Edgar Filing: SIRICOMM INC

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

FORM 10-KSB/A No. 2

Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the fiscal year ended September 30, 2004

Commission File No. 0-18399

SIRICOMM, INC.
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(Exact name of registrant as specified in its charter)

Delaware 62-1386759
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

2900 Davis Boulevard, Suite 130, Joplin, Missouri 64804
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(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (417) 626-9961

N/A
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(Former name and address if changed since last Report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, par value $.001
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(Title of Class)

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 such filing
requirements for the past 90 days.

(1) Yes [X] No [ ]
(2) Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Registrant's revenues for the year ended September 30, 2004: $ -0-

The aggregate market value of the Company's Common Stock held by
non-affiliates of the Registrant as of January 7, 2005 was approximately
$21,738,460 based upon the closing sales price of the Company's Common Stock of
$2.72 on January 7, 2005. (see Footnote (1) below).

APPLICABLE ONLY TO CORPORATE REGISTRANTS:

The number of shares outstanding of the Registrant's class of Common
Stock, par value $.001 per share, as of January 7, 2005, was 16,367,450.

DOCUMENTS INCORPORATED BY REFERENCE:
None

Transitional Small Business Disclosure Format:

Yes [ ] No [X]

(1) The information provided shall in no way be construed as an admission
that any person whose holdings are excluded from the figure is not an
affiliate or that any person whose holdings are included is an
affiliate and any such admission is hereby disclaimed. The information
provided is included solely for recordkeeping purposes of the
Securities and Exchange Commission.

SiriCOMM, Inc. hereby amends and restates in its entirety its Annual Report on
Form 10-KSB for the period ending September 30, 2004, which was filed on January
13, 2005, by filing this amended annual report as provided by the applicable
rules under the Securities and Exchange Act of 1934. The Company has revised
portions of its financial statements and legal disclosure in response to
comments made by the staff of the Securities and Exchange Commission during
their review of the Company's 10-KSB. This Form 10-KSB/A contains a restatement
of the Company's annual financial statements and related disclosure to reflect
its responses to those comments.

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

When used in this Annual Report on Form 10-KSB, the words "may," "will,"
"expect," "anticipate," "continue," "estimate," "intend," "plans", and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ materially from those included within the
forward-looking statements as a result of various factors. Such factors include,
among others: (i) the Company's ability to obtain additional sources of capital
to fund continuing operations; in the event it is unable to timely generate
revenues (ii) the Company's ability to retain existing or obtain additional
licensees who will act as distributors of its products; (iii) the Company's
ability to obtain additional patent protection for its technology; and (iv)
other economic, competitive and governmental factors affecting the Company's
operations, market, products and services. Additional factors are described in
the Company's other public reports and filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revision of these
forward-looking statements to reflect events or circumstances after the date
they are made or to reflect the occurrence of unanticipated events.

PART I

ITEM 1 BUSINESS

Background

The Company was incorporated as a Delaware corporation under the name
"Fountain Pharmaceuticals, Inc the "Company", in April 1989. In approximately
November 2002, the shareholders of SiriCOMM, Inc., a privately-held Missouri
corporation, incorporated in 2000 ("SiriCOMM Missouri"), exchanged all of the
issued and outstanding common stock of SiriCOMM Missouri for a controlling
interest in the Company (the "Reverse Transaction"). As part of the Reverse
Transaction, all of the then officers and directors of the Company resigned and
were replaced by persons designated by SiriCOMM Missouri and the name of the
Company was changed from Fountain Pharmaceuticals, Inc. to SiriCOMM, Inc. As a
result of the Reverse Transaction, SiriCOMM Missouri became a wholly-owned
subsidiary of the Company and the prior shareholders of SiriCOMM Missouri became
the controlling shareholders, officers and directors of the Company. The Company
and SiriCOMM Missouri are hereinafter collectively referred to as the "Company."

The Company's corporate address is 2900 Davis Boulevard, Suite 130,
Joplin, Missouri 64809, its telephone number is 417-626-9971 and its fax number
is 417-782-0475.

SiriCOMM Missouri was founded in 2000 to become a broadband wireless
application service provider to supply productivity and cost reduction software
applications to the commercial vehicle industry and other users whose
effectiveness "over-the-road" requires affordable driver connectivity and
vehicle-access software productivity tools.

The Company announced on October 8, 2004 that it has completed and
intends to open the first phase installation of a nationwide broadband wireless
network (the "Network") that will enable delivery of a wide range of service
provider applications to those businesses and governmental entities directly and
indirectly dependent on the nation's highway transportation system. As of the
date of this report, the Company has generated no significant revenues.

Business

SiriCOMM is in the process of building a national broadband wireless
network that involves populating "hot spots" (i.e., user access sites located at
optimal, high density national highway locations) with wireless local area
network (WLAN) technology (IEEE 802.11b/g) and a dedicated proxy remote site
server (RSS). The WLAN's are connected by satellite uplink to the Company's
central hub server, which, in turn, provides subscribers with high speed,
two-way, broadband access to the Internet. The Company has completed the
installation and is testing approximately 255 sites at Pilot Travel Centers to
be followed by an approximately 145 additional sites at other high traffic
locations, which the Company believes will give it an initial national network
presence.

On December 28, 2004 the Company entered into a memorandum of
understanding with ACS State and Local Solutions, Inc. ("ACS") regarding a pilot
project to assess the value and service delivery capacity for the Company'
network services at ACS's Prepass sites. The pilot project is limited to no more
than ten (10) Prepass weigh station locations.

Upon successful completion of the pilot project, the parties agreed to
explore the possibility of providing value added service to both the government
market and the commercial carrier market through its full implementation in the
approximately 260 sites.

There are four key components to SiriCOMM's network architecture--the
wireless local area network (WLAN), the remote site server (RSS), the satellite
communications link, and the central hub server. The Company believes these
components use the most advanced, proven technologies available today. SiriCOMM
believes it is unique in that these proven technologies have, to the Company's
knowledge, never before been integrated into an end-to-end solution. Internet
protocol data is transmitted from the central hub server across the satellite
system to the WLANs using patented and patent pending technologies to include
data compression, TCP/IP accelerators, and a web doubler. As a result, users
enjoy connection speeds up to 54 Mbps, or, several hundred times that of current
cellular data systems.

SiriCOMM's satellite link is secured through an agreement with ViaSat,
a California-based satellite communications service provider. SiriCOMM selected
ViaSat's LinkStar product, which uses Ku-band to enable wideband transmission of
data between the RSS stations and the central hub server. ViaSat's service, when
combined with SiriCOMM's database replication and data compression technologies,
the Company believes, maximizes the capacity of the satellite bandwidth and
substantially reduces the cost of satellite data communications. As a result,
the Company believes, the system will provide greater bandwidth-to-cost ratios
when compared to other communications options.

SiriCOMM's proprietary RSS incorporates the functions of router,
caching-proxy server, video-on-demand server, web server and e-mail server into
a single compact package. The RSS stations are custom-built computers running a
custom operating system based on the BSD 5.2 kernel (Unix). The servers are
designed for reliable, unattended 24x7 operation and feature mechanisms that
enhance reliability. The operating firmware runs from nonvolatile solid-state
memory, not a mechanical hard disk, which enables the servers to be remotely and
completely reformatted from SiriCOMM's Network Operations Center (NOC). The
Company believes that the unique design features and capacity of the RSS's will
provide substantial opportunity for future applications to include pay-per-view
video, audio file downloading, fleet intranet hosting, distance learning and
other similar services.

With its central hub server (located in Kansas City, Missouri) and
satellite interfaces in place and the first approximately 255 WLAN's nearing
completion of installation and testing, the Company's broadband wireless network
was "switched on" as of October 7, 2004 and is technically operational and
available for use in 38 states. The Company currently plans, within calendar
year 2005, to complete the installation of an additional approximately 600 WLANs
to allow it to be available for service in the entire "lower 48 states" with
sufficient locational "hot spot" density to permit customers convenient, full
service, national access subject to raising additional sufficient capital.

Subscribers will be able to access the Company's portal website,
www.driverconnect.com, using 802.11b/g wireless enabled computers and handheld
devices. The devices can communicate with the WLAN from within one-half a mile
of the WLAN access point--in most cases a highway truck stop, rest area, weigh
station, or port of entry.

Subscribers will be able to access each SiriCOMM WLAN using any of
several devices. The network supports common devices including Palm OS or
PocketPC hand held computers or Windows 98, NT, 2000, or XP PCs, laptops, and
tablets. The only requirements are a compatible 802.11 card having a MAC number
properly registered with SiriCOMM.

When connected to the WLAN, subscribers will be able to exchange
application data, send and receive e-mail, communicate with their company/agency
headquarters' intranet, get updated road conditions, news and weather, and
download games, access business and travel software applications. The satellite
link allows up to 58 megabit per second bursts to all RSS stations from the
central hub server and the RSS stations can communicate back to the central hub
server at data rates up to 3.3 Mbps.

The Company is also negotiating with additional organizations to enter
into strategic alliances to further build out its "hot spot" infrastructure with
a goal of installing approximately 145 additional "hot spots" within 90 days of
finalizing such agreements By the end of calendar year 2005, the Company expects
to have a total of approximately 1,000 sites installed. No assurances can be
given that the Company will be able to achieve such goals unless it is
successful in raising additional capital.

SiriCOMM's Initial Target Markets. With a national network presence,
the Company believes its market of opportunity can serve the commercial trucking
industry, federal and state law enforcement, recreation vehicles, business
travelers, and the general driving public as its initial "Target Markets"

Initially, the Company has directed its market initiatives with a
two-pronged focus:

Trucking. According to the American Trucking Association
Economics and Statistics Group in a report published for the period
January-May 2004, in 2002 the United States trucking industry had over
485,000 fleets, with over 2.6 million Class 8 trucks (excluding
government and farm) in use (by definition, a fleet is one or more
trucks with a U.S. Department of Transportation issued motor carrier
number). To include Classes 3-8, this number rises to 6.1 million
trucks used for business purposes. In this same report, it stated that
4.9 million commercial trailers were registered in 2002. The Company
believes that only 10% of trucks on the road today utilize in-cab data
communications because current solutions are expensive to install,
feature variable monthly service fees, and offer no clearly documented
return on investment.

The Company believes its products and services offer fleet
owners low up-front costs, fixed monthly fees and verifiable returns on
investment. To attempt to provide these returns on investment,
SiriCOMM's solution combines (i) affordable basic broadband Internet
network access coupled with (ii) a suite of products and services, some
proprietary to the Company and others developed by third-parties where
the Company has forged an alliance. These products and services, the
Company believes, address long-standing industry problems through
proprietary software that enables: paperless shipping documents with
signature capture, paperless driver logs, fuel purchasing productivity
software, electronic vehicle performance data, decision support tools,
and other two-way, high bandwidth wireless communications
opportunities.

Government. SiriCOMM is also attempting to develop a suite of
products to be marketed to government agencies. The Company believes it
has a business opportunity with both state and local highway and
traffic authorities as well as, potentially, the Office of Home Land
Security--especially if its WLANs are authorized for points of entry
into the United States of America. No assurances can be given that
these attempts will be successful or result in any significant
revenues.

SiriCOMM's Products and Services. SiriCOMM's business model is a
subscription-based customer access model where businesses and governmental
customers will pay monthly network access fees to subscribe for various services
that the Company plans to provide through a combination of: (i) proprietary
application specific products developed by the Company which are accessible by
customers via the network and (ii) other products and services developed by
third parties which require network access for delivery to the user.

These Products and Services fall generically into two categories:

Basic Internet Access.

IN TOUCH(TM): The Company believes certain of its target
market customers will seek only to subscribe to the Company's service
solely to gain access to the Internet. These target market customers
are likely to be independent truckers, others in the private sector and
certain state and local governmental highway safety and law enforcement
agencies, who seek only basic email and informational access afforded
by the Internet. For this portion of its target market, the Company
will offer it's IN TOUCH(TM) Internet Services Provider service for a
monthly service fee.

Application Specific Productivity Software. Its founders'
believe through experience that next generation commercial vehicle cost
reductions and productivity improvements will come from driver-based
decision support tools. SiriCOMM was founded as a broadband wireless
application service provider to supply productivity and cost reduction
software applications to the commercial vehicle industry. For this
target market segment, the Company intends to offer the following
initial suite of proprietary productivity software tools (the
"Proprietary Software Productivity Tools"):

PULSE(TM): This is a passive wireless device connected to the vehicle
ECM (engine control module) which is programmed with SiriCOMM software
to provide trucking fleet operators with:

o Wireless, remote vehicle diagnostics
o Driver performance diagnostics
o Global Positioning System coordinates (5 minute pings)
o Platform for other functions (wireless scanner, barcode, etc.)

BEACON(TM): This proprietary software product has been developed by the
Company to address critical productivity needs of the trucking
industry--i.e., cost reduction, productivity improvement, safety and
security enhancements. The BEACON(TM) package includes IN TOUCH and,
when bundled with the PULSE(TM) product, will enable greater
functionality. The initial suite of applications within BEACON
includes:

E-freight bill E-maintenance tracking
E-fuel network purchasing E-Pay settlement
E-load finder E-logbook
E-driver referral Fleet intranet hosting

The proposed monthly subscription includes access to the entire suite
of software described above), unlimited Internet access (IN TOUCH), and
a wireless enabled Palm OS client device. The individual components
(i.e., PULSE or BEACON) can also be subscribed to as stand alone
options. The Company has developed a cost justification model, which it
believes can demonstrate expected savings of up to six times the
monthly fee per truck. In addition, the Company believes the BEACON
platform can easily support expansion for other revenue opportunities
to include: pay-per-view movies, advertising, networked gaming,
distance learning, to name a few. However, no specific economic model
has been completed to cost justify these enhancements.

Sales and Marketing. With the initial phase of its network backbone in
place and operational in approximately 38 states, the Company believes that the
sales and marketing initiatives that it undertook while the network was being
installed now has the possibility of generating revenue. These efforts are
two-pronged as follows:

Direct Sales. To market and sell its Proprietary Software Productivity
Tools, the Company employs its own direct sales force. This direct
sales force is primarily (i) marketing to the nation's larger
commercial trucking fleet operators and (ii) following up in an effort
to up-sell selected customers originated by the Company's sales and
marketing alliance partners (see next below). At present, the sales
force is comprised of an Executive Vice President of Sales and a
National Sales Manager. The Company expects that it will hire
additional sales persons as opportunities arise to support such
expansion.

Alliance Partners/VAR's. The Company has established, among others, the
following sales and marketing alliance partners/value-added resellers
(VAR's) in an effort to escalate the time period within which the
Company and its Products and Services gain traction in their Target
Markets. These are:

Idling Solutions. Idling Solutions, LLC ("ISL") is a supplier
of integrated idle reduction solutions for the trucking
industry. Its principal product, the IS9000, includes a high
capacity battery pack and auxiliary heating and cooling unit
for installation on commercial heavy duty trucks. The IS9000
will enable truck fleets to promote fuel conservation by
eliminating idling and, as a result, will also sharply reduce
exhaust emissions and engine maintenance costs. The Company
believes that, because off-duty truck drivers sleep in the
cabs of their trucks, they have had to depend on idling their
truck engines to generate heat or air conditioning as well as
power for appliances such as laptops, radios, and televisions.
The IS9000 power pack replaces the conventional starter

batteries and also supports comfort amenities for drivers. The
system contains enough power to keep a truck tractor and
sleeper comfortable for ten or more hours. ISL and SiriCOMM
have an exclusive agreement under which SiriCOMM will provide
wireless subscription service for trucks using the IS9000
product. Through this agreement the Company will deliver data
necessary for ISL to verify warranty performance of the IS9000
and file on behalf of its customers Mobile Emissions
Reductions Credits (MERC) tax credits. The Company will charge
a nominal subscription rate per month which will provide the
ISL customers with minimal amounts of data and the Company
expects to "upsell" its BEACON and PULSE services to a
substantial number of the ISL subscribers. The purpose of
these services is to provide a real-time, certifiable record
that the truck was not moving and was, indeed, turned off.

Getloaded.com. The Company has entered into a value-added
reseller (VAR) agreement with Getloaded.com, one of the
nation's largest freight matching services. Getloaded.com
currently has approximately 16,000 fleets and approximately
250,000 trucks subscribing to its freight matching services.
Getloaded.com believes that its relationship with SiriCOMM
will enable it to migrate from a call center-based business
model to a primarily on-line service. Getloaded.com has
verbally informed the Company that it plans to sell
subscriptions to SiriCOMM's ISP through its call center and
its billing services operations.

DriverTech. DriverTech, a Salt Lake City-based supplier of
ruggedized vehicle computers for the U.S. military, has signed
an agreement with the Company. Under terms of the agreement,
DriverTech's TruckPC, the commercial version of its military
product that is in wide use in Iraq and Afghanistan, will use
SiriCOMM's network as its primary communications medium. In
addition, DriverTech will be a value-added reseller of
SiriCOMM's BEACON(TM) products. The addition of BEACON, the
Company believes, gives TruckPC far greater functionality and
portability. Presently, DriverTech has verbally informed the
Company that it has scheduled several large truckload fleets
to beta test its product.

Others. In connection with certain strategic WLAN sitting
agreements that are currently being negotiated, prospective
alliance partners also seek to enter into VAR arrangements
with the Company to be resellers of the Company's Products and
Services.

In each of these VAR arrangements, the Company compensates the VAR with
a percentage of the revenues generated as a result of the VAR's sales
and marketing success. No assurances can be given as to when, if ever,
these arrangements will generate significant revenue to the Company.

Competition. Based upon the Company's business approach and pioneering
technology, the Company believes that there currently are no direct competitors
in the trucking or highway wireless market. However, competition is inevitable
and the Company believes existing entities as well as new entities will enter
the marketplace. Many of such entities will have substantially more funds,
experience, employees and other resources than the Company. As a result, no

assurances can be given the Company will be able to compete with such entities.
SiriCOMM, however, believes it has certain technological advantages and its
affordable productivity tools, extensive industry experience, and patents
pending present certain entry barriers for potential competitors.
Notwithstanding, there are several competitors whose services "overlap"
SiriCOMM's service offerings to some extent. These include Qualcomm, Aether
Systems, @tracks (formally Highway Master), PeopleNet, PSTN-based WLAN
providers, and wireless telecommunications companies.

Qualcomm. Qualcomm's satellite communications and tracking system
provides Global Positioning System (GPS) truck locating and low
bandwidth text messaging transmissions. Qualcomm currently has
approximately 425,000 units installed worldwide. The system functions
well, but offers limited benefits to companies according to many
subscribers. Management believes that this system is very costly to
purchase, install, and operate. There is a minimum monthly messaging
fee and additional charges per character when the minimum is exceeded.

Aether Systems (acquired by Platinum Equity- Sept. 20, 2004). Aether's
transportation services division provides services very similar to
those of Qualcomm. Although it has several truckload fleet customers as
a result of its acquisition of @tracks, its principal base of customers
is service fleets such as Sears, JC Penney, etc. Like Qualcomm its
principal services include tracking and text messaging. Its equipment
and monthly usage fees are expensive, management believes, by industry
standards .

@tracks. Acquired by Aether in April, 2002, this mobile communication
product is designed to address communication and information needs of
the trucking industry. The system allows trucking companies, brokers,
and families to communicate with drivers who are on the road. In
addition, the system can send and receive data and messages, determine
GPS truck location, manage and track loads, and track vehicle mileage.
Data is transferred using a combination of cellular and satellite
technology. Consequently, the system is viewed by management to be
expensive to purchase and install, though less than Qualcomm. The
monthly usage fees, however, are extremely high compared to Qualcomm
due principally to the cellular component of the service. Relatively
few of these units are in service compared to Qualcomm.

PeopleNet. PeopleNet provides web-based fleet communications ranging
from GPS tracking only to low bandwidth text, voice and applications.
PeopleNet operates on Aeris.Net's Microburst service, a technology that
uses underutilized portions of partner cellular provider's channels to
send and receive small packets of data. For fleets electing to install
the full suite of equipment and services, PeopleNet offers several
applications similar to SiriCOMM's. However, as it is a low bandwidth
solution it does not offer Internet, intranets, or other applications
requiring higher bandwidth. Equipment costs and monthly service fees
are comparatively high, though somewhat less than Qualcomm, and
equipment installation must be performed at one of PeopleNet's hub
facilities.

PSTN-Based WLAN Providers. PSTN-based WLAN providers are companies that
install wireless LANs using public switched telephone networks (PSTN),
usually T-1 lines or digital subscriber lines, for access to the
Internet. These businesses typically target business travelers with
Internet and email access in airports, coffee shops and hotel lobbies.
Monthly service charges are high in comparison to the other services

and applications provided. For example, Boingo, a nationwide hot spot
aggregator, charges $79.95 per month for unlimited access. Though these
providers are identified as competition, SiriCOMM anticipates
developing roaming agreements with key identified hot spot providers.

Government Regulation and Industry Standards

SiriCOMM's products and services are currently not regulated by the FCC
or local governments. The regulatory process in the United States can be
time-consuming and can require the expenditure of substantial resources. There
is no assurance that the FCC or state regulatory agencies will not seek to
regulate the use of frequencies utilized by SiriCOMM's services or, if such
services are regulated, grant the requisite approvals for any of SiriCOMM's
products on a timely basis, or at all. The failure of SiriCOMM's products to
comply, or delays in compliance, with the various existing and evolving
standards could negatively impact SiriCOMM's ability to market its products and
services. United States and state regulations regarding the manufacture and sale
of modems and other data communications devices are subject to future change. We
cannot predict what impact, if any, such changes may have on SiriCOMM's
business.

Employees

The Company currently has 9 employees of which 4 are executive
officers. Our employees are not unionized, and the Company believes its
relationship with its employees is good.

ITEM 2 PROPERTIES

We operate our business in a leased facility. We occupy approximately
1,200 square feet in a building in Joplin, Missouri. Our rent for this space is
$1,200 per month. The Company leases the space on a month-to-month basis.

ITEM 3 LEGAL PROCEEDINGS

On December 17, 2004, Henry Hoffman, Kory Dilman, David Mendez, Tom
Noland, Richard Iler and Terry Thompson were named defendants in a lawsuit
entitled Greg Sanders v. Henry Hoffman et al. Messrs. Hoffman, Dilman, Mendez
and Iler are officers and directors of the Company, Mr. Thompson is a director
of the Company and Mr. Noland is a former officer and director of the Company.
The action was brought in the Circuit Court of Jackson County, Missouri at
Kansas City (04CV236387). The action alleges fraud, misrepresentation and breach
of fiduciary duty relating to a settlement agreement entered into between the
Company and Mr. Sanders. The Company is not a party to this lawsuit. The
complaint seeks damages in excess of $9,679,903. The Company will pay all
expenses relating to the defense of this matter. In management's opinion this
case is without merit and the defendants intend on defending this matter
vigorously.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to the Company's security holders for a
vote during the course of the fourth quarter of this fiscal year.

PART II

ITEM 5 MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

A. Market Information

The Company's Common Stock presently trades on the OTC Bulletin Board
under the symbol "SIRC". From May 31, 1994 until November 21, 2002 our
predecessor's Common Stock traded on the OTC Bulletin Board under the symbol
"FPHI."

As of January 7, 2005, we had 16,367,450 outstanding shares of common
stock, $.001 par value.

As of January 7, 2005 we had outstanding 213,417 shares of Series A
Cumulative Convertible Preferred Stock ("Series A Preferred Stock"). Each share
of Series A Preferred Stock converts into our Common Stock at the rate of $2.00
per share.

As of January 7, 2005 we had outstanding 3,803,018 warrants and
options.

The following table sets forth certain information with respect to the
high and low market prices of the Company's Common Stock for the fiscal years
ended September 30, 2002, 2003, and 2004. The high and low market prices for the
fourth quarter of 2002 reflect a 60-for-1 reverse stock split effective November
21, 2002. Prior periods to November 21, 2002 do not reflect the effects of
reverse stock split within the stock price.

Fiscal 2002 HIGH LOW
----------- ---- ---

First Quarter $.05 $.01
Second Quarter $.08 $.02
Third Quarter $.06 $.025
Fourth Quarter $4.25 $1.20

Fiscal 2003 HIGH LOW
----------- ---- ---

First Quarter $4.00 $1.25
Second Quarter $2.25 $1.20
Third Quarter $2.40 $0.99
Fourth Quarter $2.00 $0.80

Fiscal 2004 HIGH LOW
----------- ---- ---

First Quarter $1.40 $0.95
Second Quarter $4.90 $1.02
Third Quarter $6.00 $3.70
Fourth Quarter $5.15 $2.75

The closing price of the Company's Common Stock on January 7, 2005 was
$2.72.

The high and low prices are based on the average bid and ask prices for
the Company's Common Stock, as reported by the OTC Bulletin Board. Such prices
are inter-dealer prices without retail mark-ups, mark-downs or commissions and
may not represent actual transactions.

B. Holders

Records of the Company's stock transfer agent indicate that as of
January 7, 2005, the Company had 114 record holders of its Common Stock. Since a
significant number of the shares of the Company are held by financial
institutions in "street name," it is likely that the Company has significantly
more stockholders than indicated above. The Company estimates that it has
approximately 1,000 beneficial holders, including such shares held in "street
name."

C. Dividends

The Company has not paid any cash dividends, to date, and does not
anticipate or contemplate paying cash dividends in the foreseeable future. It is
the Board of Directors intention to utilize all available funds for working
capital of the Company.

D. Recent Sales of Unregistered Securities

On November 21, 2002, the Company completed the acquisition of all of
the issued and outstanding shares of SiriCOMM, Inc. (Missouri). An aggregate of
9,712,867 shares were issued to SiriCOMM's 18 shareholders, including 5,762,303
issued to Henry P. Hoffman, the Company's President, CEO and Chairman, 1,098,331
issued to David N. Mendez, the Company's Executive V.P. - Sales and Marketing
and a Director and 1,023,535 issued to Kory S. Dillman, the Company's Executive
V.P. - Internet Business Development and a Director. The shares were issued
under the exemption from registration provided in Section 4(2) of the Act.

On January 7, 2003, the Company issued 29,525 shares of its Common
Stock to David and Rebecca Seidl and issued 19,683 shares of its Common Stock to
John Cesta and Patti Ann's Dreams, Inc. in connection with loans made to the
Company in the aggregate amount of $125,000. The shares were issued under the
exemption from registration provided in Section 4(2) of the Act.

On January 7, 2003, the Company issued 868,000 shares of its Common
Stock to Jeff Wasson and 1,054,000 shares of its Common Stock to Quest Capital
Alliance, L.L.C., pursuant to the conversion of convertible debt in the
aggregate of $1,000,000. The shares were issued under the exemption from
registration provided in Section 4(2) of the Act.

On February 12, 2003, the Company issued 9,842 shares of its Common
Stock to Carlye Wannenmacher in connection with a loan made to the Company in
the amount of $25,000. The shares were issued under the exemption from
registration provided in Section 4(2) of the Act.

On April 14, 2003, the Company issued 107,000 shares of its Common
Stock to Finter Bank Zurich pursuant to the conversion of convertible debt in
the principal amount of $100,000 plus $7,000 of accrued interest. The shares
were issued under the exemption from registration provided in Section 4(2) of
the Act.

On July 23, 2003, the Company issued an aggregate of 39,366 shares of
its Common Stock to four individuals including 9,842 shares to Terry W.
Thompson, who later became a Director of the Company in August 2003, in
connection with loans made to the Company in the aggregate amount of $100,000.
The shares were issued under the exemption from registration provided in Section
4(2) of the Act.

On August 18, 2003, the Company issued 55,944 shares of its Common
Stock to The Research Works, Inc. pursuant to a letter agreement. The shares
were issued under the exemption from registration provided in Section 4(2) of
the Act.

On September 30, 2003, the Company issued 20,000 shares to Joel C.
Schneider, Esq. (10,000) and Herbert H. Sommer, Esq. (10,000) Partners of the
Company's securities counsel, Sommer & Schneider, LLP The shares were issued
under the Company's 2002 Equity Incentive Plan and were registered on Form S-8
on April 14, 2003 (SEC File No. 333-104508).

On November 17, 2003, the Company granted an aggregate of 175,000 stock
options to J. Richard Iler (125,000), who became our Chief Financial Officer and
Jackie Seneker (50,000), an employee of the Company. These options were granted
under the Company's 2002 Equity Incentive Plan. The exercise price of these
options is $1.00 per share. The shares underlying the options were registered on
Form S-8 on April 14, 2003 (SEC File No. 333-104508).

On December 5, 2003, the Company issued 34,000 shares of its Common
Stock to MCC Securities, Inc. pursuant to an agreement. The shares were issued
under the exemption from registration provided in Section 4(2) of the Act.

On December 10, 2003, the Company issued an aggregate of 213,417 shares
of its Series A Preferred Stock to Quest Capital Alliance L.L.C. (161,165) and
William and Joy Fotsch (52,252) pursuant to the conversion of an aggregate of
$200,000 of principal plus $13,417 of interest due by the Company. The shares
were issued under the exemption from registration provided in Section 4(2) of
the Act.

In November 2003, Robert J. Smith converted $154,443 of debt due to him
by the Company into a like number of the Units comprised of shares and 3 year
warrants exercisable at $2.00 per share.

On January 15, 2004, the Company issued 56,000 shares of its common
stock to Mr. Robert Smith pursuant to the exercise of a stock option for a like
number of shares. The option was granted to Mr. Smith under the Company's 2002
Equity Incentive Plan. The exercise price of the option was $.50. The shares
underlying the option were registered on Form S-8 on April 14, 2003 (SEC File
No. 333-104508).

On February 23, 2004, the Company issued an aggregate of 20,610 shares
to Joel C. Schneider, Esq. (10,305) and Herbert H. Sommer, Esq. (10,306),
partners of the Company's securities counsel, Sommer & Schneider LLP. The shares
were issued in lieu of $24,000 of outstanding legal fees due the firm. The
shares were issued under the Company's 2002 Equity Incentive Plan and were
registered on Form S-8 on April 14, 2003 (SEC File No. 333-104508).

On February 26, 2004, J. Richard Iler received 20,000 options
exercisable for three years at $1.49 per share. The shares were issued under the
Company's 2002 Equity Incentive Plan and were registered on Form S-8 on April
14, 2003 (SEC File No. 333-104508).

On March 9, 2004 the Company granted an aggregate of 14,500 stock
options to employees of Vehicle Enhancement Systems, Inc., a consulting company
engaged by the Company. The options were granted to the following individuals:
The shares were issued under the Company's 2002 Equity Incentive Plan and were
registered on Form S-8 on April 14, 2003 (SEC File No. 333-104508).

Bobby Ray Weant - 7,000
Margot Kaiser - 3,500
Barry Hodges - 2,200
Pero Ilic - 1,800
14,500

On March 10, 2004 the Company closed the sale of 2,000,000 units
("Units") at $1.00 per Unit to twenty-seven accredited investors. Each Unit
consists of one share of the Company's common stock and one three-year warrant
exercisable at $2.00 per share. Among the investors in this offering was Mr.
Terry W. Thompson, a director of the Company who purchased 100,000 Units. The
Units were issued under the exemption from registration provided in Section 4(2)
of the Act.

In February 2004, the Company issued an aggregate of 200,000 warrants
to Clark Burns (100,000) and Philip Snowden (100,000). The warrants are
exercisable for three (3) years at an exercise price of $.50 per share. The
warrants were issued under the exemption from registration provided in Section
4(2) of the Act.

On March 10, 2004 the Company issued 331,951 Units to five investors
upon the conversion of an aggregate of $331,951 of debt due by the Company to
these investors. Among the investors converting their debt was Mr. Terry W.
Thompson, direct of the Company who converted $50,600 of debt into 50,600 Units.
These Units were issued under the exemption from registration provided in
Section 4(2) of the Act.

On March 15, 2004 the Company granted an aggregate of 25,000 stock
options to Mr. Derrick Woolworth, our Director of Architecture Engineering. The
options are exercisable at the price of $3.40 per share. Of the 25,000 options,
15,000 vested immediately and the balance of 10,000 are subject to vesting based
on him achieving certain performance goals. The options were granted and were
issued under the Company's 2002 Equity Incentive Plan and were registered on
Form S-8 on April 14, 2003 (SEC File No. 333-104508).

On March 18, 2004 the Company issued 27,656 Units comprised of 27,656
shares and 27,656 three year warrants exercisable at $2.00 per share to Marvin
and Donna McDaniel upon the conversion of $27,656 of debt due by the Company to
the McDaniels. The Units were issued under the exemption from registration
provided in Section 4(2) of the Act.

On April 5, 2004, the Company granted to Les Hazen, its National Sales
Manager, 25,000 stock options, the shares underlying this option are registered
on Form S-8 filed with the SEC on April 14, 2003 (SEC File No. 333-104508). The
options are exercisable at $4.05 and have a ten year term. The options were
granted under the Company's 2002 Equity Incentive Plan.

On April 7, 2004, the Company issued 436,000 shares of its Common Stock
to Gunner Investments, Inc. pursuant to a consulting agreement. The shares were
issued under the exemption from registration provided in Section 4(2) of the
Act.

On April 7, 2004 the Company issued to the principals of Layne Morgan
Technology Group an aggregate of 100,000 shares of its common stock and 150,000
three-year common stock purchase warrants exercisable at $1.50 per share
pursuant to a consulting agreement. The shares and warrants were issued under
the exemption from registration provided in Section 4(2) of the Act.

On April 21, 2004 the Company issued 7,000 shares of its Common Stock
to Mr. Bobby Ray Weant pursuant to the exercise of a stock option for a like
number of shares. The option was granted to Mr. Weant under the Company's 2002
Equity Incentive Plan. The exercise price of the option was $1.00. The shares
underlying the option were registered on Form S-8 on April 14, 2003 (SEC File
No. 333-104508).

On May 4, 2004 the Company closed the sale of 328,143 units ("Units")
at $3.40 per Unit to fourteen accredited investors. Each Unit consists of one
share of the Company's common stock and one quarter (1/4) of a three-year
warrant exercisable at $4.75 per share. The Units were issued under the
exemption from registration provided in Section 4(2) of the Act.

In May 2004 the Company issued to Mark Sullivan 150,000 three-year
options, exercisable at $3.40 per share. The options were granted to Mark
Sullivan and his designees under the Company's 2002 Equity Incentive Plan. The
shares underlying the option were registered on Form S-8 on April 14, 2003 (SEC
File No. 333-104508

On July 5, 2004, the Company granted to Vincent Toms, Senior Software
Architect 10,000 options, the shares underlying this option are registered on
Form S-8 filed with the SEC on April 14, 2003 (SEC File No. 333-104508). The
options are exercisable at $4.50 per share. The options were granted under the
Company's 2002 Equity Incentive Plan.

On July 24, 2004, the Company granted an additional 10,000 options to
Derrick Woolworth, exercisable at $4.05 per share. The option was granted to Mr.
Woolworth under the Company's 2002 Equity Incentive Plan. The shares underlying
this option are registered on Form S-8 filed with the SEC on April 14, 2003 (SEC
File No. 333-104508).

On July 30, 2004, we granted to ServeTheWeb.com, L.L.C. 2,979 shares of
Common Stock as consideration for the purchase of billing software to be used by
the Company. These shares are registered on Form S-8 filed with the SEC on April
14, 2003 (SEC File No. 333-104508). The shares were granted pursuant to the
Company's 2002 Equity Incentive Plan.

As of August 4, 2004, the Company issued 19,500 shares of its Common
Stock to Staunton McLane pursuant to the exercise of a stock option for a like
number of shares. The exercise price of these options is $1.00. The shares
underlying the option were registered on Form S-8 on April 14, 2003 (SEC File
No. 333-104508). As of the date of this report, Staunton McLane has a balance of
53,900 options, each exercisable at $1.00 per share.

As of August 11, 2004 and October 18, 2004, Mr. J. Richard Iler, the
Company's Chief Financial Officer and a Director, exercised 3,500 and 700 stock
options, respectively, at $1.00 per share. The options were previously granted
pursuant to the Company's 2002 Equity Incentive Plan. These shares are
registered on Form S-8 filed with the SEC on April 14, 2003 (SEC File No.
333-104508).

On September 2, 2004, the Company granted an aggregate of 20,000 stock
options to Mr. Austin M. O'Toole (10,000) and Mr. Terry W. Thompson (10,000),
both of whom are outside directors of the Company. These options vest over three
years:

o 4,000 at the end of year 1
o 3,000 at the end of year 2; and
o 3,000 at the end of year 3

The options were granted under the Company's 2002 Equity Incentive
Plan. The exercise price of these options is $4.05 per share. The shares
underlying the options were registered on Form S-8 on April 14, 2003 (SEC File
No. 333-104508).

On September 23, 2004, the Company issued 26,375 Units comprised of
26,375 shares and 26,375 three year warrants exercisable at $2.00 per share to
William and Susann Perkin upon the conversion of $26,375 of debt due by the
Company to the Perkins. The Units were issued under the exemption from
registration provided in Section 4(2) of the Act

As of November 1, 2004, Ms. Jackie Seneker, an employee of the Company,
exercised 7,500 stock options at $1.00 per share. The options were previously
granted pursuant to the Company's 2002 Equity Incentive Plan. These shares are
registered on Form S-8 filed with the SEC on April 14, 2003 (SEC File No.
333-104508).

As of December 31, 2004, SiriCOMM, Inc. consummated the private
placement of its units (the "Units") pursuant to a Confidential Investment
Proposal dated October 11, 2004 and amended on December 20, 2004 Each Unit
consisted of 50,000 shares (the "Shares") of the Company's common stock and a
Common Stock Warrant to purchase 37,500 shares of Common Stock . In the Private
Placement, the Company sold an aggregate of 6.38 Units (319,000 Shares and
Warrants to purchase 239,250 shares of Common Stock) for an aggregate purchase
price of $638,000, or $100,000 per Unit.

The Warrants entitle the holders to purchase shares of the Common Stock
(the "Warrant Shares") for a period of five years from the date of issuance at
an exercise price of $2.40 per share. The Warrants contain certain anti-dilution
rights and are redeemable by the Company, on terms specified in the Warrants.

In connection with the Private Placement, Sands Brothers International
Limited, the placement agent in the Private Placement, received a cash
commission fee of nine (9%) of the gross proceeds to the Company of the
securities sold at the closing, a payment of $30,000 representing the fees and
expenses of its counsel in the Private Placement and Warrants (the "Agent
Warrants") to purchase ten percent (10%) of the Shares sold in the Private
Placement (the "Agent Shares"). The Agent Warrants are exercisable for a period
of five years at an exercise price of $2.40 per share and contain the same
anti-dilution rights as the Warrants.

Pursuant to the Offering Documents, the Company also agreed to file
with the Securities and Exchange Commission a Registration Statement covering
the Shares, the Warrant Shares and the Agent Shares. If such Registration
Statement is not filed within the required time frame, or does not become
effective within 120 days of the closing date, the Company has agreed to pay to
the investors 1% of the gross proceeds of the Private Placement for each thirty
(30) day period in which the Company fails to comply with such requirements.

On January 5, 2005 the Company issued an aggregate of 85,000 shares of
its Common Stock upon the exercise of a like number of warrants, exercisable at
$2.00 per share. The warrants were originally issued in January 2004 pursuant to
a private placement of the Company's units consisting of common stock and
warrants.

As an inducement to the investors exercising their warrants, the
Company issued an aggregate of 63,750 new warrants to the investors. The new
warrants entitle the holders to purchase shares of the Company's common stock
reserved for issuance thereunder for a period of five years from the date of
issuance at an exercise price of $2.40 per share. The warrants contain
anti-dilution rights and are redeemable by the Company, in whole or in part, on
terms specified in the warrants.

As a further inducement to the investors exercising their warrants, the
Company also agreed to file with the Securities and Exchange Commission a
Registration Statement covering the shares purchased by each investor as part of
the units, the shares issued upon exercise of the warrants and the shares
underlying the new warrants.

The cash proceeds of the above sales of securities of the Company were
used for general corporate purposes in developing the Company's planned
services.

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Background

Critical Accounting Policies and Estimates:

Our financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make significant
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosure of contingent assets and liabilities.
We evaluate our estimates, including those related to contingencies, on an
ongoing basis. We base our 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
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.

We believe the following critical accounting policy, among others;
involve the more significant judgments and estimates used in the preparation of
our consolidated financial statements:

The Company accounts for compensation costs associated with stock
options and warrants issued to non-employees using the fair-value based method
prescribed by Financial Accounting Standard No. 123 - Accounting for Stock-Based
Compensation. The Company uses the Black-Scholes options-pricing model to
determine the fair value of these instruments as well as to determine the values
of options granted to certain lenders by the principal stockholder. The
following estimates are used for grants in 2004: Expected future volatility over
the expected lives of these instruments is estimated to mirror historical
experience of 75 %; expected lives of 2 years is estimated based on management's
judgment of the time period by which these instruments will be exercised.

Information Relating To Forward-Looking Statements

When used in this Annual Report on Form 10-KSB, the words "may,"
"will," "expect," "anticipate," "continue," "estimate," "intend," "plans", and
similar expressions are intended to identify forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ materially from those included within the
forward-looking statements as a result of various factors. Such factors include,
among others: (i) the Company's ability to obtain additional sources of capital
to fund continuing operations; in the event it is unable to timely generate
revenues (ii) the Company's ability to retain existing or obtain additional
licensees who will act as distributors of its products; (iii) the Company's
ability to obtain additional patent protection for its technology; and (iv)
other economic, competitive and governmental factors affecting the Company's
operations, market, products and services. Additional factors are described in
the Company's other public reports and filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revision of these
forward-looking statements to reflect events or circumstances after the date
they are made or to reflect the occurrence of unanticipated events.

Results of Operations

During fiscal 2004, SiriCOMM advanced its efforts towards
commercialization of its products and services. To that end, SiriCOMM reached
various agreements with original equipment manufacturers, truck-stop operators
and other sales agents.

Operating expenses increased from $1,599,608 in 2003 to $2,585,327 in
2004 as a direct result of the Company's developing and marketing its products
and services, increased professional expenses and costs associated with raising
debt and equity financing. Included in operating expenses in 2004 is an

aggregate of $50,000 in stock-based compensation charges for the intrinsic value
of options granted to Company personnel. Research and development expenses were
minimal and decreased to $26,450 in 2004 from $77,567 in 2003 due to cash flow
considerations.

Interest expense decreased to $26,578 in 2004 from $50,948 in 2003. The
decrease is attributable to the retirement of notes and conversion of several
debt obligations into equity.

Liquidity and Management's Plan of Operations

SiriCOMM is a development-stage entity engaged in the development of
broadband wireless applications service provider technologies for the marine and
highway transportation industries. The Company's current development activities
include integrating multiple technologies including satellite communications,
the Internet and intranets, wireless networking and productivity enhancing
software into commercially viable products and services for its target
industries.

On November 21, 2002, The Company completed the acquisition of all of
the issued and outstanding shares of SiriCOMM, Inc., a Missouri Corporation.
9,712,867 shares of common stock were issued to the former shareholders of the
Missouri Corporation. Furthermore, the Company issued 1,922,000 shares to retire
$1,000,000 of convertible debentures issued by the Missouri Corporation. As a
result and following completion of the acquisition, the sole director of
SiriCOMM resigned and four of SiriCOMM's new principal shareholders were elected
in his place.

Since SiriCOMM was the acquirer for accounting and financial reporting
purposes, the transaction was accounted for in accordance with reverse
acquisition accounting principles as though it were a recapitalization of
SiriCOMM and a sale of shares by SiriCOMM in exchange for the net assets of
Fountain. These financial statements include the historical results of
operations and cash flows of SiriCOMM-Missouri.

Since its inception, SiriCOMM has financed its activities primarily
from short-term loans and private sales of its securities. During fiscal 2003,
the Company borrowed an aggregate of $680,000 from several lenders. The Company
issued promissory notes to these lenders. The notes had varying interest rates
ranging from 4% to 10%. In addition, of the $680,000, an aggregate of
approximately $570,000 was converted into preferred or common equity of the
Company during the first and second quarters of fiscal 2004. The Company has
also raised proceeds through the private sale of its equity. In March 2004 a
private placement consisting of 2,000,000 units at a $1.00 per unit was
completed, each unit consisting of one share of the Company's common stock and
one three-year warrant exercisable at $2.00 per share. In May 2004, the Company
completed a private placement of 328,143 units at $3.40 per unit. Each unit
consisted of one share of common stock at $3.40 per unit and one quarter (1/4)
three year warrant exercisable at $4.75 per share. The Company received proceeds
of $1,115,689.

In October, 2004, the Company borrowed $200,000 on its line of credit
facility with Southwest Missouri Bank. The proceeds were paid to Sat-Net in
conjunction with the installation and distribution of hotspots.

Common Stock Warrant to purchase 37,500 shares of Common Stock . In the Private
Placement, the Company sold an aggregate of 6.38 Units (319,000 Shares and
Warrants to purchase 239,250 shares of Common Stock) for an aggregate purchase
price of $638,000, or $100,000 per Unit.

The cash proceeds of the above sales of securities of the Company were
used for general corporate purposes in developing the Company's planned
services.

The Company will continue its installation plans toward denser coverage
of its nation wide network. Additional financing will be required to fund such
installations, but there can be no assurances that the Company will be able to
obtain such funds under acceptable terms.

Contractual Obligations and Commercial Commitments

Contractual obligations as of September 30, 2004 are as follows:

Payments Due by Period
- ----------------------------- --------------- ---------------- ---------------- -------------- ----------------------
Contractual Less than After
Obligations Total 1 year 1-3 years 4-5 years 5 years
- ----------------------------- --------------- ---------------- ---------------- -------------- ----------------------

Line of credit and note
payable $147,000 $147,000 $ - $ -
- ----------------------------- --------------- ---------------- ---------------- -------------- ----------------------
Operating leases - - - - -
- ----------------------------- --------------- ---------------- ---------------- -------------- ----------------------
Total contractual cash
obligations $147,000 $147,000 $ - $ -
- ----------------------------- --------------- ---------------- ---------------- -------------- ----------------------

Recent Accounting Pronouncements

In December 2003, the FASB issued Interpretation No. 46 (revised),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,"
("FIN 46R"). FIN 46R addresses how a business enterprise should evaluate whether
it has a controlling financial interest in an entity through means other than
voting rights and, accordingly, should consolidate the variable interest entity
("VIE"). Fin 46R replaces FIN46 that was issued in January 2003. All public
companies were required to fully implement FIN 46R no later than the end of the
first reporting period ending after March 15, 2004. The adoption of FIN 46R had
no impact on SiriCOMM's financial condition or results of operations.

On December 16, 2004, the Financial Accounting Standards Board (FASB)
issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a
revision of FASB Statement No. 123, Accounting for Stock-Based Compensation.
Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and amends FASB Statement No. 95, Statement of Cash Flows. The
approach to accounting for share-based payments in Statement 123(R) is similar
to the approach described in Statement 123. However, Statement 123(R) requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair values
and no longer allows pro forma disclosure as an alternative to financial
statement recognition. The Company will be required to adopt Statement 123(R) at
the beginning of its quarter ending March 31, 2006. The Company has not
determined what financial statement impact Statement 123(R) will have on the
Company.

COMMITMENTS

We do not have any commitments that are required to be disclosed in
tabular form as of September 30, 2004.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements.

RISK FACTORS THAT MAY AFFECT RESULTS OF OPERATIONS AND FINANCIAL CONDITION

This report contains forward-looking statements and other prospective
information relating to future events. These forward-looking statements and
other information are subject to risks and uncertainties that could cause our
actual results to differ materially form our historical results or currently
anticipated results include the following:

No Revenues; Net Losses; Accumulated Deficit

Since its inception, the Company has generated no revenues, incurred
substantial net losses, and currently is experiencing a substantial cash flow
deficiency from operations. Based upon the Company's audited financial
statements, the Company incurred net losses of $2,778,407 for the fiscal year
ended September 30, 2004. As of September 30, 2004, the Company had a deficit
accumulated during its development stage of $6,701,021.

We have a limited operating history making it difficult to evaluate our business
and our future prospects.

To date, the Company has generated no revenues and has a very limited
operating history on which investors can evaluate its potential for future
success. Potential investors should evaluate the Company in light of the
expenses, delays, uncertainties, and complications typically encountered by
early-stage businesses, many of which will be beyond the Company's control.
These risks include the following:

o lack of sufficient capital,
o unanticipated problems, delays, and expenses relating to
product development and implementation,
o lack of intellectual property,
o licensing and marketing difficulties,
o competition,
o technological changes, and
o uncertain market acceptance of the Company's products and
services.

As a result of its limited operating history, its plan for rapid
growth, and the increasingly prospective competitive nature of the markets in
which it competes, the Company's historical financial data are of limited value
in anticipating future operating expenses. The Company's planned expense levels
will be based in part on its expectation concerning future revenue, which is
difficult to forecast accurately based on its stage of development. The Company
may be unable to adjust spending in a timely manner to compensate for any
unexpected shortfall in revenue. Further, business development and marketing
expenses may increase significantly as the Company expands operations. To the
extent that these expenses precede or are not rapidly followed by a
corresponding increase in revenue, the Company's business, operating results,
and financial condition may be materially and adversely affected. The Company's
ability to generate revenue is uncertain and the Company may never achieve
profitability.

The Company's assumption of commercialization.

There can be no assurance that, when the products and services are
fully operational and the Company's nationwide broadband wireless network opens
for business, either (i) target market prospective customers of the Company will
do business with the Company or (ii) the level of business generated by the
Company, if any, will be sufficient for the Company to generate a profit and
sustain its business activities.

The Company requires significant additional capital to complete the installation
of its national broadband wireless network.

The Company's nationwide broadband wireless network is only partially
built and significant capital is required by the Company to install the full
number of WLAN site the Company believes are required to offer a nationwide
network offering our products and services. There can be no assurance that the
Company will be able to raise this additional required capital. If such capital
is not raised, there can be no assurance that the Network as it is currently
installed in 38 states is sufficiently dense or nationally robust enough to have
functional utility for our potential customers.

The Company expects to compete with large, well-capitalized companies.

Although the Company believes that it has no direct competitors,
certain companies "overlap" parts of SiriCOMM's business model. There can be no
assurance that these companies, who are larger and better capitalized, will not
respond to competitive pressures presented by SiriCOMM's business model. There
can be no assurance that we will be able to establish the credibility, the
products and services and financial position needed to successfully compete
against these competitors. Failure to do so could mean that the Company will
substantially under-perform versus its expectations.

The Company will compete in an industry that is characterized by rapid change in
technology.

The business that SiriCOMM is launching is subject to rapid change and
evolution of the technology platforms, products and services available to
customers. There can be no assurance that either (i) the suite of products and
services that the Company has developed are currently the most up-to-date and
competitively priced or (ii) that such suite of products and services will not
be made obsolete as a result of the technology developments of competitors.
Failure of the Company to have, maintain and continue to develop or acquire
leading edge technology could mean that the Company will substantially
under-perform versus its expectations.

The Company's business model requires that it continually develop and augment
its suite of products through internal development and acquisitions.

The Company's business model is dependent on its ability to augment its
initial suite of products and services with additional products and services
important to providing customers with an integrated communication and
productivity suite of products and services. There can be no assurance the
Company has either the ability or resources to accomplish this, the implication
of which is that the growth that the Company contemplates is subject to
substantial risk.

The Company's ability to implement its business plan is dependent on its ability
to attract and retain key management employees.

While the Company believes that it has recruited the nucleus of a solid
management team, owing to the Company's small size and thin capitalization,
there can be no assurance that the Company can retain these key management
employees or that it can hire the additional management and key employees that
will need to be hired to grow the Company. Failure of the Company to attract and
retain key management employees could mean that the Company will substantially
under-perform versus its expectations and that investors in this Offering could
lose some or all of their investment in the Company. The Company maintains key
man insurance on its Chief Executive Officer pursuant to its USDA loan
agreement. The Company is a party to employment contracts with three (3) of its
executive officers/inside directors.

Disruption of Company services due to accidental or intentional security
breaches may harm the Company's reputation, potentially causing a loss of sales
and an increase in its expenses.

A significant barrier to the growth of wireless data services or
transactions on the Internet or by other electronic means has been the need for
secure transmission of confidential information. Company systems could be
disrupted by unauthorized access, computer viruses and other accidental or
intentional actions. The Company may incur significant costs to protect against
the threat of security breaches or to alleviate problems caused by such
breaches. If a third party were able to misappropriate the Company's users'
personal or proprietary information or credit card information, it could be
subject to claims, litigation or other potential liabilities that could
materially adversely impact our revenue and may result in the loss of customers.

There is no established market for SiriCOMM's services; we may not be able to
sell enough of the Company's services to become profitable.

The markets for wireless data and transaction services are still
emerging. Continued growth in demand for, and acceptance of, these services
remains uncertain. Current barriers to market acceptance of these services
include cost, reliability, functionality and ease of use. The Company cannot be
certain that these barriers will be overcome. The Company's competitors may
develop alternative wireless data communications systems that gain broader
market acceptance than the Company's systems. If the market for the Company's
services does not grow, or grows more slowly than the Company currently
anticipate, it may not be able to attract customers for the Company's services
and its revenues would be adversely affected.

The Company's strategic alliances may not deliver the value it paid or will pay
for them.

Excessive expenses may result if the Company does not successfully
integrate its strategic alliances, or if the costs and management resources the
Company expends in connection with these integrations exceed the Company's
expectations. Although the Company expects that its strategic alliances (and any
acquisitions, investments it may pursue in the future) will have a continuing,
significant impact on the Company's business, financial condition and operating
result, no assurances can be given that any such events will have the intended
effects and results.

The Company may not achieve profitability if it is unable to maintain, improve
and develop the wireless data services the Company offers.

The Company believes that its future business prospects depend in part
on the Company's ability to maintain and improve its current services and to
develop new ones on a timely basis. The Company's services will have to achieve
market acceptance, maintain technological competitiveness and meet an expanding
range of customer requirements. As a result of the complexities inherent in the
Company's service offerings, major new wireless data services and service
enhancements require long development and testing periods. We may experience
difficulties that could delay or prevent the successful development,
introduction or marketing of new services and service enhancements.
Additionally, the Company's new services and service enhancements may not
achieve market acceptance. If the Company cannot effectively develop and improve
services, it may not be able to recover our fixed costs or otherwise become
profitable.

Any type of systems failure could reduce sales, increase costs or result in
claims of liability.

Any disruption from the Company's satellite feeds or backup landline
feeds could result in delays in our subscribers' ability to receive information.
The Company cannot be sure that its systems will operate appropriately if it
experiences a hardware or software failure or if there is an earthquake, fire or
other natural disaster, a power or telecommunications failure, intentional
disruptions of service by third parties, an act of God or an act of war. A
failure in the Company's systems could cause delays in transmitting data, and as
a result the Company may lose customers or face litigation that could involve
material costs and distract management from operating the Company's business.

The Company anticipates that its sales cycle will be long, and its stock price
could decline if sales are delayed or cancelled.

Quarterly fluctuations in the Company's future operating performance
will be exacerbated by the length of time between its first contact with a
business customer and the first revenue from sales of services to that customer
or end users. Because the Company's services represent a significant investment
for its business customers, the Company will spend a substantial amount of time
educating them regarding the use and benefits of the Company's services and
they, in turn, spend a substantial amount of time performing internal reviews
and obtaining capital expenditure approvals before deciding to purchase the
Company's services. As much as a year may elapse between the time the Company
approaches a business customer and the time it begins to deliver services to a
customer or end user. Any delay in sales of the Company's services could cause
its quarterly operating results to vary significantly from projected results,
which could cause the Company's stock price to decline. In addition, the Company
may spend a significant amount of time and money on a potential customer that
ultimately does not purchase the Company's services.

New laws and regulations that impact the Company's industry could increase its
costs or reduce the Company's opportunities to earn revenue.

The Company is not currently subject to direct regulation by the
Federal Communications Commission or any other governmental agency, other than
regulations applicable to publicly traded Delaware corporations of similar size
that are headquartered in Missouri. However, in the future, the Company may
become subject to regulation by the FCC or another regulatory agency. In
addition, the wireless carriers that supply the Company airtime and certain of
our hardware suppliers are subject to regulation by the FCC and regulations that
affect them could increase the Company's costs or reduce its ability to continue
selling and supporting its services.

ITEM 7 FINANCIAL STATEMENTS

Financial statements are included under Item 13(A) and may be found at
pages F-1 - F-18.

ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

On April 7, 2004, based upon the recommendation of and approval by our
board of directors, SiriCOMM dismissed Aidman Piser & Company, P.A. ("Aidman
Piser") as its independent auditor and engaged BKD, LLP to serve as its
independent auditor for the fiscal year ending September 30, 2004. On May 11,
2004, at the annual shareholders meeting, the Shareholders affirmed the
engagement of BKD, LLP as its independent auditors.

Aidman Piser's reports on the Company's consolidated financial
statements for the fiscal year ended September 30, 2003, contained a qualified
opinion as to the Company's ability to continue as a "going concern" in its
absence of revenues, or the ability to attract additional capital.

During the years ended September 30, 2003 and 2002 and through April 7,
2004, there were no disagreements with Aidman Piser on any matter of accounting
principle or practice, financial statement disclosure or auditing scope or
procedure, which, if not resolved to Aidman Piser's satisfaction, would have
caused them to make references to the subject matter in connection with their
reports of the Company's consolidated financial statements for such years.

In addition, the Company believes there were no reportable events as
defined in Item 304(a)(1)(iv)(B) of Regulation S-B.

The Company provided Aidman Piser with a copy of the foregoing
statements and requested that Aidman Piser provide it with a letter addressed to
the Securities and Exchange Commission stating whether it agrees with the
foregoing statements. A copy of Aidman Piser's letter, dated April 7, 2004, was
filed as Exhibit 16.1 to the Company's Current Report on Form 8-K filed with the
SEC on April 12, 2004.

ITEM 8A CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The Company's management, under the supervision of and with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of SiriCOMM'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 Annual Report on Form 10-KSB/A. Management had
previously concluded SiriCOMM's disclosure controls and procedures were
effective as of September 30, 2004. However, in connection with the restatement
described below, management determined that a material weakness existed in
SiriCOMM's internal control over financial reporting. Because of this material
weakness, management determined that SiriCOMM's disclosure controls and
procedures were not effective as of September 30, 2004 to ensure that all
material information required to be included in SiriCOMM's reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Act is accumulated and communicated to the issuer's management, including it's
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure. To address this material weakness, SiriCOMM's management performed
additional analysis to ensure that SiriCOMM's consolidated financial statements
were prepared in accordance with accounting principles generally accepted in the
United States of America. Accordingly, management believes that (i) the
consolidated financial statements, as restated, fairly present in all material
respects SiriCOMM's financial condition, results of operations and cash flows
for the periods presented, and (ii) this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report.

Consideration of the Restatement

The restatement corrects an error in SiriCOMM's consolidated balance
sheets as of September 30, 2004, December 31, 2004, March 31, 2005 and June 30,
2005, related to the treatment of outstanding Series A preferred stock
previously classified as permanent equity. The Series A preferred stock provides
that the holders may request SiriCOMM to redeem their preferred stock at any
time commencing three (3) years from the date of issuance. Following such a
request, SiriCOMM must, out of funds legally available therefore, repurchase
such shares. SiriCOMM has determined the Series A preferred shares are
redeemable shares and should therefore be classified as temporary equity.

Management evaluated the materiality of the correction on its
consolidated financial statements using the guidelines of Staff Accounting
Bulletin No. 99, "Materiality" and concluded that the effects of the corrections
were material to its 2004 annual consolidated financial statements as well as
its interim consolidated financial statements for the quarters ended December
31, 2004, March 31, 2005 and June 30, 2005. Accordingly, management concluded
that it would restate its previously issued 2004 annual consolidated financial
statements as well as its interim consolidated financial statements for the
quarters ended December 31, 2004, March 31, 2005 and June 30, 2005.

Internal Control over Financial Reporting

A material weakness is a control deficiency or combination of control
deficiencies that results in more than a remote likelihood that a material
misstatement of the annual or interim consolidated financial statements will not
be prevented or detected. As of September 30, 2004, SiriCOMM did not maintain
effective control over financial reporting to ensure the Series A preferred
stock was accurately presented or that the accounting treatment related to the
redeemable shares was appropriately reviewed to ensure compliance with
accounting principles generally accepted in the United States of America. The
transaction related to these redeemable shares was non-routine in nature.
Specifically, the Company did not have adequate controls over the classification
of the Series A preferred shares subject to redemption requests nor the proper
evaluation of the relevant accounting literature related to such shares. This
material weakness resulted in a restatement of SiriCOMM's financial statements.

Management's Response to the Material Weaknesses

In response to the material weaknesses described above, we have
undertaken to take the following initiatives with respect to our internal
controls and procedures that we believe are reasonably likely to improve and
materially affect our internal control over financial reporting. We anticipate
that remediation will be continuing throughout fiscal 2006, during which we
expect to continue pursuing appropriate corrective actions, including the
following:

o Preparing appropriate written documentation of our financial
control procedures;

o Adding additional qualified staff to our finance department;

o Scheduling training for accounting staff to heighten awareness
of generally accepted accounting principles applicable to
complex transactions;

o Strengthening our internal review procedures in conjunction
with our ongoing work to enhance our internal controls so as
to enable us to identify and adjust items proactively;

o Engaging an outside accounting firm to support our
Sarbanes-Oxley Section 404 compliance activities and to
provide technical expertise in the selection and application
of generally accepted accounting principles related to complex
transactions to identify areas that require control or process
improvements and to consult with us on the appropriate
accounting treatment applicable to complex transactions; and

o Implementing the recommendations of our outside accounting
consultants.

Our management and Audit Committee will monitor closely the
implementation of our remediation plan. The effectiveness of the steps we intend
to implement is subject to continued management review, as well as Audit
Committee oversight, and we may make additional changes to our internal control
over financial reporting.

We cannot assure you that we will not in the future identify further
material weaknesses in our internal control over financial reporting. We
currently are unable to determine when the above-mentioned material weaknesses
will be fully remediated. However, because remediation will not be completed
until we have added finance staff and strengthened pertinent controls, we
presently anticipate that we will report in our Annual Report on Form 10-KSB for
the year ended September 30, 2005 that material weaknesses continue to exist.

PART III

ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

A. Identification of Executive Officers and Directors

The following table sets forth certain information with respect to each
of the executive officers and directors of the Company. Each of the directors
named below will serve until the next annual meeting of the stockholders or
until their successors are elected or appointed and qualified.

Name Age Position(s) Held
---- --- ----------------

Henry P. (Hank) Hoffman 53 President, CEO and Chairman
David N. Mendez 44 Executive Vice President - Sales and
Marketing and a Director
Kory S. Dillman 33 Executive Vice President - Internet Business
Development and a Director
J. Richard Iler 52 Chief Financial Officer, Director
Terry W. Thompson 54 Director
Austin O'Toole 69 Director

B. Business Experience

Henry P. (Hank) Hoffman

Mr. Hoffman was appointed President and CEO of the Company on November
21, 2002. On that same date Mr. Hoffman was elected to the Board of Directors of
the Company and to serve as its Chairman. Mr. Hoffman co-founded SiriCOMM in
January 2000 and has been its President, CEO and Chairman since SiriCOMM's
inception. Mr. Hoffman has over twenty years experience in the transportation
industry. From September 1, 1996 to January 21, 2000 Mr. Hoffman was President
and Chief Operating Officer of Hook Up, Inc. of Joplin, MO, a small niche motor
carrier. From 1990 to 1995 Mr. Hoffman was President and COO of Tri-State Motor
Transit, the nation's largest transporter of munitions for the U.S. Government.

Prior to his term at Tri-State, he served in several
Operations/Management positions with both Schneider National, Inc. and Viking
Freight System. As an industry leader he has been a Vice President of the
American Trucking Associations, President and Chairman of the Board of the
Munitions Carriers Conference, member of the Board of Directors of the National
Automobile Transporters Association, and Forum Co-Chairman of the National
Defense Transportation Association. Prior to his trucking industry career, Mr.
Hoffman served as an officer in the United States Army Field Artillery for six
years where he completed two command assignments. Mr. Hoffman earned a Bachelor
of Science degree from the United States Military Academy, West Point, NY and a
Master of Business Administration from the University of Wisconsin, Oshkosh, WI.

David N. Mendez

Mr. Mendez was appointed Executive Vice President - Sales and Marketing
on November 21, 2002. On that same date Mr. Mendez was also elected a director
of the Company. Mr. Mendez co-founded SiriCOMM in April 2000 and has been its
Executive Vice President Sales and Marketing and a director since SiriCOMM's
inception. Mr. Mendez has over nine years experience in telecommunications sales
and marketing. Mr. Mendez's telecommunications expertise focuses on domestic and
international data communication networks including Frame Relay and ATM
infrastructures and Internet and intranet networks. From October 1998 to
February 2000 he was National Sales Manager for DRIVERNet where he managed such
national accounts as Ford, Kenworth, Peterbilt, Paccar Corporation, and Cue
Paging. From 1995 to 1998 Mr. Mendez worked as a Major Account Manager for
Sprint. Mr. Mendez graduated with a Bachelor of Science degree from Southwest
Missouri State University, Springfield, MO.

Kory S. Dillman

Mr. Dillman was appointed Executive Vice President - Internet Business
Development on November 21, 2002. On that same date Mr. Dillman was also elected
a director of the Company. Mr. Dillman co-founded SiriCOMM in April 2000 and has
been its Executive Vice President - Internet Business Development and a director
since SiriCOMM's inception. From 1996 to 1999 Mr. Dillman was Creative Director
for DRIVERNet. In that position he produced intranet and Internet applications
for DRIVERNet and its customers. He developed specific web-based products for
Volvo Trucks North America, Kenworth, Peterbilt, Ambest, Caterpillar Engines,
and TravelCenters of America. Prior to joining DRIVERNet Mr. Dillman was Art
Director for Wendfall Productions. In this position he managed development for
Sony Music and Ardent Records. Mr. Dillman earned a Bachelor of Fine Arts degree
from the University of Tulsa, Tulsa, OK.

J. Richard Iler

Mr. Iler was appointed Chief Financial Officer and elected to the Board
of Directors in April 2003. From 2001 through 2003, Mr. Iler was managing
director of a private equity fund responsible for financing activities,
management consulting and investor relations of the funds portfolio companies.
From 1998 through 2001, Mr. Iler was Chief Financial Officer of United American
e-Health Technologies, a publicly traded company. Mr. Iler assisted this company
in raising capital and preparation of regulatory filings. Mr. Iler graduated
form Grand Valley State University in Allendale, Michigan with a B.S. and
attended South Texas College of Law in Houston, Texas.

Terry W. Thompson

Mr. Thompson was elected to the Board of Directors in August 2003. In
January 2003, Mr. Thompson retired as President of Jack Henry and Associates, a
provider of integrated computer systems and processor of ATM and debit card
transactions for banks and credit unions. Mr. Thompson joined Jack Henry in 1990
as Chief Financial Officer, was appointed President in 2001 guiding the Company
from $15 million in revenues to more than $396 million and from 98 employees to
2300 employees. Mr. Thompson was named Chairman of the Company's Audit Committee
and serves as its financial expert.

Austin M. O'Toole

Mr. O'Toole was elected to the Board of Directors in June 2004. Mr.
O'Toole practices corporate law and alternative dispute resolution in Houston
and Galveston, Texas. For over twenty years Mr. O'Toole served as senior vice
president, corporate secretary and senior counsel to The Coastal Corporation. He
represented Coastal and its subsidiaries in connection with finance, mergers and
acquisitions, SEC and stock exchange matters, including disclosure. Mr. O'Toole
managed Coastal's corporate secretary's office and its shareholder relations
department. Mr. O' Toole is a member of the Audit Committee.

Board of Directors; Committees

The Board of Directors has the responsibility for establishing
corporate policies and for the overall performance of the Company. The Board of
Directors held 5 meetings during fiscal 2004. During fiscal 2004 all other
actions requiring the approval of the Board of Directors was taken by unanimous
written consent.

The Board of Directors established an audit committee on June 14, 2004.

Audit Committee

On June 14, 2004, the Board of Directors established an audit committee
and elected Austin O'Toole and Terry W. Thompson as members of the Audit
Committee. The Board of Directors has determined that Mr. Thompson and Mr.
O'Toole are both independent and Mr. Thompson was named an audit committee
financial expert, as determined by SEC guidelines. The members of the Audit
Committee met 2 times between June 14, 2004 and September 30, 2004. The Board of
Directors adopted a charter for the Audit Committee on June 14, 2004, which is
attached as an exhibit to this report. The functions of the Audit Committee
include the following:

o Recommending annually to the Board of Directors the
appointment of the independent public accountants of the
Company;

o Reviewing the scope of the prospective annual audit and
reviewing the results thereof with the independent public
accountants;

o Determining the independence of the independent public
accountants;

o Making inquires with respect to the appropriateness of
accounting principles followed by the Company; and

o Receiving and reviewing reports from Company management
relating to the Company's financial reporting process, the
adequacy of the Company's system of internal controls, and
legal and regulatory matters that may have a material impact
on the Company's financial statements and compliance policies.

Audit Committee Report

The Company's Audit Committee for fiscal year 2004 has reviewed and
discussed the audited financial statements for that year with management. The
Audit Committee discussed with management the matters set forth in SAS 61
(Codification of Statements on Auditing Standards, AU Section 380), which
include, among other things:

o Methods used to account for significant unusual transactions;

o The effect of significant accounting policies in controversial
or emerging areas for which there is a lack of authoritative
guidance or consensus;

o The process used by management in formulating particularly
sensitive accounting estimates and the basis for the auditor's
conclusions regarding the reasonableness of those estimates;
and

o Management's application of accounting principles, the basis
for management's accounting estimates, and the disclosures in
the financial statements.

The Audit Committee has received the written disclosures and the letter
from BKD, LLP, the Company's independent accountants, required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees
and has discussed with BKD, LLP the issue of its independence from the Company.
Based on its review of the audited financial statements and the various
discussions noted above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004.

Terry W. Thompson, Chairman
Austin O'Toole

Compensation Committee

The Company does not have a compensation committee. The Board of
Directors as a whole performs the functions customarily attributable to a
compensation committee.

Nominating Committee

The Company does not have a nominating committee. The Board of
Directors as a whole performs the functions customarily attributable to a
nominating committee.

On August 30, 2004, the Board authorized the following compensation
package for its independent board members.

o Annual Cash Retainer - $3,500 per fiscal year

o Meeting Fee - $1,000 plus reasonable travel-related expenses
for on-site board meetings and/or on-site committee meetings.

o Stock Options - New independent board members receive an
initial grant of ten thousand (10,000) stock options. The
options vest over three years, 4,000 year one, 3,000 year two
and 3,000 year three. In addition, on their anniversary of
appointment, all board members will receive an annual grant of
3,000 shares. Each option granted hereunder will be priced at
market.

In fiscal year 2004, the directors listed below received stock options
as part of the director's compensation:

No. of Exercise Date of Expiration
Name Options Granted Price Grant Date
- ---- --------------- -------- ------- ----------
Terry W. Thompson 10,000 $4.05 9/2/04 9/1/14

Austin O'Toole 10,000 $4.05 9/2/04 9/1/14

Involvement in Certain Legal Proceedings

On December 17, 2004, Henry Hoffman, Kory Dilman, David Mendez, Tom
Noland, Richard Iler and Terry Thompson were named defendants in a lawsuit
entitled Greg Sanders v. Henry Hoffman et al. Messrs. Hoffman, Dilman, Mendez
and Iler are officers and directors of the Company, Mr. Thompson is a director
of the Company and Mr. Noland is a former officer and director of the Company.
The Company was not named as a defendant in this matter. The action was brought
in the Circuit Court of Jackson County, Missouri at Kansas City (04CV236387).
The action alleges fraud, misrepresentation and breach of fiduciary duty
relating to a settlement agreement entered into between the Company and Mr.
Sanders. The complaint seeks damages in excess of $9,679,903. The Company will
pay all expenses relating to the defense of this matter. In management's opinion
this case is without merit and the defendants intend on defending this matter
vigorously.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors and certain officers of the Company, as well as persons who
own more than 10% of a registered class of the Company's equity securities
("Reporting Persons"), to file reports with the Securities and Exchange
Commission. The Company believes that during fiscal 2004, all Reporting Persons
timely complied with all filing requirements applicable to them except that Mr.
O'Toole's initial statement of ownership on Form 3, which disclosed that he had
no beneficial interest in any equity securities of the Company was filed after
the due date.

Code of Ethics

We have adopted a Code of Ethics and Business Conduct for Officers and
Directors and a Code of Ethics for Financial Executives that applies to all of
our executive officers, directors and financial executives.

ITEM 10 EXECUTIVE COMPENSATION

Summary Compensation Table

The Summary Compensation Table shows certain compensation information
for services rendered in all capacities for the fiscal years ended September 30,
2002, 2003 and 2004. Other than as set forth herein, no executive officer's
salary and bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation Compensation
----------------------------- -----------------------
Fiscal Year
Ended
Name and Principal Position September 30 Salary ($) Bonus ($) Options/SARS (#)
- --------------------------- ------------ ---------- --------- ----------------

Henry P. Hoffman (a) 2004 $ 175,000 - -
President, CEO and Chairman 2003 150,000 - -
2002 118,269

David N. Mendez (b) 2004 125,000 - -
EVP- Sales and Marketing and Director 2003 125,000 - -
2002 93,750

Kory S. Dillman (b) 2004 125,000 - -
EVP - Internet Business Development 2003 125,000 - -
and Director 2002 98,558

J. Richard Iler 2004 75,831
Chief Financial Officer and Director 2003
2002
- ----------------

(a) includes $93,750 in accrued and unpaid compensation.
(b) includes $78,125 each in accrued and unpaid salary

Employment Contracts

We have employment agreements with three of our executive officers,
Henry P. Hoffman, David N. Mendez and Kory S. Dillman.

Mr. Hoffman's employment agreement, dated February 19, 2002 has an
initial term of three (3) years and a base annual salary of $150,000 and was
increased to $175,000 in 2004. Thereafter the agreement automatically renews for
additional one-year periods. Bonuses, if any, are to be paid at the sole
discretion of our Board of Directors.

Mr. Mendez' employment agreement, dated February 19, 2002 has an
initial term of three (3) years and a base annual salary of $125,000. Thereafter
the agreement automatically renews for additional one-year periods. Bonuses, if
any, are to be paid at the sole discretion of our Board of Directors. .

Mr. Dillman's employment agreement, dated February 19, 2002 has an
initial term of three (3) years and a base annual salary of $115,000, which has
been increased to $125,000. Thereafter the agreement automatically renews for
additional one-year periods. Bonuses, if any, are to be paid at the sole
discretion of our Board of Directors.

Stock Options

OPTIONS/SAR GRANTS TABLE

Option/SAR Grants in the Last Fiscal Year
Individual Grants

% of Total
Options/SARs
Granted to Exercise or
Fiscal Options/SARs Employees in Base Price Expiration
Name and Principal Position Year Granted (#) Fiscal Year ($/Sh) Date
- --------------------------- ---- ----------- ----------- ------ ----

Henry P. Hoffman 2004 -0- 0.0% -0- --
President, CEO and Chairman of the Board

David N. Mendez 2004 -0- 0.0% -0- --
EVP- Sales and Marketing and Director

Kory S. Dillman 2004 -0- 0.0% -0- --
EVP - Internet Business Development
and Director

J. Richard Iler 2004 145,000 0.0% $1.00 11/17/13
Chief Financial Officer and Director

OPTIONS/SAR EXERCISES AND YEAR-END VALUE TABLE

Aggregated Options/SAR Exercises in Last Fiscal Year and FY-End Options/SAR Value

Value of
Number of Unexercised
Unexercised In-the-money
Options/SARs Options/SARs
Shares Value at FY-End (#) at FY-End ($)
Fiscal Acquired on Realized Exercisable / Exercisable /
Name and Principal Position Year Exercise (#) ($) Unexercisable Unexercisable
- --------------------------- ---- ------------ -------- ------------- -------------

Henry P. Hoffman 2004 -0- -0- (E)-0- / (U)-0- (E)$0 /(U)$0
President, CEO and Chairman of the Board

David N. Mendez 2004 -0- -0- (E)-0- / (U)-0- (E)$0 /(U)$0
EVP- Sales and Marketing and Director

Kory S. Dillman 2004 -0- -0- (E)-0- / (U)-0- (E)$0 /(U)$0
EVP - Internet Business Development
and Director

J. Richard Iler 2004 4,200 -0- (E)140,800-0-/ (U)-0- (E)$0 /(U)$0
Chief Financial Officer and Director

2002 Incentive Stock Option Plan

The Company in 2002, adopted a 2002 Equity Incentive Plan (the "Plan").
The Plan designates a Stock Option Committee appointed by the Board of Directors
and authorizes the Stock Option committee to grant or aware to eligible
participants of the Company and its subsidiaries and affiliates, until May 15,
2012, stock options, stock appreciation rights, restricted stock performance
stock awards and Bonus Stock awards for up to 3,000,000 shares of the New Common
Stock of the Company. The initial members of the Stock Option Committee have not
yet been appointed. During fiscal 2004, the Company issued 304,500 options and
or bonus shares under the plan.

The following is a general description of certain features of the Plan:

1. Eligibility. Officers, directors and other key employees and
consultants of the Company, its subsidiaries and its affiliates who are
responsible for the management, growth and profitability of the business of the
Company, its subsidiaries and its affiliates are eligible to be granted stock
options, stock appreciation rights, and restricted or deferred stock awards
under the Plan. Directors are eligible to receive Stock Options.

2. Administration. The Incentive Plan is administered by the Stock
Option Committee of the Company. The Board, in the absence of the establishment
of this Committee, acts in the capacity of this Committee. The Stock Option

Committee has full power to select, from among the persons eligible for awards,
the individuals to whom awards will be granted, to make any combination of
awards to any participants and to determine the specific terms of each grant,
subject to the provisions of the Incentive Plan.

3. Stock Options. The Plan permits the granting of non-transferable
stock options that are intended to qualify as incentive stock options ("ISO's")
under section 422 of the Internal Revenue Code of 1986 and stock options that do
not so qualify ("Non-Qualified Stock Options"). The option exercise price for
each share covered by an option shall be determined by the Stock Option
Committee but shall not be less than 100% of the fair market value of a share on
the date of grant. The term of each option will be fixed by the Stock Option
Committee, but may not exceed 10 years from the date of the grant in the case of
an ISO or 10 years and two days from the date of the grant in the case of a
Non-Qualified Stock Option. In the case of 10% stockholders, no ISO shall be
exercisable after the expiration of five (5) years from the date the ISO is
granted.

4. Stock Appreciation Rights. Non-transferable stock appreciation
rights ("SAR's") may be granted in conjunction with options, entitling the
holder upon exercise to receive an amount in any combination of cash or
unrestricted common stock of the Company (as determined by the Stock Option
Committee), not greater in value than the increase since the date of grant in
the value of the shares covered by such right. Each SAR will terminate upon the
termination of the related option.

5. Restricted Stock. Restricted shares of the common stock may be
awarded by the Stock Option Committee subject to such conditions and
restrictions as they may determine. The Stock Option Committee shall also
determine whether a recipient of restricted shares will pay a purchase price per
share or will receive such restricted shares without, any payment in cash or
property. No Restricted Stock Award may provide for restrictions beyond ten (10)
years from the date of grant.

6. Performance Stock. Performance shares of Common Stock may be awarded
without any payment for such shares by the Stock Option Committee if specified
performance goals established by the Committee are satisfied. The designation of
an employee eligible for a specific Performance Stock Award shall be made by the
Committee in writing prior to the beginning of the period for which the
performance is based. The Committee shall establish the maximum number of shares
to stock to be issued to a designated Employee if the performance goal or goals
are met. The committee reserves the right to make downward adjustments in the
maximum amount of an Award if, in it discretion unforeseen events make such
adjustment appropriate. The Committee must certify in writing that a performance
goal has been attained prior to issuance of any certificate for a Performance
Stock Award to any Employee.

7. Bonus Stock. The committee may award shares of Common Stock to
Eligible Persons, without any payment for such shares and without any specified
performance goals. The Employees eligible for bonus Stock Awards are senior
officers and consultants of the Company and such other employees designated by
the Committee.

8. Transfer Restrictions. Grants under the Plan are not transferable
except, in the event of death, by will or by the laws of descent and
distribution.

9. Termination of Benefits. In certain circumstances such as death,
disability, and termination without cause, beneficiaries in the Plan may
exercise Options, SAR's and receive the benefits of restricted stock grants
following their termination or their employment or tenure as a Director as the
case may be.

10. Change of Control. The Plan provides that (a) in the event of a
"Change of Control" (as defined in the Plan), unless otherwise determined by the
Stock Option Committee prior to such Change of Control, or (b) to the extent
expressly provided by the Stock Option Committee at or after the time of grant,
in the event of a "Potential Change of Control" (as defined in the Plan), (i)
all stock options and related SAR's (to the extent outstanding for at least six
months) will become immediately exercisable: (ii) the restrictions and deferral
limitations applicable to outstanding restricted stock awards and deferred stock
awards will lapse and the shares in question will be fully vested: and (iii) the
value of such options and awards, to the extent determined by the Stock Option
Committee, will be cashed out on the basis of the highest price paid (or
offered) during the preceding 60-day period, as determined by the Stock Option
Committee. The Change of Control and Potential Change of Control provisions may
serve as a disincentive or impediment to a prospective acquirer of the Company
and, therefore, may adversely affect the market price of the common stock of the
Company.

11. Amendment of the Plan. The Plan may be amended from time to time by
majority vote of the Board of Directors provided as such amendment may affect
outstanding options without the consent of an option holder nor may the plan be
amended to increase the number of shares of common stock subject to the Plan
without stockholder approval.

In December 1998, the Company adopted the Fountain Pharmaceuticals,
Inc. 1998 Stock Option Plan (the 1998 Plan). Nonqualified and incentive stock
options may be granted under the 1998 Plan. The term of options granted under
the 1998 Plan are fixed by the plan administrator provided, however, that the
maximum option term may not exceed ten (10) years from the grant date and the
exercise price per share may not be less than the fair market value per share of
the Common Stock on the grant date. Under the 1998 Plan, all full-time employees
of the Company or its subsidiaries, including those who are officers and
directors, non-employee directors and consultants are eligible to receive
options pursuant to the 1998 Plan, if selected. Directors and consultants are
also eligible. The 1998 Plan provided for the authority to issue options
covering up to 750,000 shares of the Company's Common Stock; provided, however,
that option to purchase no more than 500,000 shares shall be granted to any one
participant. As a result of the 60 for 1 reverse stock split effectuated on
November 21, 2002, the 1998 Plan covers only 12,500 shares of the Company's
common stock and the Board abandoned this plan.

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of December 3, 2004, information
with respect to the securities holdings of all persons which the Company,
pursuant to filings with the Securities and Exchange Commission, has reason to
believe may be deemed the beneficial owners of more than 5% of the Company's

outstanding Common Stock. The following table indicates the beneficial ownership
of such individuals numerically calculated based upon the total number of shares
of Common Stock outstanding. Also set forth in the table is the beneficial
ownership of all shares of the Company's outstanding stock, as of such date, of
all officers and directors, individually and as a group.

Amount of Percent of
Name and Address Beneficial Ownership (1) Beneficial Ownership (2)
- ---------------- ------------------------ ------------------------

Henry P. Hoffman 5,712,303 34.90%
2900 Davis Boulevard, Suite 130
Joplin, MO 64804

David N. Mendez 1,088,331 6.65%
2900 Davis Boulevard, Suite 130
Joplin, MO 64804

Kory S. Dillman 1,023,535 6.25%
2900 Davis Boulevard, Suite 130
Joplin, MO 64804

J. Richard Iler (3) 140,000 0.08%
12 Jennifer Drive
Westford, MA 01886

Terry W. Thompson (4) 370,884 2.24%
406 N. Belaire
Monett, MO 65708

Austin O'Toole 0 0.00%
2200 Willowick, 10-H
Houston, TX 77027

William P. Moore, III, as Trustee of the (5) 1,700,000 9.88%
William P. Moore III Revocable Trust dated
October 9, 2001
10801 Mastin, Suite 920
Overland Park, KS

Quest Capital Alliance LLC 1,154,000 7.00%
3140 E. Division
Springfield, MO 65802

Robert J. Smith (6) 1,553,931 9.40%
3865 E. Turtle Hatch
Springfield, MO 65809

All Directors and Officers as a Group
(6 Persons)(6) 8,335,053 50.00%

- ------------------
(1) Except as otherwise indicated, includes total number of shares
outstanding and the number of shares which each person has the right to
acquire within 60 days through the exercise of warrants or the
conversion of Preferred Stock pursuant to Item 403 of Regulation S-B
and Rule 13d-3(d)(1), promulgated under the Securities Exchange Act of
1934.

(2) Based upon 16,367,450 shares issued and outstanding.

(3) Includes 120,000 shares which may be obtained by Mr. Iler upon the
exercise of a like number of options exercisable at $1.00 per share and
20,000 shares which may be obtained by Mr. Iler upon the exercise of a
like number of options exercisable at $1.49 per share.

(4) Includes 150,600 shares which may be obtained by Mr. Thompson upon the
exercise of a like number of warrants exercisable at $2.00 per share.

(5) Includes 850,000 shares which may be obtained upon the exercise of a
like number of warrants exercisable at $2.00 per share.

(6) Includes 436,000 shares owned by Gunner Investments Corp., a company
controlled by Mr. Smith. Includes 154,600 shares which may be obtained
upon the exercise of a like number of warrants exercisable at $2.00 per
share. Includes 78,000 shares which may be obtained upon the exercise
of a like number of warrants exercisable at $.50 per share.

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

From December 2002 through September 2003, the Company borrowed an
aggregate of $375,000 from unaffiliated third parties and $30,000 from the
Company's CEO. The loan to its CEO was repaid in 2004. In connection with these
loans, the Company issued the lenders an aggregate 137,782 shares of its common
stock. In connection with these loans, the Company's CEO issued an aggregate of
375,000 options to purchase shares of his own stock at $1.00 per share. On
August 8, 2003, Mr. Terry Thompson, who had lent the Company an aggregate of
$50,000 and received 19,684 of these shares and 50,000 of the aforementioned
options, was elected a director of the Company. The shares were issued under the
exemption from registration provided in Section 4(2) of the Securities Act of
1933. The lenders represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution of the securities and appropriate legends were affixed to the
certificates. The Company utilized the proceeds of these loans for general
working capital purposes.

On February 26, 2004 the Company borrowed $1 million from Southwest
Missouri Bank. The loan is federally guaranteed by the United States Department
of Agriculture as part of the Rural Development Program. This loan is also
guaranteed by Mr. Henry P. Hoffman, the Company's Chairman and CEO, as well as
by his wife. The Company has not compensated Mr. Hoffman for providing this
guaranty.

ITEM 13 EXHIBITS, LIST AND REPORTS ON FORM 8-K

A. Financial Statements filed as part of this Report:

Page Reference

Report of Independent Registered Public Accountants
(Current) F-1

Report of Independent Public Accountants F-2

Balance Sheet for the year ended September 30, 2004 F-3

Statements of Operations for the years ended F-4
September 30, 2004 and 2003 and since inception
(April 24, 2000)

Statements of Stockholders' Equity for the years F-5
ended September 30, 2004 and 2003 and since inception
(April 24, 2000)

Statements of Cash Flows for the years ended F-6
September 30, 2004 and 2003 and since inception
(April 24, 2000)

Notes to Financial Statements for the years F-8 thru F-18
ended September 30, 2004 and 2003

B. Financial Statement Schedules:

None.

C. The following Exhibits are filed as part of this Report:

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

3.1 Certificate of Incorporation of the Registrant, filed
March 23, 1989 (Incorporated by reference to Exhibit
3.1 of the Registration Statement on Form S-1 filed
on January 4, 1990, Registration Number 33-32824 (the
Form S-1))

3.2 Certificate of Amendment of Certificate of
Incorporation, filed April 10, 1989 (Incorporated by
reference to Exhibit 3.2 of the Form S-1)

3.3 Restated Certificate of Incorporation of the
Registrant, filed November 13, 1989 (Incorporated by
reference to Exhibit 3.3 of the Form S-1)

3.4 By-Laws of the Registrant (Incorporated by reference
to Exhibit 3.4 of the Form S-1)

3.5 Certificate of Designation, Preference and Rights of
Series A Preferred Stock (Incorporated by reference
to Exhibit 3.5 of the Company's Current Report on
Form 8-K filed on July 31, 1997 (July 1997 Form 8-K))

3.6 Amended and Restated Certificate of Incorporation of
Fountain Pharmaceuticals, Inc. dated November 21,
2002, as filed in the office of the Secretary of
State, State of Delaware on November 21, 2002.
(Incorporated by reference to Exhibit 99.1 to the
November 21, 2002 Form 8-K)

4.1 Copy of Specimen Stock Certificate (Incorporated by
reference to Exhibit 4.1 of the Form S-1)

4.2 Copy of Specimen Stock Certificate of Series A
Preferred Stock (Incorporated by reference to Exhibit
4.3 to the July 1997 Form 8-K)

4.3 Form of Warrant issued to the principals of Layne
Morgan (Incorporated by reference to Exhibit 4.1 to
the Registrant's Form 10-QSB for the quarter ended
March 31, 2004.)

4.4 Form of Warrant issued to investors on May 4, 2004
(Incorporated by reference to Exhibit 4.2 to the
Registrant's Form 10-QSB for the quarter ended March
31, 2004.)

10.1 Capital Stock Purchase Agreement between Fountain
Holdings LLC, Joseph S. Schuchert, Jr. and Park
Street Acquisition Corporation dated December 31,
2001. (Incorporated by reference to Exhibit 1.1 to
the Registrant's Form 8-K Report dated December 31,
2001)

10.2 Capital Stock Purchase Agreement between Fountain
Pharmaceuticals, Inc. and Park Street Acquisition
Corp. dated December 31, 2001. (Incorporated by
reference to Exhibit 1.2 to the Registrant's Form 8-K
Report dated December 31, 2001)

10.3 Securities Exchange Agreement dated as of April 5,
2002 between the Company and the holders of the
common stock of SiriCOMM, Inc. (Missouri)
(Incorporated by reference to Exhibit 2.1 to the
November 21, 2002 Form 8-K)

10.4 Amendment to Securities Exchange Agreement dated as
of June 5, 2002 between the Company and the
shareholders of SiriCOMM, Inc. (Missouri)
(Incorporated by reference to Exhibit 2.2 to the
November 21, 2002 Form 8-K)

10.5 Amendment No. 2 to Securities Exchange Agreement
dated as of November 21, 2002 between the Company and
the shareholders of SiriCOMM, Inc. (Missouri)
(Incorporated by reference to Exhibit 2.3 to the
November 21, 2002 Form 8-K)

10.6 Consulting Agreement dated July 2, 2003 between the
Company and CLX & Associates (Incorporated by
reference to Exhibit 10.1 to the Registrant's Form
10-QSB for the quarter ended June 30, 2003)

10.7 Consulting Agreement dated June 2, 2003 between the
Company and The Research Works, Inc. (Incorporated by
reference to Exhibit 10.2 to the Registrant's Form
10-QSB for the quarter ended June 30, 2003)

10.8 Consulting Agreement and addendums dated May 30, 2003
between the Company and Staunton McLane LLC.
(Incorporated by reference to Exhibit 10.3 to the
Registrant's Form 10-QSB for the quarter ended June
30, 2003)

10.9 Employment Agreement dated February 19, 2002 between
the Company and Henry P. Hoffman (Incorporated by
reference to Exhibit 10.10 to the Registrant's Form
10-KSB for the fiscal year ended September 30, 2003)

10.10 Employment Agreement dated February 19, 2002 between
the Company and Kory S. Dillman (Incorporated by
reference to Exhibit 10.11 to the Registrant's Form
10-KSB for the fiscal year ended September 30, 2003)

10.11 Employment Agreement dated February 19, 2002 between
the Company and David N. Mendez (Incorporated by
reference to Exhibit 10.12 to the Registrant's Form
10-KSB for the fiscal year ended September 30, 2003)

10.12 Letter to Staunton McLane from the Company dated
November 28, 2003 terminating the service agreement.
(Incorporated by reference to Exhibit 10.13 to the
Registrant's Form 10-KSB for the fiscal year ended
September 30, 2003)

10.13 Consulting Agreement dated April 22, 2004 between the
Company and Layne Morgan Technology Group
(Incorporated by reference to Exhibit 10.1 to the
Registrant's Form 10-QSB for the quarter ended March
31, 2004)

10.14 Consulting Agreement dated April 22, 2004 between the
Company and Gunner Investments, Inc. (Incorporated by
reference to Exhibit 10.2 to the Registrant's Form
10-QSB for the quarter ended March 31, 2004)

10.15 Memorandum of Understanding between the Company and
Christenson Transportation, Inc. (Incorporated by
reference to Exhibit 10.3 to the Registrant's Form
10-QSB for the quarter ended March 31, 2004)

10.16 Memorandum of Understanding between the Company and
Mark Sullivan (Incorporated by reference to Exhibit
10.4 to the Registrant's Form 10-QSB for the quarter
ended March 31, 2004)

10.17 Form of Subscription Agreement (Incorporated by
reference to Exhibit 10.1 to the Registrant's Form
8-K dated December 31, 2004)

10.18 Form of Common Stock Purchase Warrant (Incorporated
by referenced to Exhibit 10.2 to the Registrant's
Form 8-K dated December 31, 2004)

10.19 Form of Common Stock Purchase Warrant (Incorporated
by reference to Exhibit 10.1 to the Registrant's Form
8-K dated January 5, 2005)

10.20 Form of Registration Rights Agreement (Incorporated
by reference to Exhibit 10.1 to the Registrant's Form
8-K dated January 5, 2005)

14.1 Code of Business Conduct (Incorporated by reference
to Exhibit 14.1 to the Registrant's Form 10-KSB for
the fiscal year ended September 30, 2003)

14.2 Code of Ethics for Financial Executives (Incorporated
by reference to Exhibit 14.2 to the Registrant's Form
10-KSB for the fiscal year ended September 30, 2003)

14.3 Audit Committee Charter

31.1 Certification of Chief Executive Officer of Periodic
Report pursuant to Rule 13a-14a and Rule 15d-14(a).

31.2 Certification of Principal Financial Officer of
Periodic Report pursuant to Rule 13a-14a and Rule
15d-14(a).

32.1 Certification pursuant to 18 U.S.C. Section 1350.

32.2 Certification pursuant to 18 U.S.C. Section 1350.

D. Reports on Form 8-K for the fourth quarter of fiscal 2004

(1) A Current Report on Form 8-K was filed on September
17, 2004 to report the expansion of a services
agreement with DriverTech, Incorporated.

(2) A Current Report on Form 8-K was filed on September
27, 2004 to report the alliance with Getloaded.com.

ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees. We incurred aggregate fees and expenses of approximately $52,900
from BKD, LLP for the 2004 fiscal year. Such fees were primarily for work
completed for our annual audit and 10QSB filings. We incurred aggregate fees and
expenses of approximately $67,810 from Aidman Piser & Company, P.A. for the 2004
fiscal year. Such fees were primarily for work completed for our annual audit.

Tax Fees. We incurred $9,500 in fees from BKD, LLP for the 2004 fiscal year for
professional services rendered for tax compliance, tax advise and tax planning.

All Other Fees. We did not incur any other fees from BKD, LLP during fiscal 2004
or fiscal 2003, respectively. We paid Aidman Piser & Company, P.A. $5,000 in
fiscal 2004 in conjunction with our application to the American Stock Exchange.
The Audit Committee considered whether, and determined that, the auditor's
provision of non-audit services was compatible with maintaining the auditor's
independence. All of the services described above for fiscal year 2004 since
June 14, 2004 were approved by the Audit Committee. Previous to creation of the
Audit Committee in June 2004, and 2003 such services were approved by the Board
of Directors pursuant to their respective policies and procedures. We intend to
continue using BKD, LLP solely for audit and audit-related services, tax
consultation and tax compliance services, and, as needed, for due diligence in
acquisitions.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements of filing on Form 10-KSB/A, and has
duly caused this Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized on the 1st day of November, 2005.

SiriCOMM, Inc.

By: /s/ Henry P. Hoffman
--------------------------------------
Henry P. Hoffman
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Form 10-KSB has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Principal Executive Title Date
------------------- ----- ----

/s/ Henry P. Hoffman President, Chief Executive November 1, 2005
----------------------- Officer and Director
Henry P. Hoffman

/s/ J. Richard Iler Chief Financial Officer and November 1, 2005
------------------------ Director
J. Richard Iler

BKD LLP Southern Missouri Practice Hammons Tower
Springfield 901 E. St. Louis Street, Suite 1000
Joplin P.O. Box 1190
Branson Springfield, MO 65601-1190
Pittsburg, Kansas 417 865-8701 Fax 417 865-0682
--------------------------------------------------------------------------------
bkd.com

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders
SiriCOMM, Inc.
Joplin, Missouri

We have audited the accompanying consolidated balance sheet of
SiriCOMM, Inc. as of September 30, 2004, and the related consolidated
statements of operations, stockholders' equity and cash flows for the
year ended September 30, 2004, and for the period from inception (April
24, 2000) through September 30, 2004. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
SiriCOMM, Inc. as of September 30, 2004, and the results of its
operations and its cash flows for the year ended September 30, 2004,
and for the period from inception (April 24, 2000) through September
30, 2004, in conformity with accounting principles generally accepted
in the United States of America, generally accepted in the United
States of America.

As discussed in Note 13, in 2005 the Company changed its method of
accounting for redeemable perferred stock by retoactively restating its
September 30, 2004 financial statements.

/s/ BKD, LLP

BKD, LLP
Joplin, Missouri

November 8, 2004, except for Note 12,
as to which the date is January 5, 2005,
and Note 13, as to which the date is
September 27, 2005

F-1

AIDMAN, PISER & COMPANY

Certified Public Accountants
& Business Advisors

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
SiriCOMM, Inc. and Subsidiary
Joplin, Missouri

We have audited the accompanying consolidated balance sheet of SiriCOMM, Inc.
and Subsidiary (the "Company"), a development stage enterprise, as of September
30, 2003, and the related consolidated statements of operations, stockholders'
deficit and cash flows for the years ended September 30, 2003 and 2002 and for
the period from inception (April 24, 2000) through September 30, 2003. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
September 30, 2003, and the results of its operations and its cash flows for the
years ended September 30, 2003 and 2002 and for the period from inception (April
24, 2000) through September 30, 2003, in conformity with accounting principles
generally accepted in the United States of America.

As discussed in Note 2, the Company is in the development stage, and has not yet
earned revenues from operations, has working capital and equity deficiencies of
$389,758 and $504,994, respectively, at September 30, 2003 and is in default
with respect to a substantial portion of its loan agreements. These conditions
raise substantial doubt regarding the Company's ability to continue as a going
concern. Management's plans related to these conditions are also discussed in
Note 2. The financial statements do not include any adjustments that may result
from the outcome of this uncertainty.

/s/ Aidman, Piser & Company, P.A.

Tampa, Florida
January 11, 2004

401 East Jackson St., Suite 3400
Tampa, FL 33602 813-222-8555 Fax: 813-222-8560

F-2

SiriCOMM, Inc.
(A Development Stage Enterprise)
Consolidated Balance Sheet
September 30, 2004

ASSETS

Current Assets
Cash and cash equivalents $ 1,019,616
Prepaid expenses and other 16,563
------------------
Total current assets 1,036,179
------------------

Property and Equipment, At Cost
Equipment 111,818
Network equipment in progress of installation 646,000
------------------
757,818
Less accumulated depreciation 62,032
------------------
695,786
------------------
Software, net of amortization 19,934
------------------

Total assets $ 1,751,899
==================

Liabilities and Stockholders' Equity

Current Liabilities
Note payable to bank $ 122,000
Current maturities of long-term debt 25,000
Accounts payable 50,816
Accrued salaries 269,125
Other accrued expenses 45,928
------------------
Total current liabilities 512,869
------------------

Total liabilities 512,869
------------------

Preferred stock redeemable and convertible, - Series A par value $.001;
500,000 shares authorized; 213,417 shares issued and outstanding;
dividend rate of $0.025 per share per quarter commencing March 2004;
liquidation preference of $1 per outstanding share cash payment 250,765

Stockholders' Equity
Common stock - par value $.001; 50,000,000 shares authorized;
16,255,650 shares issued and outstanding 16,252
Additional paid-in capital 8,379,044
Deferred compensation (722,016)
Deficit accumulated during the development stage (6,685,015)
------------------
Total stockholders' equity 988,265
------------------

Total liabilities and stockholders' equity $ 1,751,899
==================

See Notes to Consolidated Finanical Statements

F-3

SiriCOMM, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Operations

Years Ended September 30, From Inception (April From Inception (April
------------------------------ 24, 2000) to 24, 2000) to
2004 2003 September 30, 2004 September 30, 2003
------------- -------------- ---------------------------------------

Revenues $ - $ - $ - $ -
Operating Expenses
General and administrative 407,597 252,758 1,024,044 616,447
Salaries and consulting fees 2,079,477 1,249,990 4,320,907 2,241,430
Stock-based compensaton 50,000 - 50,000 -
Write-off of note receivable - - 50,000 50,000
Research and development 26,450 77,567 362,669 336,219
Depreciation and amortization 21,803 19,293 64,262 42,459
------------ ------------ ------------ ------------
Total operating expenses 2,585,327 1,599,608 5,871,882 3,286,555
------------ ------------ ------------ ------------

Operating Loss (2,585,327) (1,599,608) (5,871,882) (3,286,555)
------------ ------------ ------------ ------------

Other Income (Expense)
Interest income 4,215 - 4,215 -
Other income 37,223 - 37,223 -
Interest expense (26,578) (50,948) (121,178) (94,600)
Loan costs (207,940) (475,453) (733,393) (525,453)
------------ ------------ ------------ ------------

Net Loss $ (2,778,407) $ (2,126,009) $ (6,685,015) $ (3,906,608)
============ ============ ============ ============

Add: Dividends declared on preferred stock (16,006) - (16,006) -
------------ ------------ ------------ ------------

Loss available to common shareholders $ (2,794,413) $ (2,126,009) $ (6,701,021) $ (3,906,608)
============ ============ ============ ============

Basic and diluted loss per common share $ (0.19) $ (0.21) $ (1.20) $ (1.34)
============ ============ ============ ============

Basic and diluted weighted average common
shares outstanding 14,684,210 10,014,621 5,578,687 2,921,094
============ ============ ============ ============

See Notes to Consolidated Finanical Statements

F-4

SiriCOMM, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Stockholders' Equity

Common Stock Additional
------------------- Paid-in Deferred Accumulated Treasury
Shares Amount Capital Compensation Deficit Stock Total
---------- ------- ---------- ------------ ----------- ---------- ----------

April 24, 2000

Issuance of founder shares at
inception 3,333 $ 3,333 $ - $ - $ - $ - $ 3,333
Conversion of debt to equity 6,372 6,372 379,844 - - - 386,216
Net loss for the period - - - - (398,391) - (398,391)
---------- ------- ---------- --------- ----------- ---------- ----------

Balance, September 30, 2000 9,705 9,705 379,844 - (398,391) - (8,842)

Issuance of common stock 295 295 288,709 - - - 289,004
Net loss - - - - (470,597) - (470,597)
---------- ------- ---------- --------- ----------- ---------- ----------

Balance, September 30, 2001 10,000 10,000 668,553 - (868,988) - (190,435)

Treasury stock purchased (253,524) (253,524)
Issuance of 1,472 treasury shares (184,641) 220,311 35,670
Net loss - - - - (911,611) - (911,611)
---------- ------- ---------- --------- ----------- ---------- ----------

Balance, September 30, 2002 10,000 10,000 483,912 - (1,780,599) (33,213) (1,319,900)

Reverse merger and reorganization 9,712,867 (277) (247,892) 33,213 (214,956)
Conversion of debt to equity 2,029,000 2,029 1,104,971 1,107,000
Stock issued for loan costs 137,782 138 272,574 272,712
Stock issued for services 1,001,944 1,002 1,144,157 1,145,159
Stock warrants issued for services 185,000 185,000
Stockholder contributions 829,838 (458,838) 371,000
Proceeds from stock issuance 75,000 75 74,925 75,000
Net loss (2,126,009) (2,126,009)
---------- ------- ---------- --------- ----------- ---------- ----------

Balance, September 30, 2003 12,966,593 12,967 3,847,485 - (3,906,608) (458,838) (504,994)

Fair value of conversion options
added to perferred stock - - (21,342) - - - (21,342)
Conversion of debt to equity 429,571 429 443,552 443,981
Stock issued for loan costs 9,593 10 13,670 13,680
Stock issued for services 570,000 570 1,306,610 (722,016) 585,164
Stock warrants exercised 176,000 176 87,824 88,000
Stock options issued for services 137,000 137,000
Stock options exercised 46,000 42 45,458 45,500
Proceeds from stock issuance
completed March 10, 2004; net of
consideration of $95,000 1,925,000 1,925 1,828,075 1,830,000
Proceeds from stock issuance
completed May 4, 2004 328,143 328 1,115,361 1,115,689
Issuance of options to employees, net 50,000 50,000
Accrued dividends (16,006) (16,006)
Treasury stock retired (195,250) (195) (458,643) 458,838 -
Net loss (2,778,407) (2,778,407)
---------- ------- ---------- --------- ----------- ---------- ----------
Balance, September 30, 2004 16,255,650 $16,252 $8,379,044 $(722,016) $(6,685,015) $ - $ 988,265
========== ======= ========== ========= =========== ========== ==========

See Notes to Consolidated Finanical Statements

F-5

SiriCOMM, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows

Years Ended September 30, From Inception (April From Inception (April
----------------------------------- 24, 2000) to 24, 2000) to
2004 2003 September 30, 2004 September 30, 2003
------------ ------------ --------------------- ---------------------
Restated Restated

Operating Activities
Net loss $ (2,778,407) $ (2,126,009) $ (6,685,015) $ (3,906,608)
Items not requiring (providing) cash
Depreciation and software amortization 21,803 19,293 64,262 42,459
Amortizaton of loan costs 181,940 475,453 707,393 525,453
Stock-based compensation for services 822,245 612,421 1,443,666 621,421
Stock-based compensation to employees 50,000 - 50,000 -
Settlement expense funded from debt
assumption - 100,672 128,672 128,672
Accrued interest forgiven (37,205) - (37,205) -
Write-off of note receivable - - 50,000 50,000
Other non-cash charges - 14,954 14,954 14,954
Changes in
Other current assets 538,045 15,000 538,045 -
Accounts payable (3,865) 88,745 50,816 101,181
Accrued and other liabilities 15,364 158,606 362,643 300,779
------------ ------------ ------------ ------------
Net cash used in operating activities (1,190,080) (640,865) (3,311,769) (2,121,689)
------------ ------------ ------------ ------------

Investing Activities
Cash acquired in business combination - 1,479 1,479 1,479
Purchase of property and equipment (682,760) - (782,719) (99,959)
Proceeds from sale of property and equipment - - 1,406 1,406
------------ ------------ ------------ ------------

Net cash provided by (used in) investing activities (682,760) 1,479 (779,834) (97,074)
------------ ------------ ------------ ------------

Financing Activities
Net borrowings under line of credit 122,000 - 122,000 -
Issuance of note receivable - - (50,000) (50,000)
Advances from (repayments to) officers, net - - 386,216 386,216
Proceeds from sale of common stock 2,945,689 75,000 3,313,026 367,337
Proceeds from exercise of stock options 133,500 - 133,500 -
Proceeds from long-term debt - 680,000 1,731,035 1,731,035
Payment of loan costs - - (50,000) (50,000)
Payment of notes payable and long-term debt (365,033) (103,618) (474,558) (109,525)
------------ ------------ ------------ ------------

Net cash provided by financing activities 2,836,156 651,382 5,111,219 2,275,063
------------ ------------ ------------ ------------
Increase in Cash 963,316 11,996 1,019,616 56,300

Cash and Cash Equivalents, Beginning of Year 56,300 44,304 - -
------------ ------------ ------------ ------------
Cash and Cash Equivalents, End of Year $ 1,019,616 $ 56,300 $ 1,019,616 $ 56,300
============ ============ ============ ============

See Notes to Consolidated Finanical Statements

F-6

Supplemental Cash Flows Information

Interest paid $ 26,578 $ 51,241 $ 43,053 $ 16,475
============ ============ ============ ============

Issuance of 74,610 shares of common stock
for services $ 85,122 $ - $ 85,122 $ -
============ ============ ============ ============

Conversion of debt or payables to equity $ 595,529 $ 1,107,000 $ 2,088,745 $ 1,493,216
============ ============ ============ ============

Issuance of 9,842 shares of common stock
for loan costs $ 13,680 $ - $ 13,680 $ -
============ ============ ============ ============

Acquisition of treasury stock for note payable $ - $ - $ 253,524 $ 253,524
============ ============ ============ ============

Issuance of treasury stock for prepaid services $ - $ - $ 35,670 $ 35,670
============ ============ ============ ============

Debt assumed pursuant to reverse acquisition $ - $ 100,000 $ 100,000 $ 100,000
============ ============ ============ ============

Stock offering costs funded through issuance
of stock $ - $ 26,670 $ 26,670 $ 26,670
============ ============ ============ ============

Stockholder contribution of stock options on
behalf of the Company $ - $ 371,000 $ 371,000 $ 371,000
============ ============ ============ ============

Deferred compensation $ 721,667 $ - $ 721,667 $ -
============ ============ ============ ============

Accrued dividends for 213,417 shares of
series A preferred stock $ 16,006 $ - $ 16,006 $ -
============ ============ ============ ============

Retirement of 195,250 shares of common
stock to the treasury $ 459,187 $ - $ 459,187 $ -
============ ============ ============ ============

Stockholder contribution of 195,250 shares of
common stock to the treasury $ - $ 829,838 $ 829,838 $ 829,838
============ ============ ============ ============

Fair value of conversion option added to
preferred stock $ 21,342 $ - $ 21,342 $ -
============ ============ ============ ============

See Notes to Consolidated Finanical Statements

F-7

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Note 1: Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

SiriCOMM, Inc.- Missouri, incorporated in the State of Missouri on
April 24, 2000, has developed broadband wireless application service
technologies intended for use in the transportation industries.

As part of the transaction treated as a reverse merger on November 21,
2002, SiriCOMM, Inc (f/k/a Fountain Pharmaceuticals, Inc.), a Delaware
corporation (the "Company" or "SiriCOMM") completed the acquisition of
all the issued and outstanding shares of SiriCOMM, Inc. - Missouri
("SiriCOMM Missouri"). An aggregate 9,622,562 shares of common stock
were issued to SiriCOMM Missouri shareholders. Furthermore, the Company
issued 1,922,000 shares to retire $1,000,000 of convertible notes
issued by SiriCOMM Missouri.

The Company's development activities include integrating multiple
technologies including satellite communications, the Internet, wireless
networking, and productivity enhancing software into commercially
viable products and services. The Company has commenced its initial
product offering of Internet Services Subscriptions, but has not
generated any meaningful revenue as of the filing of these financial
statements.

Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its majority-owned subsidiary, SiriCOMM Missouri. All
significant intercompany accounts and transactions have been eliminated
in consolidation.

Use of Estimates

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 period.
Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities
of three months or less to be cash equivalents. At September 30, 2004,
cash equivalents consisted primarily of money market accounts with
banking institutions. Approximately $900,000 was held in one
institution in excess of guaranteed amounts.

F-8

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Property and Equipment

Property and equipment are depreciated over the estimated useful life
of each asset. Annual depreciation is primarily computed using
straight-line methods.

Income Taxes

Deferred tax assets and liabilities are recognized for the tax effects
of differences between the financial statement and tax bases of assets
and liabilities. A valuation allowance is established to reduce
deferred tax assets if it is more likely than not that a deferred tax
asset will not be realized. The Company files consolidated income tax
returns with its subsidiary.

Research and Development

The Company incurs costs associated with computer software to be
marketed in the future. Costs incurred in connection with establishing
technological feasibility have been expensed as research and
development costs.

Advertising

The Company had advertising expenses of $6,799 and $0 in 2004 and 2003,
respectively, and are included in general and administrative expenses
in the financial statements.

Net Loss Per Share

Net loss per share represents the net loss available to common
stockholders after giving effect to preferred share dividends divided
by the weighted average number of common shares outstanding during the
year. Diluted earnings per share reflect the potential dilution which
could occur if convertible preferred stock was converted into common
stock. Diluted net loss per share is considered to be the same as basic
net loss per share since the effect of the issuance of common stock
associated with the convertible stock is anti-dilutive.

Stock Option Plan

At September 30,2004, the Company has a stock-based employee
compensation plan, which is described more fully in Note 8. The Company
accounts for this plan under the recognition and measurement principles
of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. Stock-based employee compensation cost is
reflected in net income whereby certain options granted under the plan
had an exercise price less than the market value of the underlying
common stock on the grant date. The following table illustrates the
effect on net income and earnings per share if the Company had applied
the fair value provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation.

F-9

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Year Ended September 30
2004 2003
----------------------------------------

Net income, (loss) as reported $ (2,778,407) $ (2,126,009)
Add back intrinsic values of options issued to employees 50,000 --
Less: Total stock-based employee compensation cost
determined under the fair value based method, net of
income taxes (280,469) --
------------- -------------

Pro forma net income (loss) $ (3,008,876) $ (2,126,009)
============= =============
Earnings (loss) per share:
Basic and diluted - as reported $ 0.19 $ 0.21
============= =============
Basic and diluted - pro forma $ 0.21 $ 0.21
============= =============

Recent Accounting Pronouncements

In December 2003, the FASB issued Interpretation No. 46 (revised),
"Consolidation of Variable Interest Entities, an Interpretation of ARB
No. 51," ("FIN 46R"). FIN 46R addresses how a business enterprise
should evaluate whether it has a controlling financial interest in an
entity through means other than voting rights and, accordingly, should
consolidate the variable interest entity ("VIE"). Fin 46R replaces
FIN46 that was issued in January 2003. All public companies were
required to fully implement FIN 46R no later than the end of the first
reporting period ending after March 15, 2004. The adoption of FIN 46R
had no impact on SiriCOMM's financial condition or results of
operations.

On December 16, 2004, the Financial Accounting Standards Board (FASB)
issued FASB Statement No. 123 (revised 2004), Share-Based Payment,
which is a revision of FASB Statement No. 123, Accounting for
Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No.
25, Accounting for Stock Issued to Employees, and amends FASB Statement
No. 95, Statement of Cash Flows. The approach to accounting for
share-based payments in Statement 123(R) is similar to the approach
described in Statement 123. However, Statement 123(R) requires all
share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their
fair values and no longer allows pro forma disclosure as an alternative
to financial statement recognition. The Company will be required to
adopt Statement 123(R) at the beginning of its quarter ending March 31,
2006. The Company has not determined what financial statement impact
Statement 123(R) will have on the Company.

F-10

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Reclassifications

Certain reclassifications have been made to the 2003 financial
statements to conform to the 2004 financial statement presentation.
These reclassifications had no effect on net earnings.

Note 2: Liquidity Matters

The Company is in development and has not generated any revenue through
September 30, 2004. It has financed its activities thus far primarily
from the placement of private equity and from short-term loans.

The Company recently completed the first 255 of the 400 sites which
were part of its initial network plan. In December 2004, the Company
commenced selling its In TouchTM Internet Service Provider design,
although to date no meaningful revenues have been realized.

Management has established several alliance partners to market its
products and services, and is in negotiations with certain significant
potential customers for its services. There can be no assurances
offered that these relationships and negotiations will result in
realization of significant revenues. If revenues are not realized as
planned, additional financing through equity issuances and draws on the
Company's line of credit may be required for working capital needs and
to complete the long-term financial objectives of the Company.

Note 3: Line of Credit

During 2004, the Company entered into a line of credit with Southwest
Missouri Bank for the purchase of network infrastructure equipment up
to a maximum of $1,000,000. This note is 80% guaranteed by the U.S.
Department of Agriculture and is secured by the network equipment. This
note is further personally guaranteed by the Company's majority
shareholder. The note is a demand note, but if no demand is made then
monthly payments of accrued interest at an initial rate of 5.5% on the
guaranteed portion and 7.0% on the unguaranteed portion plus monthly
principal payments of $2,358. The note is amortized over 59 months
beginning September 25, 2004 with a final payment on August 25, 2009.

Note 4: Long-term Debt

Unsecured note payable to an individual due March 3, 2004
accruing interest at 4%. The note is classified as current in
the financial statements. $ 25,000
========

F-11

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Note 5: Stockholders' Equity

Common Stock

On March 10, 2004, the Company closed the sale of 2,000,000 units
("Units") at $1.00 per Unit to investors. Each Unit consists of one
share of the Company's common stock and one three-year warrant
exercisable at $2.00 per share. Among the investors in this offering
was Mr. Terry W. Thompson, a director of the Company who purchased
100,000 Units. The net proceeds resulting from the sale were
$1,830,000.

On May 4, 2004, the Company closed the sale of 328,143 units ("Units")
at $3.40 per Unit to investors. Each Unit consists of one share of the
Company's common stock and one quarter (1/4) of a three-year warrant
exercisable at $4.75 per share. The net proceeds resulting from the
sale were $1,115,689.

The Company issued an aggregate of 388,961 shares to individuals to
convert $388,961 of debt to equity. Among the investors converting
their debt was Mr. Terry W. Thompson, a director of the Company who
converted $50,600 of debt into 50,600 Units. Additionally, the Company
issued an aggregate of 40,610 shares to partners of the Company's
securities counsel, Sommer & Schneider LLP. The shares were issued in
lieu of $44,000 of outstanding legal fees due the firm.

The Company issued 570,000 shares pursuant to three consulting
arrangements entered into during 2004. The Company also issued 176,000
shares pursuant to exercise of warrants which had an exercise price of
$.50 per unit during fiscal 2004.

Deferred Compensation

During 2004, the Company entered into a consulting agreement for the
issuance of 436,000 shares whereby 87,200 shares can be realized
annually upon meeting certain performance measurements over a 5-year
period. As of September 30, 2004, 348,800 shares were issued but

F-12

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

potentially forfeitable if performance measures are not met by the
consultant. The Company has recorded a deferred compensation of
$722,016 against equity as of September 30, 2004 to account for the
potentially forfeitable shares.

Non-Employee Warrants and Options

The Company issued warrants and options during the year for various
purposes, including completion of consulting arrangements and private
placements with regard to common stock. The Company issued 3,545,270
warrants or options during 2004 of which 218,500 were exercised at a
weighted-average exercise price of $.60. At September 30, 2004, the
Company had 3,326,770 warrants or options outstanding with exercise
prices ranging from $.50 to $4.75. The weighted-average exercise price
of the outstanding warrants was $1.89 at September 30, 2004.

Note 6: Preferred Stock

The Company authorized 500,000 shares of Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock"), par value
of $.001 per share, during fiscal 2004. The shares may be converted to
fully-paid and non-assessable shares of Common Stock at the option of
the holder at $2.00 per share. The Series A Preferred Stock are
redeemable at the option of the holder three years subsequent to the
date of issuance at a redemption price equal to 110% of the stated
value, plus an amount per share equal to all accrued and unpaid
dividends.

In December 2003, the Company issued an aggregate of 213,417 shares of
its Series A Preferred Stock pursuant to the conversion of an aggregate
of $200,000 of debt due by the Company.

Note 7: Operating Lease

The Company currently occupies 1,200 square feet within an office
building and operates on month-to-month lease term. Rent expense for
the building and other non-reoccurring items was $29,700 and $25,500
for 2004 and 2003, respectively.

Income Taxes

The provision for income taxes includes these components:

2004 2003
----------------------------------------

Taxes currently payable $ -- $ --
Deferred income taxes -- --
---------------- ----------------
Income tax expense (benefit) $ 0 $ 0
================ ================

A reconciliation of income tax expense at the statutory rate to the
Company's actual income tax expense is shown below:

2004 2003
----------------------------------------

Computed at the statutory rate (34%) $ (944,658) $ (720,000)
Increase (decrease) resulting from
Nondeductible expenses 2,081 405,000
State income taxes (68,396) (75,000)
Changes in the deferred tax asset valuation allowance 1,010,973 390,000
---------------- ----------------
Actual tax expense (benefit) $ 0 $ 0
=============== ================

F-13

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

The tax effects of temporary differences related to deferred taxes
shown on the balance sheet were:

Deferred tax assets
Stock-based compensation and loan costs $ 732,221
Accrued shareholder salaries 87,500
Start-up costs 37,833
Net operating loss carryforwards 808,919
Other 17,500
----------------

Net deferred tax asset before valuation allowance 1,683,973
----------------

Valuation allowance
Beginning balance 673,000
Increase during the period 1,010,973
----------------

Ending balance 1,683,973
----------------

Net deferred tax asset $ 0
================

The Company also has unused operating loss carryforwards of
approximately $2,310,000 which expire through 2024.

Note 8: Employee Stock Plans

Stock Option Plan

The Company has adopted a stock option plan under which the Company may
grant options that vest immediately to its employees for up to
3,000,000 shares of common stock. Pursuant to the stock option plan,
the Company may issue to eligible persons, stock options, stock
appreciation rights, restricted stock performance awards and bonus
stock until May 15, 2012. The exercise price of each qualified
incentive option is equal to the fair value of the Company's stock on
the date of grant. The Company may issue non-qualified options at any
price the Board of Directors deems fair. An option's maximum term is 10
(ten) years.

F-14

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

A summary of the status of the plan at September 30, 2004 and changes
during the year then ended is presented below:

2004 2003
Weighted-Average Weighted-Average
Shares Exercise Price Shares Exercise Price
-------------------------------------------------------------------------------

Outstanding,
beginning of year -- $ -- -- $ --
Granted 310,000 $ 1.88 -- $ --
Exercised 3,500 $ 1.00 -- $ --
--------- ---------

Outstanding, end of
year 306,500 $ 1.89 0 $ --
========= =========

Options exercisable,
end of year 250,500 $ 1.40 0 $ --
========= =========

The fair value of options granted is estimated on the date of the grant
using the minimum value method with the following weighted-average
assumptions:

2004 2003
----------------------------------------

Dividend per share $ 0 $ 0
Risk-free interest rate 2-5% --
Expected life of options 1-6 years --

Weighted-average fair value of options granted during the
year $ 1.40 $ --

The following table summarizes information about stock options under
the plan outstanding at September 30, 2004.

Options Outstanding Options Exercisable
Weighted-Average
Range of Exercise Number Remaining Contractual Weighted-Average Number Weighted-Average
Prices Outstanding Life Exercise Price Exercisable Exercise Price
--------------------------------------------------------------------------------------------------------------------

$1.00 - 1.49 216,500 9 years $1.05 216,500 $1.05
$3.40 - 3.40 25,000 5 years $3.40 20,000 $3.40
$4.05 - 4.50 65,000 8 years $4.12 14,000 $4.05

F-15

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Note 9: Related Party Transactions

The Company repaid the majority shareholder $9,787 in principal and
interest during 2004 for a note payable issued previously.

Mr. Iler, the Chief Financial Officer, was retained as a consultant to
advise on strategic capital formation prior to his election as a
Director and Chief Financial Officer. Mr. Iler was paid $37,500 in
consulting fees and reimbursement of office expenses of $12,500 in 2004
and $46,000 in 2003, for his services.

Note 10: Disclosures About Fair Value of Financial Instruments

The following methods were used to estimate the fair value of financial
instruments.

The fair values of certain of these instruments were calculated by
discounting expected cash flows, which method involves significant
judgments by management and uncertainties. Fair value is the estimated
amount at which financial assets or liabilities could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. Because no market exists for certain of these
financial instruments and because management does not intend to sell
these financial instruments, the Company does not know whether the fair
values shown below represent values at which the respective financial
instruments could be sold individually or in the aggregate.

Notes Payable and Long-term Debt

Fair value is estimated based on the borrowing rates currently
available to the Company for bank loans with similar terms and
maturities.

The following table presents estimated fair values of the Company's
financial instruments at September 30, 2004.

Carrying Amount Fair Value
------------------------------------
Financial assets
Cash and cash equivalents $ 1,019,616 $ 1,019,616

Financial liabilities
Notes payable $ 122,000 $ 122,000
Long-term debt $ 25,000 $ 25,000

F-16

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Note 11: Commitments

The Company has three executive employee agreements with certain
officers and directors. As a part of these agreements the Company is
obligated to pay these individuals aggregate compensation of $425,000
annually through February 2005. At September 30, 2004, the Company had
paid $646,000 for the installation of the initial network and was
committed to paying approximately $226,000 for completion of the
installation.

Note 12: Subsequent Events

On December 17, 2004, certain officers and directors of the Company
were named defendants in a lawsuit entitled Greg Sanders v. Henry
Hoffman et al. Messrs. Hoffman, Dilman, Mendez and Iler are officers
and directors of the Company, Mr. Thompson is a director of the Company
and Mr. Noland is a former officer and director of the Company. The
action alleges fraud, misrepresentation and breach of fiduciary duty
relating to a settlement agreement entered into between the Company and
Mr. Sanders. The complaint seeks damages in excess of $9,679,903. The
Company will pay all expenses relating to the defense of this matter.
In management's opinion this case is without merit and the defendants
intend on defending this matter vigorously.

Effective as of December 31, 2004, the Company consummated a private
placement of its Units pursuant to a Confidential Investment Proposal
dated October 11, 2004 and amended on December 20, 2004. Each Unit
consisted of 50,000 shares of the common stock and a Common Stock
Warrant to purchase 37,500 shares of common stock. As part of the
private placement, the Company sold an aggregate of 6.38 Units (319,000
shares and warrants to purchase 239,250 shares of common stock) for an
aggregate purchase price of $638,000, or $100,000 per Unit. The
warrants entitle the holders to purchase shares of the common stock for
a period of five years from the date of issuance at an exercise price
of $2.40 per share. The warrants contain certain anti-dilution rights
and are redeemable by the Company, on terms specified in the warrants.

In connection with the private placement, Sands Brothers International
Limited, the placement agent in the private placement, received a cash
commission fee of 9% of the gross proceeds to the Company of the
securities sold at the closing, a payment of $30,000 representing the
fees and expenses of its counsel in the private placement and warrants
to purchase 10% of the shares sold in the private placement. The
warrants are exercisable for a period of five years at an exercise
price of $2.40 per share and contain the same anti-dilution rights as
the common stock warrants.

On January 5, 2005, the Company issued an aggregate of 85,000 shares of
its common stock upon the exercise of a like number of warrants,
exercisable at $2.00 per share. The warrants were originally issued in
January 2004 pursuant to a private placement of the Company's Units
consisting of common stock and warrants.

As an inducement to the investors exercising their warrants, the
Company issued an aggregate of 63,750 new warrants to the investors.
The new warrants entitle the holders to purchase shares of the
Company's common stock reserved for issuance thereunder for a period of
five years from the date of issuance at an exercise price of $2.40 per
share. The warrants contain anti-dilution rights and are redeemable by
the Company, in whole or in part, on terms specified in the warrants.

F-17

SiriCOMM, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2004 and 2003

Note 13: Restatement of Prior Financial Statements

During the fourth quarter of fiscal 2005 the Company changed its method
of accounting for it Series A redeemable, convertible preferred stock.
The September 30, 2004 financial statements, as previously presented,
included preferred stock at par value as a component of stockholders'
equity. The Company has retroactively restated its September 30, 2004
financial statements to report the redemption value of Series A
preferred stock outside of liabilities and stockholders' equity. This
change, current liabilities and stockholders' equity as of September
30, 2004 have decreased from the previously reported totals by $16,006
and $234,759, respectively.

F-18