets in China through subsidiary companies.  Through these wholly and partially owned subsidiaries, China Wi-Max intends to build, own, and operate metropolitan area Internet Protocol (IP) based broadband networks, using both owned optical fiber and licensed Wi-Max capable wireless spectrum.

China Wi-Max operating subsidiaries networks are designed to provide the reliability, redundancy, scalability, and other features expected of a carrier class network.  China Wi-Max believes its operating subsidiaries can bypass the local loop facilities of the local exchange carrier to connect enterprise customers directly to the global communications network.  At this time, China Wi-Max has six full-time employees in the United States, augmented by a number of personnel in operating subsidiaries, contract personnel and professional services organizations.

Service to customers is provided through direct connections to the optical fiber or transmissions over licensed radio spectrum provided through China Wi-Max’s Chinese operating subsidiaries.  Currently, the Company’s operating subsidiaries are offering customers high speed broadband Internet access in a pilot program.   Services contemplated to be offered in the future include Voice-over Internet Protocol, or VoIP, bandwidth on demand, bandwidth redundancy, virtual private networks, or VPNs, disaster recovery, bundled data, and video services.

During 2009, the Company continued to put in place the structure and resources necessary to provide the services contemplated in its business plan.  The Company put into place the corporate structure of subsidiaries, licenses and contract relationships necessary to provide services in China.  Audit work and filings with the United States Securities and Exchange Commission were successfully completed to position the Company to become a trading company on the Over The Counter Bulletin Board exchange.  Initial office space and personnel resources were obtained in China.

The addition of customers will require additional capital to acquire access to new buildings, purchase and install equipment, etc.  The Company is also pursuing opportunities to utilize its wireless assets to provide last mile bridging services for potential customers.  The Company also plans to initialize its network assets in Hangzhou. This project timing will be dependant our ability to raise sufficient capital to proceed.  We are optimistic about the opportunity in China, but recognize how difficult it is to raise capital necessary to carry out the Company's plans.

In the continuance of our business operations, we do not intend to purchase or sell any significant assets and we do not expect a significant change in the number of employees, until additional capital is raised.

3

RESULTS OF OPERATIONS

Results of Operations for the Three-months Ended September 30, 2010 Compared to the Three-months Ended September 30, 2009

During the three-months ended September 30, 2010, China Wi-Max incurred general and administrative expenses of approximately $746,000 compared to approximately $467,000 for the three-months ended September 30, 2009. The $279,000 increase was a result of an increase in the Company's consulting and legal fees expense related to marketing the Company and assistance with attracting additional capital and an impairment loss of $131,250 on the Hangzhou license.

An impairment loss of $131,250 was recorded in the three-month period ended September 30, 2010 to reduce the net carrying value of one of the Company’s three licenses to $0.  The decision to impair the carrying value of this contractual license right was based primarily on the Company’s inability to renew the license within what management determined to be a reasonable period of time, as well as unanticipated delays in the Company’s implementation of planned infrastructure in Hangzhou.

During the three-months ended September 30, 2010, China Wi-Max recognized a net loss of approximately $1,761, 000 compared to a net loss of approximately $546,000 during the three-months ended September 30, 2009. The $1,215,000 increase in net loss was primarily a result of the approximately $279,000 increase in general and administrative expenses, discussed above combined with the approximately $936,000 increase in interest expense as a result of the inducement to convert the convertible promissory notes discussed in note 5.

China Wi-Max's basic loss per share was $0.09 during the three-months ended September 30, 2010 versus a net loss of $0.04 per share during the three-months ended September 30, 2009.

Results of Operations for the Nine-months Ended September 30, 2010 Compared to the Nine-months Ended September 30, 2009

During the nine-months ended September 30, 2010 and 2009, China Wi-Max did not recognize any revenues.

During the nine-months ended September 30, 2010, China Wi-Max incurred general and administrative expenses of approximately $2,873,000 compared to approximately $1,921,000 for the nine-months ended September 30, 2009. The $952,000 increase was a result of an increase in the Company's operational activities compared to the prior period. During the nine-months ended September 30, 2010, there was an increase of approximately $315,000 in salary and wages, expenses for operations in China decreased by approximately $80,000, consulting and professional fees increased by approximately $623,000 , an impairment loss of $131,250 incurred in September 30, 2010 and travel and other items decreased by approximately $37,000 over the prior period ended September 30, 2009.

During the nine-months ended September 30, 2010, China Wi-Max issued 4,350,551 shares of its common stock to individuals as employment compensation and payments for services performed for China Wi-Max, valued at approximately $740,000. This amount includes 1,857,051 shares issued to a third party as part of a debt financing agreement. During the nine-months ended September 30, 2009, China Wi-Max issued 1,860,000 shares of its common stock to individuals as employment signing bonuses and payments for services performed for China Wi-Max, valued at approximately $465,000.

During the nine-months ended September 30, 2010, China Wi-Max issued stock options exercisable for 4,350,000 shares of its common stock, with an exercise price in a range from $0.25 to $0.50 per share and a term of 5 years. The options have variable vesting rates. During the nine-months ended September 30, 2010, options exercisable for 4,050,000 shares were vested. These options were valued using the Black-Scholes model, and the Company has recorded approximately $938,000 of non-cash stock option expense during the nine-months ended September 30, 2010.

During the nine-months ended September 30, 2009, China Wi-Max issued stock options exercisable for 3,175,000 shares of its common stock, with an exercise price of $0.25 per share and a term of 3 to 5 years.  The options have variable vesting rates.  During the nine-months ended September 30, 2009, options exercisable for 1,063,000 shares were vested.  These options were valued using the Black-Scholes model, and the Company has recorded approximately $192,000 of stock based compensation expense during the nine-months ended September 30, 2009.

During the nine-months ended September 30, 2010, China Wi-Max recognized a net loss of approximately $4,147,000 compared to a net loss of approximately $2,134,000 during the nine-months ended September 30, 2009. The $2,013,000 increase in net loss was primarily a result of the approximately $952,000 increase in general and administrative expenses, discussed above combined with the approximately $1,061,000 increase in interest expense as a result of the issuance of convertible promissory notes discussed below.

4

China Wi-Max's basic loss per share was $0.25 during the nine-months ended September 30, 2010 versus a net loss of $0.17 per share during the nine-months ended September 30, 2009.

LIQUIDITY

Historically, cash flow from operations has not been sufficient to sustain China Wi-Max's operation without additional sources of capital. At September 30, 2010, the Company had total current assets of approximately $45,000, consisting of cash of approximately $13,000 and prepaid expenses of approximately $32,000. At September 30, 2010, the Company had total current liabilities of approximately $6,344,000. Total current liabilities consisted of accounts payable of approximately $1,005,000, accrued interest of approximately $1,566,000, current notes payable of approximately $3,635,000 and derivative liabilities of approximately $138,000. At September 30, 2010, the Company had a working capital deficit of approximately $6,300,000.

During the nine-months ended September 30, 2010, China Wi-Max used approximately $376,000 in its operating activities. The net loss of approximately $4,147,000 was adjusted for approximately $740,000 of services paid for by the issuance of common stock, approximately $938,000 in non-cash option expenses and approximately $21,000 in depreciation and amortization costs. During the nine-months ended September 30, 2010, there was an approximate $23,000 decrease in prepaid expenses, an approximate $647,000 increase in accounts payable, and an approximate $1,178,000 increase in accrued interest.

During the nine-months ended September 30, 2009, China Wi-Max used approximately $1,084,000 in its operating activities.  The net loss of approximately $2,134,000 was adjusted for approximately $465,000 of services paid for by the issuance of common stock, approximately $192,000 in non-cash stock option expense and approximately $36,000 in depreciation and amortization expenses. During the nine months ended September 30, 2009, there was an approximate $30,000 increase in prepaid expenses, an approximate $147,000 increase in accounts payable, an approximate $140,000 increase in accrued interest, and an approximate $27,000 decrease in other assets.

During the nine-months ended September 30, 2010, China Wi-Max did not have any investing activities. During the nine-months ended September 30, 2009, China Wi-Max used approximately $14,000 in its investing activities for the purchase of property and equipment.

During the nine-months ended September 30, 2010, China Wi-Max received approximately $354,000 from its financing activities.  During the nine-months ended September 30, 2009, China Wi-Max received approximately $1,322,000 from its financing activities.

5

To the extent China Wi-Max's operation are not sufficient to fund its capital requirements, China Wi-Max may enter into a revolving loan agreement with financial institutions or attempt to raise capital through the sale of additional capital stock or through the issuance of debt. At the present time China Wi-Max does not have a revolving loan agreement with any financial institution nor can it provide any assurance that it will be able to enter into any such agreement in the future or be able to raise funds through the further issuance of debt or equity.

In the event that our operating plan changes due to changes in our strategic plans, lower than expected revenues, unanticipated expenses, increased competition, unfavorable economic conditions or other unforeseen circumstances, including the continued turmoil and tightening of the credit markets, and further weakening of consumer confidence and spending, our liquidity may be negatively impacted. If so, we could be required to adjust our expenditures for the remainder of 2010 and for 2011 to conserve working capital or raise additional capital, possibly including debt or equity financing, to fund operations and our growth strategy.

Need for Additional Financing

China Wi-Max's business plan requires funding to develop and expand a new capital intensive business. China Wi-Max has been addressing funding needs for the next twelve months estimated at $10 to $15 million dollars to carry out the business plan. To continue to expand and grow the business beyond twelve months will require significant additional capital and China Wi-Max expects to be continually raising funds for at least the next twenty-four months to thirty-six months. Although management believes there is tremendous upside potential, failure to raise sufficient additional capital could result in reduced growth, or in the worst case, failure of the business. These ongoing capital needs are reflected in the Company's independent registered public accounting firm's Going Concern comments for the audited period ending December 31, 2009.

On July 23, 2010, we entered into a Reserve Equity Financing Agreement (“REF”) with AGS Capital Group, LLC (“AGS”), pursuant to which AGS committed to purchase, from time to time over a period of two years, shares of our common stock for cash consideration up to $10,000,000, subject to various conditions and restrictions. In connection with the REF, we also entered into a registration rights agreement with AGS, dated July 14,2010. The Company‘s ability to require AGS to purchase its common stock is subject to various restrictive limitations. The maximum amount of each advance (as defined in the agreement) is limited to 100% of the average daily trading volume of the Company stock for the five days immediately preceding the advance. The Company also must meet additional conditions which includes but is not limited to the Company filing a Registration Statement with the SEC.  We intend to use the proceeds in connection with acquisitions and joint ventures through our operating subsidiaries in China, and for general working capital purposes. The total shares of stock issued to AGS in consideration of signing the agreement is 1,857,051.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There are several accounting policies that involve management’s judgments and estimates and are critical to understanding our historical and future performance, as these policies and estimates affect the reported amounts of revenue and other significant areas in our reported financial statements.

Please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operation” located within our 10-K for the year ended December 31, 2009, for further discussion of our  “Critical Accounting Policies”.

As discussed in the notes to the interim financial statements, beginning in the third quarter of 2010, we entered into certain promissory notes which contain embedded conversion features, which are accounted for as derivatives.  The following is our critical accounting policy regarding the Company's accounting for such derivatives:

Derivatives

Our derivative instruments (including certain derivative instruments embedded in other contracts) are recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative’s fair value recognized currently in earnings unless specific hedge accounting criteria are met.  We value these derivative securities under the fair value method at the end of each reporting period (quarter), and their value is marked to market at the end of each reporting period with the gain or loss recorded against earnings.  We continue to revalue these instruments each quarter to reflect their current value in light of the current market price of our common stock.  We utilize the Black-Scholes option-pricing model to estimate fair value.  Key assumptions of the Black-Scholes option-pricing model include applicable volatility rates, risk-free interest rates and the instrument’s expected remaining life.  These assumptions require significant management judgment.

6

ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have adopted and maintain 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")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer)and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are ineffective in alerting them timely to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

7

Management's Report on Internal Control over Financial Reporting

This quarterly report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission of newly public companies.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

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

The Company made the following unregistered sales of its securities from January 1, 2010 through September 30, 2010.

DATE OF SALE	TITLE OF SECURITIES	NO. OF SHARES	CONSIDERATION	CLASS OF PURCHASER
1/5/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
1/15/2010	Common stock	80,000	$40,000 Convertible Promissory Note	Business Associate
2/22/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
3/5/2010	Common stock	50,000	$25,000 Convertible Promissory Note	Business Associate
3/8/2010	Common stock	12,000	$6,000 Convertible Promissory Note	Business Associate
3/15/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
3/15/2010	Common stock	50,000	$25,000 Convertible Promissory Note	Business Associate
3/15/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
3/18/2010	Common stock	10,000	$5,000 Convertible Promissory Note	Business Associate
3/18/2010	Common stock	10,000	$5,000 Convertible Promissory Note	Business Associate
3/18/2010	Common stock	30,000	$15,000 Convertible Promissory Note	Business Associate
3/22/2010	Common stock	4,000	$2,000 Convertible Promissory Note	Business Associate
3/24/2010	Common stock	31,000	$15,500 Convertible Promissory Note	Business Associate
3/24/2010	Common stock	40,000	$20,000 Convertible Promissory Note	Business Associate
4/2/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
4/9/2010	Common stock	20,000	$10,000 Convertible Promissory Note	Business Associate
4/9/2010	Common stock	10,000	$5,000 Convertible Promissory Note	Business Associate
4/22/2010	Common stock	10,000	$5,000 Convertible Promissory Note	Business Associate

8

Exemption From Registration Claimed

All of the sales by the Company of its unregistered securities were made by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"). All of the individuals and/or entities listed above that purchased the unregistered securities were almost all existing shareholders, all known to the Company and its management, through pre-existing business relationships, as long standing business associates. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

9

Exhibit 31.1  Certification of Chief Executive  Officer pursuant to Section 302 of the Sarbanes-Oxley Act

Exhibit 31.2  Certification of Chief Financial  Officer pursuant to Section 302 of the Sarbanes-Oxley Act

Exhibit 32.1  Certification of Chief Executive  Officer pursuant to Section 906 of the Sarbanes-Oxley Act

Exhibit 32.2  Certification of Chief Financial  Officer pursuant to Section 906 of the Sarbanes-Oxley Act

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA WI-MAX COMMUNICATIONS, INC.
	(Registrant)
Dated: November 22, 2010	By:	/s/ Steve T. Berman
	Steven Berman
	President
Dated: November 22, 2010	By:	/s/ Frank Ventura
	Frank Ventura,
	Chief Financial Officer

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