UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended ~~June~~September 30, 2005.


o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .

Commission file number: 0-50036

TRICELL, INC.

(Exact name of registrant as specified in its charter)

Nevada		88-0504530
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)

6 Howard Place, Stoke-on-Trent, Staffordshire, ST1 4NQ United Kingdom
(Address of principal executive offices) (Zip Code)

011 44 8707 53 2360
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes þ o No o þ

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

~~The~~Yes ~~number~~o No ~~of shares of common stock outstanding as of August 12, 2005 was 94,795,877.~~ þ

The number of shares of common stock outstanding as of November 10, 2005 was 94,795,877.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION			3
	Item 1.	Financial Statements	3
	Item 2.	Management's Discussion And Analysis of Financial Condition and Results of Operations	4
		Results of Operations	4
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
	Item 4.	Controls and Procedures	9
PART II — OTHER INFORMATION			10
	Item 1.	Legal Proceedings	10
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
	Item 4.	Submission of Matters to a Vote of Security Holders	10
	Item 6.	Exhibits and Reports on Form 8-K	10
Certification of CEO and PFO Pursuant to Section 302
INDEX TO EXHIBITS			12
Certification of CEO and PFO Pursuant to 18 U.S.C. Section 1350
Certification of Chief Executive Officer
Certification of Chief Financial Officer
Certification of Chief Executive Officer
Certification of Chief Financial Officer

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

TRICELL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,
	September 30,
	2005			December 31,
	(Unaudited)			2004
ASSETS
CURRENT ASSETS
Cash	$	1561,~~400,893~~949		$	6
VAT receivable, net		~~190~~39,~~870~~977			43,691
Notes and loans receivable		~~473,300~~—			57,798
Receivable from shareholder		9088,~~928~~812			59,534
Accounts receivable, net		2736,~~178~~146,~~649~~258			503,939
Prepaid expenses and other current assets		~~238~~315,~~843~~038			256,809
Total Current Assets		2937,~~573~~152,~~483~~034			921,777
MACHINERY AND EQUIPMENT, NET		~~159~~143,~~842~~485			53,542
INTELLECTUAL PROPERTY, NET		6357,~~170~~293			77,064
GOODWILL		46,287			—
TOTAL ASSETS	$	2937,~~842~~399,~~782~~099		$	1,052,383
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Income taxes payable	$	2,~~735~~832,~~040~~815		$	2,888,672
Accounts payable		2835,~~846~~396,~~452~~595			1,163,701
Accrued expenses and other current liabilities		2,~~045~~739,~~676~~023			1,253,902
Mortgage payable, short-term		226,705			—
Total Current Liabilities		40,968,433			5,306,275
Total Current Liabilities		33,853,873			5,306,275
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock		94,753			93,753
Additional paid-in capital		343,757			314,757
Retained deficit		(4,881,019	)		(4,833,911	)
Accumulated deficit		(4,616,049	)		(4,833,911	)
Accumulated other comprehensive income		~~549~~686,~~548~~965			368,391
Deferred compensation		(~~118~~78,~~130~~760	)		(196,882	)
Total Stockholders’ Equity (Deficit)		(43,~~011~~569,~~091~~334	)		(4,253,892	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	2937,~~842~~399,~~782~~099		$	1,052,383

See accompanying notes to condensed consolidated financial statements.

F-1

TRICELL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2005 AND 2004

(Unaudited)

	2005			2004
SALES	$	~~220~~240,~~508~~167,~~455~~787		$	43,~~467~~996,~~745~~543
COST OF SALES		~~219~~237,~~100~~140,~~603~~064			43,~~267~~971,~~267~~499
GROSS PROFIT		13,~~407~~027,~~852~~723			~~200~~25,~~478~~044
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		~~651~~2,~~866~~127,752			1681,~~388,540~~395
INCOME (LOSS) FROM OPERATIONS		~~755~~899,~~986~~971			(1656,~~188,062~~351	)
OTHER INCOME (EXPENSES):
Interest income		335,515			—
Interest expense and other financing costs		(~~847~~392,~~338~~040	)		(6943,~~329~~462	)
TOTAL OTHER INCOME (EXPENSES)		(~~847~~386,~~305~~525	)		(6943,~~329~~462	)
LOSS BEFORE INCOME TAXES		(91,319	)		(1,257,391	)
INCOME (LOSS) BEFORE INCOME TAXES		513,446			(699,813	)
INCOME TAX BENEFIT		16,389			193,774
INCOME TAX (EXPENSE) BENEFIT		(163,546	)		(177,368	)
NET LOSS	$	(74,930	)	$	(1,063,617	)
NET INCOME (LOSS)	$	349,900		$	(877,181	)
LOSS PER SHARE — BASIC AND DILUTED	$	—		$	(0.01	)
INCOME (LOSS) PER SHARE — BASIC AND DILUTED	$	—		$	(0.01	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC AND DILUTED		9394,753,020			93,753,020

See accompanying notes to condensed consolidated financial statements.

F-2

TRICELL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2005 AND 2004

(Unaudited)

	2005			2004
SALES	$	~~276~~516,~~775~~943,~~381~~168		$	812,~~775~~772,~~906~~449
COST OF SALES		~~274~~511,~~589~~729,~~325~~389			812,~~497~~468,~~231~~730
GROSS PROFIT		25,~~186~~213,~~056~~779			~~278~~303,~~675~~719
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		13,~~216~~314,~~483~~235			12,~~989~~670,~~084~~479
INCOME (LOSS) FROM OPERATIONS		~~969~~1,~~573~~899,544			(12,~~710~~366,~~409~~760	)
OTHER INCOME (EXPENSES):
Interest income		~~319~~5,834			—
Interest expense and other financing costs		(1,~~091~~483,~~406~~446	)		(~~112~~155,~~204~~666	)
TOTAL OTHER INCOME (EXPENSES)		(1,~~091~~477,~~087~~612	)		(~~112~~155,~~204~~666	)
LOSS BEFORE INCOME TAXES		(121,514	)		(1,822,613	)
INCOME (LOSS) BEFORE INCOME TAXES		421,932			(2,522,426	)
INCOME TAX (EXPENSE) BENEFIT		(40204,~~524~~070	)		~~280~~103,~~750~~382
NET LOSS	$	(162,038	)	$	(1,541,863	)
NET INCOME (LOSS)	$	217,862		$	(2,419,044	)
LOSS PER SHARE — BASIC AND DILUTED	$	—		$	(0.02	)
INCOME(LOSS) PER SHARE — BASIC AND DILUTED	$	—		$	(0.03	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC AND DILUTED		9394,~~753~~086,~~020~~353			93,~~684~~707,~~142~~102

See accompanying notes to condensed consolidated financial statements.

F-3

TRICELL , INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2005 AND 2004

(Unaudited)

	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	~~(162~~217,~~038~~862	)	$	(12,~~541~~419,~~863~~044	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1943,~~128~~742			81135,~~916~~735
Amortization of deferred compensation		~~196~~118,~~880~~127			3978,~~376~~752
Bad debt		7271,~~457~~600			—
Changes in operating assets and liabilities:
(Increase) decrease in:
VAT receivable		~~(154~~3,~~318~~714	)		1,~~076~~382,~~104~~817
Accounts receivable		~~309~~(9,~~859~~468,956	)		8018,~~239~~375
Other receivables		~~110~~391,~~433~~386			—
Prepaid and other current assets		(417,~~802~~487	)		~~119~~97,~~857~~538
Increase (decrease) in:
Accounts payable and accrued expenses		98,~~968~~072,095			~~387~~753,~~229~~901
Other current liabilities		~~129~~88,~~699~~804			(~~193~~129,~~345~~443	)
Income taxes payable		39189,~~486~~737			(~~295~~119,~~000~~591	)
Net Cash Provided By (Used in) Operating Activities		~~566~~(289,~~752~~376	)		(~~245~~200,~~487~~960	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of machinery and equipment		(6267,~~305~~676	)		—
Proceeds from sale of machinery and equipment		—			~~143~~144,~~215~~248
Cash paid in acquisition of ACL Distribution		—			(~~135~~136,~~634~~613	)
Cash paid in acquisition of ACE Telecom		1,090,900			—
Cash received in acquisition of ACE Telecom		1,035,294			—
Loans to shareholder		(31,394	)		—
Net Cash Provided by Investing Activities		967,618			7,635
Loans to third-parties		(175,764	)		—
Net Cash Provided by Investing Activities		821,437			7,581
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans to shareholder		—			275,689
Collection of loans to shareholder		—			277,679
Repayment of loans to third parties		55,724			—
Loans to shareholder		(29,278	)		—
Loans from shareholder		—			61,147
Repayment of loans to third parties		(98,350	)		—
Repayment of long-term debt		—			(7269,~~253~~350	)
Net Cash Provided by Financing Activities		55(127,~~724~~628	)		~~264~~208,~~583~~329
NET INCREASE IN CASH		1550,~~443,913~~614			2615,~~677~~004
EFFECT OF EXCHANGE RATE ON CASH		~~(43~~11,~~026~~329	)		9(1,~~680~~898	)
CASH, BEGINNING OF PERIOD		6			183,241
CASH, END OF PERIOD	$	1561,~~400,893~~949		$	~~219~~196,~~598~~347
SUPPLEMENTAL DISCLOSURE OF CASH
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
FLOWS INFORMATION:
Interest paid during the period	$	1,519,953		$	155,860
Interest paid during the period	$	1,086,953		$	111,552
Income taxes paid during the period	$	—		$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
INVESTING AND FINANCING ACTIVITIES:
253,020 shares issued for deferred compensation				$	315,010
1,000,000 shares of common stock issued for the acquisition of ACE Telecom	$	30,000

See accompanying notes to condensed consolidated financial statements.

F-4

TRICELL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

NOTE 1 — BASIS OF PRESENTATION

The condensed consolidated balance sheet as of ~~June~~September 30, 2005, the condensed ~~consolidated~~ consolidated statements of operations for the three months and ~~six~~nine months ended ~~June~~ September 30, 2005 and 2004, and the condensed consolidated statements of cash flows for the ~~six~~ nine months ended ~~June~~September 30, 2005 and 2004 are unaudited. However, in the opinion of management, all adjustments (which include reclassifications and normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at ~~June~~September 30, 2005 and for all periods presented, have been made. The results of operations for the three-month and ~~six~~ nine-month period ended ~~June~~September 30, 2005 are not necessarily indicative of the operating results for the full year.

These condensed consolidated financial statements and notes are presented in accordance with rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s December 31, 2004 Form 10-K.

PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements include the accounts of Tricell, Inc. and Subsidiaries (the “Company”) and its wholly-owned subsidiaries, Tricell UK LTD, Tricell International LTD (formerly Tricell Limited), Tricell Distribution Limited, Tricell Properties Limited, ACE Telecom, and ACE Telecom Trading. All significant intercompany balances and transactions have been eliminated.

REPORTING PERIOD

The accompanying condensed consolidated financial statements for the three months and ~~six~~nine months ended ~~June~~September 30, 2005 depict the results of operations and cash flows of Tricell, Inc. and all subsidiaries. The accompanying condensed consolidated financial statements for the ~~three~~ three months and ~~six~~nine months ended ~~June~~September 30, 2004 depict the results of operations and cash flows of Tricell, Inc., Tricell UK LTD and Tricell International LTD for the three months and ~~six~~nine months ended ~~June~~September 30, 2004 and the results of operations and cash flows of Tricell Distribution Limited from February 9, 2004 (date of acquisition) to ~~June~~ September 30, 2004.

NOTE 2 — ACQUISITIONS

ACQUISITION OF ACE TELECOM LIMITED AND SUBSIDIARY

On June 30, 2005, the Company executed a Sale Agreement with ACE Telecom Limited (“ACE”), and its wholly owned subsidiary, ACE Telecom Trading Limited. Pursuant to the

F-5

~~TRICELL~~Agreement, ~~INC~~the Company acquired all of the issued and outstanding capital stock of ACE, in aggregate, in exchange for 1,000,000 shares of the Company’s common stock. ~~AND~~The 1,000,000 ~~SUBSIDIARIES~~were valued at $30,000 based on the price of $.03 on the date of acquisition. Pursuant to the Agreement, all of the issued and outstanding capital stock of ACE immediately prior to closing was transferred to the Company by the Shareholders, who in exchange received the Shares in a pro rata manner. As a result, ACE became a wholly-owned subsidiary of the Company.

~~NOTES~~The TOfollowing ~~CONDENSED~~table ~~CONSOLIDATED~~sets ~~FINANCIAL~~forth ~~STATEMENTS~~the preliminary allocation of the purchase price to ACE’s tangible and intangible assets acquired and liabilities assumed as of June 30, 2005:

JUNE 30, 2005

(Unaudited)

NOTE 2 – ACQUISITIONS

ACQUISITION OF ACE TELECOM LIMITED AND SUBSIDIARY

On June 30, 2005, the Company executed a Sale Agreement with ACE Telecom Limited (“ACE”), and its wholly owned subsidiary, ACE Telecom Trading Limited. Pursuant to the Agreement, the Company acquired all of the issued and outstanding capital stock of ACE, in aggregate, in exchange for 1,000,000 shares of the Company’s common stock. The 1,000,000 were valued at $30,000 based on the price of $.03 on the date of acquisition. Pursuant to the Agreement, all of the issued and outstanding capital stock of ACE immediately prior to closing was transferred to the Company by the Shareholders, who in exchange received the Shares in a pro rata manner. As a result, ACE became a wholly-owned subsidiary of the Company.

The following table sets forth the preliminary allocation of the purchase price to ACE’s tangible and intangible assets acquired and liabilities assumed as of January 1, 2005:


Cash	$	1,059,961
Accounts receivable, net		27,069,017
Other receivables		406,080
Prepaid expenses and other current assets		6,371
Fixed assets		58,708
Goodwill		46,287
Accounts payable		(27,806,866	)
Accrued expenses and other current liabilities		(592,229	)
Income tax payable		9,376
Mortgage payable		(226,705	)


Total	$	30,000

PRO-FORMA RESULTS OF OPERATIONS

The following sets forth the Company’s results of operations for the nine months and three months ended September 30, 2005 as if the acquisitions had taken place on January 1, 2004:


	NINE MONTHS ENDED
	SEPTEMBER 30,
	2005		2004
Revenues	$	592,266,425	$	84,099,066

Net Income	$	119,895	$	(2,036,662	)

Earnings per share
Basic	$	0.00	$	(0.02	)
Diluted	$	0.00	$	(0.02	)

F-6

TRICELL, INC. AND SUBSIDIARIES


	THREE MONTHS ENDED
	SEPTEMBER 30,
	2005		2004
Revenues	$	240,167,787	$	27,369,395

Net Income	$	349,900	$	202,663

Earnings per share
Basic	$	0.00	$	0.00
Diluted	$	0.00	$	0.00

~~NOTES~~NOTE TO3 ~~CONDENSED~~— ~~CONSOLIDATED~~LINE ~~FINANCIAL~~OF ~~STATEMENTS~~CREDIT

~~JUNE~~On 30February 28, 2005, Tricell Distribution (“the Borrower”) entered into a line of credit agreement with an unrelated third party (“the Lender”) for a maximum of £2 million, or approximately $3,500,000, for the purpose of funding the purchase of mobile communication equipment. Upon receiving a written request stating the quantity of units to be purchased, purchase price, sale price, expected gross profit, and the expected date of resale, the Lender will advance the Borrower the required sum up to the maximum amount. Repayment of the loan principal is due upon completion of the sale of the equipment, and on that date, the Borrower must pay the Lender 50% of the gross profit from the resale of the equipment. For purposes of this agreement, gross profit is described as total sale price less total purchase price excluding applicable taxes. Should the Borrower file for bankruptcy, the balance of the loan will become immediately due and payable with interest calculated at the Barclays Bank base rate.

~~(Unaudited)~~As of September 30, 2005, there was no balance due the Lender.

NOTE 24 –— ~~ACQUISITIONS,~~COMMITMENTS ~~CONTINUED~~AND CONTINGENCIES

PRO-FORMA RESULTS OF OPERATIONS

The following sets forth the Company’s results of operations for the six months and three months ended June 30, 2005 as if the acquisitions had taken place on January 1, 2004:

	SIX MONTHS ENDED JUNE 30,
	2005			2004
Revenues	$	352,098,638		$	56,730,480
Net Income	$	(318,544	)	$	(1,637,352	)
Earnings per share
Basic	$	—		$	(0.02	)
Diluted	$	—		$	(0.02	)

	THREE MONTHS ENDED JUNE 30,
	2005			2004
Revenues	$	295,143,017		$	52,055,761
Net Income	$	(230,005	)	$	(1,158,376	)
Earnings per share
Basic	$	—		$	(0.01	)
Diluted	$	—		$	(0.01	)

NOTE 3 – LINE OF CREDIT

On February 28, 2005, Tricell Distribution (“the Borrower”) entered into a line of credit agreement with an unrelated third party (“the Lender”) for a maximum of $3,837,800 for the purpose of funding the purchase of mobile communication equipment. Upon receiving a written request stating the quantity of units to be purchased, purchase price, sale price, expected gross profit, and the expected date of resale, the Lender will advance the Borrower the required sum up to the maximum amount. Repayment of the loan principal is due upon completion of the sale of the equipment, and on that date, the Borrower must pay the Lender 50% of the gross profit from the resale of the equipment. For purposes of this agreement, gross profit is described as total sale price less total purchase price excluding applicable taxes.

F-7

TRICELL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

NOTE 3 – LINE OF CREDIT (CONTINUED)

Should the Borrower file for bankruptcy, the balance of the loan will become immediately due and payable with interest calculated at the Barclays Bank base rate.

As of June 30, 2005, there was no balance due the Lender.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

CONTINGENCIES

In the ordinary course of business, the Company filed monthly claims for refund of VAT (Value-Added-Tax) of approximately $14,230,000 for November 2002 through February 2003. The VAT authorities determined that $1,650,000 of this VAT was associated with particular transactions involved in “Carousel” and/or “Missing Trader” fraud and therefore, the refund of the VAT was denied. The Company referred the matter to the Tribunal which upon review concluded that there was no wrongdoing by the Company, however, they concluded that these transactions had no economic substance, since the VAT had not been previously paid by a trader up the supply chain, and therefore as the VAT was not held by the VAT authorities, no refund was available.

While the Company continues to seek recovery of this VAT, based upon the Tribunal findings, recovery of the VAT associated with these transactions is uncertain. The Company did not provide for an allowance against VAT receivable as of ~~June~~September 30, 2005 and ~~December 31, 2004.~~

F-7

December 31, 2004.

GUARANTEES

At ~~June~~September 30, 2005, the Company was a guarantor on a lease entered into by ACE Telecom for rental of its premises to an unrelated third party. The lease requires monthly payments of approximately $4,500. This guarantee would require the Company to make timely rental payments to the unrelated third party in the event ACE is unable to do so.

NOTE 5 –— RELATED PARTY TRANSACTIONS

As of December 31, 2002, the Company owed $1,643,395 to one of its shareholders. ~~During~~ During 2003, the Company made several payments to the shareholder in repayment of the loan and inadvertently overpaid him, resulting in a receivable of $271,123 from the shareholder as of December 31, 2003. The balances as of ~~June~~September 30, 2005 and December 31, 2004, were $9088,~~928~~812 and $59,534, respectively.

NOTE 6 — COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes net income (loss) and foreign currency translation adjustments, which are reported separately on the consolidated statements of stockholders’ equity in the Company Form 10-K.


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2005		2004			2005		2004
Net Income (Loss)	$	349,900	$	(877,181	)	$	217,862	$	(2,419,044	)

Foreign currency translation adjustment, net of tax		137,417		(1,500	)		318,574		44,922


Comprehensive income (loss)	$	487,317	$	(878,681	)	$	536,436	$	(2,374,122	)

F-8

TRICELL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

NOTE 6 – COMPREHENSIVE INCOME (LOSS)

	Three Months Ended						Six Months Ended
	June 30, 2005			June 30, 2004			June 30, 2005			June 30, 2004
Net Income (Loss)	$	(74,930	)	$	(1,063,617	)	$	(162,038	)	$	(1,541,863	)
Foreign currency translation adjustments, net of tax		108,994			(23,216	)		181,157			46,422
Comprehensive income (loss)	$	34,064		$	(1,086,833	)	$	19,119		$	(1,495,441	)

NOTE 7 — SEGMENT REPORTING

The Company has only one reportable segment.

Net sales to customers in excess of 10% of net sales approximated the following during the three months and ~~six~~nine months ended ~~June~~September 30, 2005 and 2004:

Three Months Ended June 30,			Six Months Ended June 30,
Three Months Ended September 30,				Nine Months Ended September 30,
2005	2004		~~2005~~	~~2004~~2005			2004
49%	43%		39%	21%
37%		35	%		36	%		14	%
33%	33%		26%	16%
15%		33	%		18	%		14	%
16%	15%		16%	12%
11%		20	%		—			11	%
-	-		13%	11%
—		—			—			11	%
-	-		-	10%
—		—			—			10	%

Net purchases from vendors in excess of 10% of total purchases approximated the following during the three months and nine months ended September 30, 2005 and 2004:


Three Months Ended September 30,				Nine Months Ended September 30,
2005	2004			2005			2004
10%		67	%		23	%		21	%
10%		11	%		13	%		14	%
—		—			—			13	%

Revenues from the United Kingdom and other countries were as follows during the three months and nine months ended September 30, 2005 and 2004:


	Three Months Ended September 30,
	2005		2004
UK	$	124,731,731	$	1,308,720


Spain		44,871,857		—
France		16,855,179		1,383,600
Belguim		11,126,539		—
Germany		—		1,304,223
Portugal		7,252,589		—
Austria		1,057,759		—

Total Other countries		81,163,923		2,687,823


Total	$	205,895,654	$	3,996,543

F-9

TRICELL, INC. AND SUBSIDIARIES


	Nine Months Ended September 30,
	2005		2004
UK	$	291,216,708	$	5,224,345


Spain		155,777,679		—
Germany		—		2,062,255
Denmark		—		1,787,653
Portugal		44,226,570		—
France		17,409,720		1,383,600
Netherlands		—		1,348,406
United Arab Emerates		—		372,541
Republic of Ireland		—		297,484
Luxemburg		—		296,165
Belguim		11,492,606		—
Austria		1,092,559		—
United States		714,014		—


Total Other countries		230,713,148		7,548,104


Total	$	521,929,856	$	12,772,449

~~NOTES~~The TOcompany ~~CONDENSED~~has ~~CONSOLIDATED~~no ~~FINANCIAL~~long-lived ~~STATEMENTS~~assets outside of the United Kingdom.

~~JUNE~~NOTE ~~30,~~8 ~~2005~~— RECENT ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretations No. 46, “Consolidation of Variable Interest Entities.” FIN No. 46 addresses consolidation by business enterprises of variable interest entities (~~Unaudited~~formerly special purpose entities or “SPEs”). The Company does not have any variable interest entities as defined by FIN No. 46.

~~NOTE~~In 7April 2003, —the ~~SEGMENT~~FASB ~~REPORTING~~issued ~~(CONTINUED)~~Statement No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities.” This statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under Statement No. 133, “Accounting for Derivatives Instruments and Hedging Activities.” The provisions of this statement are effective for all derivatives and hedging activities entered into after September 30, 2003. The Company does not expect SFAS No. 149 to have a material effect on its financial statements.

~~Net~~In ~~purchases~~May 2003, ~~from~~the ~~vendors~~FASB inissued ~~excess~~SFAS ofNo. 150 ~~10%~~“Accounting for Certain Financial Instruments with Characteristics of ~~total~~both ~~purchases~~Liabilities ~~approximated~~and ~~the~~Equity.” ~~following during~~SFAS No. 150 establishes standards on the classification ~~three~~and ~~months~~measurement of certain instruments with characteristics of both liabilities and ~~six~~equity. ~~months~~The ~~ended~~provisions ~~June~~of SFAS No. 30150 are effective for financial instruments entered into or modified after May 31, ~~2005~~2002 and ~~2004:~~to all other instruments that exist as of the beginning of the first interim financial reporting period beginning after September 15, 2003. The Company does not expect SFAS No. 150 to have a material effect on its financial statements.

Three Months Ended June 30,		Six Months Ended June 30,
2005	2004	2005	2004
47% 32% 17% -	44% 23% 12% -	39% 26% 13% 11%	21% 20% 15% 12%

Revenues from the United Kingdom and other countries were as follows during the three months and six months ended June 30, 2005 and 2004:

	Three Months Ended June 30,
	2005		2004
UK	$	111,037,238	$	53,438,722
Republic of Ireland		—		—
Germany		—		—
Spain		74,540,275		—
Portugal		34,928,646		2,098,259
United States		2,296		729,945
Total Other countries		109,471,217		2,828,204
Total	$	220,508,455	$	56,266,926

F-10

~~TRICELL,~~NOTE 9 — GOING ~~INC.~~CONCERN ~~AND SUBSIDIARIES~~CONSIDERATIONS

~~NOTES~~The TOaccompanying ~~CONDENSED~~condensed ~~CONSOLIDATED~~consolidated ~~FINANCIAL~~financial ~~STATEMENTS~~ statements have been presented assuming the continuity of the Company as a going concern. However, the Company has incurred substantial losses resulting in an accumulated deficit of $4,616,049 as of September 30, 2005. On January 28, 2005 two of the Company’s operating subsidiaries, Tricell UK LTD and Tricell International LTD. filed for bankruptcy in the United Kingdom. As a result of the bankruptcies, there are uncertainties regarding the realizable value of assets on a liquidation basis, the amount which will ultimately be paid to settle liabilities and operations as a result of the plan or reorganization. The uncertainties related to the bankruptcies, combined with a negative ratio of current assets to current liabilities and retained deficit in equity raise substantial doubts about the Company’s ability to continue as a going concern. Management plans with regards to this issue are as follows: Two of the Company’s subsidiaries filed for bankruptcy to protect their assets from creditors and because of the United Kingdom’s Customs and Excise Department’s policy of seizing and freezing claimed Value Added Tax refunds on mobile telephone export (see note 4). During the administration process the Company will remain in possession of their assets and properties, with the administrator operating their business and managing their assets. At the end of the administration management intends to regain all operational responsibilities. The Company has established a short-term financing arrangement for the purpose of funding purchases of product for resale (see note 3). This debt agreement will allow the Company to significantly increase sales through new sales sources and thereby increase necessary cash flow. Presently, the Company cannot ascertain the eventual success of management’s plans or the eventual outcome of a policy change by the United Kingdom’s Customs and Excise Department’s policy on Value Added Tax with any degree of certainty. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the eventual outcome of the risks and uncertainty described above.

JUNE 30, 2005

(Unaudited)

NOTE 7 — SEGMENT REPORTING (CONTINUED)

	Six Months Ended June 30,
	2005		2004
UK	$	165,009,628	$	3,915,625
Republic of Ireland		—		297,484
Denmark		—		1,787,653
Netherlands		—		1,348,406
Germany		—		758,033
Luxemburg		—		296,165
United Arab Emirates		—		372,541
United States		725,572		—
Portugal		75,228,099		—
Spain		37,329,981		—
Total Other countries		113,283,652		4,860,281
Total	$	278,293,280	$	8,775,906

The company has no long-lived assets outside of the United Kingdom.

NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretations No. 46, “Consolidation of Variable Interest Entities”. FIN No. 46 addresses consolidation by business enterprises of variable interest entities (formerly special purpose entities or “SPEs”). The Company does not have any variable interest entities as defined by FIN No. 46.

In April 2003, the FASB issued Statement No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities”. This statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under Statement No. 133, “Accounting for Derivatives Instruments and Hedging Activities.” The provisions of this statement are effective for all derivatives and hedging activities entered into after June 30, 2003. The Company does not expect SFAS No. 149 to have a material effect on its financial statements.

F-11

TRICELL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards on the classification and measurement of certain instruments with characteristics of both liabilities and equity. The provisions of SFAS No. 150 are effective for financial instruments entered into or modified after May 31, 2002 and to all other instruments that exist as of the beginning of the first interim financial reporting period beginning after June 15, 2003. The Company does not expect SFAS No. 150 to have a material effect on its financial statements.

NOTE 9 – GOING CONCERN CONSIDERATIONS

The accompanying condensed consolidated financial statements have been presented assuming the continuity of the Company as a going concern. However, the Company has incurred substantial losses resulting in an accumulated deficit of $4,881,019 as of June 30, 2005.

On January 28, 2005 two of the Company’s operating subsidiaries, Tricell UK LTD and Tricell International LTD. filed for bankruptcy in the United Kingdom. The subsidiaries represent a substantial portion of the Company’s operations. As a result of the bankruptcies, there are uncertainties regarding the realizable value of assets on a liquidation basis, the amount which will ultimately be paid to settle liabilities and operations as a result of the plan or reorganization. The uncertainties related to the bankruptcies, combined with a negative ratio of current assets to current liabilities and retained deficit in equity raise substantial doubts about the Company’s ability to continue as a going concern.

Management plans with regards to this issue are as follows:

The Company filed for bankruptcy to protect its assets from creditors and because of the United Kingdom’s Customs and Excise Department’s policy of seizing and freezing claimed Value Added Tax refunds on mobile telephone export (see note 4). During the administration process the Company will remain in possession of their assets and properties, with the administrator operating their business and managing their assets. At the end of the administration management intends to regain all operational responsibilities.

The Company has established a short-term financing arrangement for the purpose of funding purchases of product for resale (see note 3). This debt agreement will allow

F-12

TRICELL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

NOTE 9 – GOING CONCERN CONSIDERATIONS (CONTINUED)

the Company to significantly increase sales through new sales sources and thereby increasing necessary cash flow.

Presently, the Company cannot ascertain the eventual success of management’s plans or the eventual outcome of a policy change by the United Kingdom’s Customs and Excise Department’s policy on Value Added Tax with any degree of certainty. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the eventual outcome of the risks and uncertainty described above.

F-13

Item 2. Management’s Discussion And Analysis of Financial Condition and Results of Operation

Forward-looking Information

This information statement contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements relate to future events or to our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. There are a number of factors that could cause our actual results to differ materially from those indicated by such forward-looking statements.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Moreover, it does not assume responsibility for the accuracy and completeness of such forward-looking statements. The Company is under no duty to update any of the forward-looking statements after the date of this information statement to conform such statements to actual results. The foregoing management’s discussion and analysis should be read in conjunction with the Company’s financial statements and the notes herein.

Development

Our revenues increased significantly during the quarter and ~~six~~nine months ended ~~June~~September 30, 2005 as compared to the quarter and nine months ended ~~June~~September 30, 2004 as we restarted material trading operations in January 2005. We are optimistic that we will be able to continue this momentum throughout the ~~remainder~~fourth quarter of 2005 and ~~hope~~grow tofurther ~~soon~~in ~~achieve and exceed our 2002 revenue levels~~2006.

~~Our~~On ~~historic~~June 30, ~~method of trading operations involved funding capital requirements from revenues generated. However~~2005, ~~given~~we ~~the~~acquired ~~value~~Ace ~~added~~Telecom ~~tax~~Limited (“~~VAT~~Ace”) ~~issues~~in weexchange ~~have~~for ~~encountered,~~one ~~as more fully~~million ~~discussed below~~(1, ~~we recently altered our mode of operations by conducting operations via our subsidiary~~000,000) ~~Tricell~~shares ~~Distribution, and by executing a loan agreement, dated February 14, 2005, with Telco Invest Limited~~ (“~~Telco~~Shares”) ~~establishing a line~~ of ~~credit~~our ofcommon ~~$3,837,800~~stock. ~~Since~~The weacquisition ~~use our capital to effect a constant turnover~~ of ~~goods~~Ace, ~~and~~with ~~considering~~its ~~the amount of capital we have had~~extensive ~~frozen~~customer ~~with~~base in the ~~British~~telecommunications ~~Commissioners of Customs and Excise~~industry, ~~without~~has ~~this~~reinforced ~~loan~~our ~~agreement~~wholesale intrading ~~place~~and wedistribution ~~would~~business ~~not have been able to restart material trading operations as we did~~significantly.

Until 2004, we had financed our trading activities from cash flows from operating activities. However, given the value added tax (“VAT”) issues we have encountered, as more fully discussed below, we recently altered our mode of operations by conducting operations via our subsidiary, Tricell Distribution, which executed a loan agreement on February 14, 2005, with Telco Invest Ltd (“Telco”) establishing a line of credit of £2 million, or approximately $3,500,000. This line of credit agreement provides that upon Telco’s receipt of a written request from Tricell stating the quantity of units to be purchased, purchase price, sale price, expected gross profit, and the expected date of resale, Telco will decide whether or not to advance the Borrower the required sum up to the maximum amount. Telco retains discretion regarding whether or not to finance the Tricell’s proposed purchase. Repayment of the loan principal is due upon completion of the sale of the

inequipment, ~~January 2005.~~and ~~Additionally~~on that date, asTricell ~~consideration~~tenders ~~for~~to Telco 50% of the ~~Telco~~gross ~~line~~profit offrom ~~credit~~the equipment sale, wegross ~~have~~profit ~~agreed~~being defined as sales price less total topurchase aprice ~~funding~~excluding ~~charge~~applicable totaxes. beSince ~~paid~~we touse ~~Telco~~our ~~equal~~capital to ~~50%~~effect a constant turnover of ~~gross~~goods, ~~profit~~and ~~realized~~considering ~~from~~the amount of capital we have had frozen with the ~~trading~~British Commissioners ~~effected~~of ~~with~~Customs and Excise, without this ~~capital.~~loan ~~Andre~~agreement ~~Salt,~~in ~~our~~place ~~Chief~~we ~~Executive~~would ~~Officer,~~not ~~has~~have ~~divested~~been ~~his~~able ~~entire~~to ~~Telco~~restart ~~stock~~material ~~ownership~~trading ~~position,~~operations as we did in ~~addition~~January 2005. This operations change was always intended by management to ~~tendering~~be ~~his~~a ~~resignation~~short-term ~~from~~solution ~~Telco’s~~to ~~board~~the ofVAT ~~directors~~Issue. Since early October 2005, however, WeTelco ~~hope~~has tonot beforwarded ~~able~~any funds to ~~finance~~Tricell, ~~all~~despite ~~capital~~Tricell’s ~~trading~~requests. ~~operations~~Although ~~from~~we ~~revenue~~expect ~~created~~our revenues byto remain constant in the fourth quarter of 2005 ~~and~~without ~~thereafter~~the ~~cease~~use ~~utilizing~~of ~~the~~funds from Telco, because ~~line~~of the addition of ~~credit~~Ace’s revenues, aswe ~~the~~will ~~cost~~continue ofto ~~accessing~~seek funds from Telco and have been informed by Telco that funds will be forthcoming in the short-term. In the event Telco ~~line~~does ofnot provide ~~credit~~any isfurther ~~prohibitive~~funds, we believe that our revenues will remain consistent as a result of the Ace acquisition.

We ~~have~~rescinded ~~tentatively agreed to a mutual recission of~~ our July 15, 2004 acquisition of Discount Intranet Supply Channel Limited (“D-ISC”). Our decision to rescind stemmed from D-ISC’s poor revenues and high expenses. ~~We agreed to provide~~ D-ISC ~~with~~has been ~~20%~~notified of the ~~shares~~rescission. ~~they~~We ~~received~~notified inD-ISC ~~this acquisition,~~of orour ~~5.9 million~~decision ~~shares,~~to inrescind ~~exchange~~the ~~for~~acquisition without ~~their~~recompense ~~total~~to ~~release~~D-ISC, ~~which~~despite weour ~~expect~~earlier attempts to ~~be consummated~~negotiate noa ~~later~~mutually ~~than September 2005~~agreeable rescission.

On June 30, 2005, we acquired all of the outstanding common stock of Ace Telecom Limited (“Ace”) in exchange for one million (1,000,000) shares (“Shares”) of our common stock. The Company believes Ace, with its extensive customer base in the telecommunications industry, will reinforce the Company’s wholesale trading and distribution business.

Value-Added Tax (VAT)

Starting in ~~the~~ late ~~stages of~~ 2002 and continuing through 2003 and 2004, we experienced a sharp decline in our trading of mobile telephones and related accessories, and consequently our revenue. This decline was due almost entirely to a United Kingdom Tribunal’s change of the regulatory regime involving VAT recoverability following a petition of the British Customs and Excise regulators. The principle of the VAT in the United Kingdom involves the application to goods and services of a general tax, currently 17.5%, on consumption exactly proportional to the price of goods and services. On each sale and purchase of goods, VAT is calculated on the price of the goods and is chargeable after the deduction of the amount of VAT borne directly by the various cost components. In 2002, a United Kingdom Tribunal decided that product traders, such as Tricell, do not have a right to a refund of input VAT on goods which it then sold to companies outside the United Kingdom when there was a defaulting trader or a trader using a inappropriate VAT number in the chain of supply, even though the trader claiming the refund was in no way involved in, and had no knowledge of, the failure of the defaulting trader to fulfill its obligations. As a result of this policy, VAT refunds, to which we previously received on a monthly basis, were being frozen on order by HM Revenue & Customs. Since we use our capital to effect a constant turnover of goods, without VAT refunds again equal to 17.5% of revenue, we could not engage in operations at maximum efficiency.

In February 2005, the Advocate General of the United Kingdom (“AG”) overruled the United Kingdom Tribunal’s VAT interpretation, holding that VAT transactions are to be viewed as separate transactions, not one transaction encompassing numerous smaller transactions. VAT fraud concerns a series of consecutive activities, performed by a number of traders in a supply chain. It is an essential feature of the common system of VAT that VAT becomes chargeable on each transaction in a supply chain. The AG ruled that each transaction should be regarded on its

own merits, the character of a particular transaction in the chain cannot be altered by ~~earlier~~ earlier or subsequent events and misconduct by certain traders should not be allowed to penalize ~~traders~~ traders who were not involved in misconduct, but happened to be in the supply chain. This ~~interpretation~~ interpretation has allowed us to once more confidently seek a VAT refund. However, the change in ~~interpretation~~ interpretation will not be permanent until the decision is backed by the European Court of Justice (“ECJ”). We anticipate the ECJ will issue its ruling in late 2005 or early 2006.

Additionally, on January 28, 2005, we voluntarily requested that two of our wholly owned subsidiaries, Tricell UK Limited (“Tricell UK”) and Tricell International Limited (“Tricell Int”), both United Kingdom corporations, be placed into administration, which is the rough equivalent to Chapter 11 reorganization in the United States. We believe the likelihood of a new VAT regime allowing Tricell to once more claim its VAT refund will expedite the removal of our subsidiaries from administration. Further, Tricell intends to attempt to recoup the £ 800,000 English Pounds spent on the legal defense as related to VAT seizures as well as lost profits for the last 20 months in which our VAT refunds were denied.

Results of Operations

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2005 COMPARED TO THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2004

The following discussion should be read in conjunction with the audited financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2004. Comparisons made between reporting periods herein are for the ~~six~~nine month period ended ~~June~~ September 30, 2005 as compared to the same period in 2004.

We had a net ~~loss~~income of $74217,~~930~~862 for the ~~six~~nine months ended ~~June~~September 30, 2005 as compared to a net loss of $12,~~541~~419,~~863~~044 for the same period in 2004. Our sales revenue increased ~~materially~~by approximately 4050%, to $~~276~~516,~~775~~943,~~381~~168 for the ~~six~~nine months ended ~~June~~September 30, 2005 from $812,~~775~~772,~~906~~449 for the same period in 2004. The increase in sales revenue is due to our resumption of material business activities in the first quarter of 2005 while we awaited the outcome of a Customs & Excise ruling on the treatment of liability for Value-Added-Tax (“VAT”) upon intra-European transactions.

	2005			2004
	Nine months ended			Nine months ended Sep.
Net Income (Loss)	$	(74,930	)	$	(1,541,863	)
	Sep. 30, 2005			30, 2004
Sales Revenue	$	276,775,381		$	8,775,906
Net Income (Loss)	$	217,862		$	(2,419,044	)
Sales Revenue	$	516,943,168		$	12,772,449

~~Additionally,~~Our ~~our~~ selling, general and administrative expenses ~~decreased~~increased by 81%, to $13,~~216~~314,~~483~~235 for the ~~six~~ nine months ended ~~June~~September 30, 2005 from $12,~~989~~670,~~084~~479 for the same period in 2004. This ~~decrease~~increase is due to ~~cost~~to ~~savings~~an ~~methods~~increase wein ~~have~~sales ~~implemented~~through new sales sources. Our interest expense increased toby 953%, to $1,~~091~~483,~~406~~466 for the ~~six~~ nine months ended ~~June~~September 30, 2005 from $~~112~~155,~~204~~666 for the same period in 2004. This increase was primarily due to utilization of the Telco line of credit, and the interest accrued thereunder.

	Six months ended			Six months ended
	Nine months ended			Nine months ended
Expenses	~~June~~Sep. 30, 2005			~~June~~Sep. 30, ~~2005~~2004
Selling, General & Administrative Expenses	$	1,216,483		$	1,989,084
Selling, General & Admin. Expenses	$	3,314,235		$	2,670,479
Interest Expense	$	(1,~~091~~483,~~406~~466	)	$	~~(112~~155,~~204~~666	)
Total	$	24,~~307~~797,~~889~~701		$	12,~~101~~826,~~288~~145

THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2004

The following discussion should be read in conjunction with the audited financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2004. Comparisons made between reporting periods herein are for the three-month period ended ~~June~~ September 30, 2005 as compared to the same period in 2004.

We had a net ~~loss~~income of $74349,~~930~~900 for the quarter ended ~~June~~September 30, 2005 as compared to a net loss of $1877,~~063,617~~181 for the same quarter in 2004. Our sales revenue increased toby 6010%, to $~~220~~240,~~508~~167,~~445~~787 for the three months ended ~~June~~September 30, 2005 from $43,~~467~~996,~~745~~543 for the same period in 2004. The increase in sales revenue is due to our resumption of business activities in the first quarter of 2005 while we awaited the outcome of a Customs & Excise ruling on the treatment of liability for Value-Added-Tax (“VAT”) upon intra-European transactions.

	Three months ended			Three months ended
	June 30, 2005			June 30, 2004
	Sep. 30, 2005			Sep. 30, 2004
Net Income (Loss)	$	~~(74~~349,~~930~~900	)	$	(1877,~~063,617~~181	)
Sales Revenue	$	~~220~~240,~~508~~167,~~455~~787		$	43,~~467~~996,~~745~~543

Additionally, our selling, general and administrative expenses ~~decreased~~increased toby 3120%, to $~~651~~2,~~866~~127,752 for the three months ended ~~June~~September 30, 2005 from $1681,~~388,540~~935 for the same period in 2004. This increase is primarily due to ~~the~~our ~~implementation~~recommencement of ~~cost~~trading ~~savings~~activities ~~methods~~in January 2005. Our interest expense increased by 902%, to $~~847~~392,~~305~~040 for the three months ended ~~June~~September 30, 2005 from $6943,~~329~~462 for the same period in 2004. This increase was primarily due to utilization of the Telco line of credit.

	Three months ended		Three months ended
Expenses	~~June~~Sep. 30, 2005		~~June~~Sep. 30, 2004
Selling, General & Administrative Expenses	$	651,866	$	1,388,540
Selling, General & Admin. Expenses	$	2,127,752	$	681,935
Interest Expense	$	~~847~~392,~~305~~040	$	6943,~~329~~462
Total	$	2,519,792	$	686,937

Liquidity and Capital Resources

Our principal source of short term liquidity is operating cash flow and our line of credit with Telco Invest. A substantial decrease in revenues or our line of credit could impact the funds

from operating cash flow and jeopardize our ability to meet current obligations. Cash ~~provided~~used byin operating activities for the ~~six~~nine months ended ~~June~~September 30, 2005 was $~~566~~289,~~752~~376 as compared to cash ~~used~~ used in operating activities for the same period of 2004 of $~~245~~200,~~487~~960. ~~This~~Changes ~~change~~in iscash ~~mainly~~used in ~~attributable~~operating toactivities include an increase in accounts ~~receivable~~payable by 1072%, to $~~309~~8,~~859~~072,095 for the ~~six~~ nine months ended ~~June~~September 30, 2005, as compared to $80753,~~239~~901 for the same period in 2004, asan ~~well~~increase in asaccounts anreceivable ~~increase~~to ~~other~~$9,468,956 ~~receivables~~for the nine months ended September 30, 2005, from a decrease in accounts receivable of $~~110~~18,~~433~~375, and a decrease in VAT receivable from $1,382,817 for ~~2005~~the asnine months ~~compared~~ended September 30, 2004, to $03,714 for ~~2004~~the nine months ended September 30, 2005.

	Three months ended		Three months ended
	Nine months ended		Nine months ended
	June 30, 2005		June 30, 2004
	Sep. 30, 2005		Sep. 30, 2004
Cash Provided By (Used In) Operating Activities	$	566,752	$	(245,487	)
Cash Used In Operating Activities	$	289,376	$	200,960

Cash provided by investing activity ~~increased~~decreased to $~~821~~967,~~437~~618 for the ~~six~~nine months ended ~~June~~ September 30, 2005 as compared to $7,~~581~~635 for the same period in 2004. This increase is ~~primarily~~due ~~attributable~~ to a the ~~cash~~ ~~paid in the acquisition of Ace Telecom of~~ $1,~~090~~035,~~900~~294 received ~~for~~in the ~~six~~ACE ~~months~~Telecom ~~ending June 30, 2005, as compared to $0 for 2004~~acquisition.

	Three months ended		Three months ended
	Nine months ended		Nine months ended
	June 30, 2005		June 30, 2004
	Sep. 30, 2005		Sep. 30, 2004
Cash Provided by (Used In) Investing Activity	$	821,437	$	7,581
Cash Provided by Investing Activity	$	967,618	$	7,635

Cash ~~provided~~used byin financing activities was $55127,~~724~~628 for the ~~six~~nine months ended ~~June~~September 30, 2005 compared to cash provided by financing activities of $~~264~~208,~~583~~329 for the ~~three~~nine months ended ~~June~~ September 30, 2004. The decrease is primarily due to the repayment of loans to third parties of $098,350 for the ~~six~~nine months ended ~~June~~September 30, 2005, as compared to $~~274,689~~0 for 2004.

	Three months ended			Three months ended
	Nine months ended			Nine months ended
	June 30, 2005			June 30, 2004
	Sep. 30, 2005			Sep. 30, 2004
Cash Provided by (Used In) Financing Activity	$	55(127,~~724~~628	)	$	~~264~~208,~~583~~329

We believe we have sufficient cash, ~~together with our line of credit from Telco Invest,~~ to satisfy our operating requirements for twelve months. We have the ability to restrict our expenditures to the extent cash is not available to purchase our goods, which will then attempt to resell. We anticipate that our re-entry into the intra-European market as a result of the Customs & Excise ruling will continue to increase expenses and, if operations are successful, revenues. If the cash reserves are not enough to satisfy our operating needs and we are unable to generate revenues, we will ~~utilize~~sell ~~the~~additional ~~Telco~~shares ~~line~~ of ~~credit~~our equity ~~and/~~securities or ~~sell~~possibly ~~additional~~access ~~shares~~the ofTelco ~~our~~line ~~equity securities~~of credit to secure the cash required to conduct our business operations for the next twelve (12) months. During the next twelve months, we plan to offer key positions, which are currently vacant, to management personnel, including but not limited to the position of Chief Operating Officer.

Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structure finance or special purpose entities (“SPEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of ~~June~~September 30, 2005, we were not involved in any unconsolidated ~~SPE~~ SPE transactions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our major market risk is to changes in foreign currency exchange rates in the British Pound, which could impact our results of operations and financial condition. Foreign exchange risk arises from our exposure to fluctuations in foreign currency exchange rates because our reporting currency is the United States dollar. Management seeks to minimize the exposure to foreign currency fluctuations through natural internal offsets to the fullest extent possible. As of ~~June~~September 30, 2005, we had not engaged in any currency arbitrage or hedging activities, although we may in the future. Our debt is not subject to one measure of interest, therefore, the debt is somewhat ~~diversified~~ diversified against interest rate increases.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this quarterly report. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any legal proceedings and is unaware of any pending or threatened legal proceedings. However, we are involved in a dispute, which is nearing resolution, over how much VAT tax refund we are entitled to, as more fully described herein.

Additionally, the Company is in the process of negotiating with its former director, Tom Adams, a settlement regarding back pay claimed by Mr. Adams for services rendered.

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

On June 30, 2005, we issued 1,000,000 shares of our common stock (the “Shares”) pursuant to a Sale Agreement (the “Agreement”) with James Reed, Neil Pursell, Adrian Sumnall and Neil Proctor (the “Shareholders”) of Ace Telecom Limited (“Ace”). Pursuant to the Agreement, we acquired from the Shareholders all of the issued and outstanding capital stock of Ace with the Shareholders receiving the Shares in a pro rata manner. The securities, which were taken for investment and were subject to appropriate transfer restrictions, were issued without registration under the Securities Act upon the exemption provided in Section 4(2) of the Securities Act.

Item 4. Submission of Matters to A Vote of Security Holders

The registrant held its annual meeting of stockholders in Stoke-on-Trent, Staffordshire United Kingdom on June 21, 2005. The only matter submitted to a vote of shareholders was the election of directors. Each of the three nominees were elected, although two nominees, Paul Langley and Nicholas Topham, have not yet accepted their nominations, subject to our procurement of certain insurance policy(ies), which we expect obtain by the end of August 2005. The following sets forth the items that were submitted to a vote of the stockholders and the results thereof:

a) election of three directors, pending their acceptance of their directorship, each for a term of one year. The vote tabulation for each nominee was as follows:

NOMINEE

FOR

WITHHELD

ABSTENTION

BROKER NON VOTES

Paul Langley

48,041,250

Nicholas Topham

48,041,250

Andre Salt

48,041,250

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits beginning on page 11 of this Form 10-Q, which is incorporated herein by reference.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this ~~22nd~~21st day of ~~August~~ November, 2005.

Tricell, Inc. /s/ Andre Salt By: Andre Salt, Chief Executive Officer ~~and~~/s/ ~~Principal~~Neil Pursell By: Neil Pursell, Chief Financial Officer

INDEX TO EXHIBITS

EXHIBIT
NO.		DESCRIPTION
3(i)		Articles of Incorporation of the Company. (Incorporated by reference from the Company’s Form 10-SB12G, file number 000-50036, filed on October 11, 2002.)
3(ii)		Bylaws of the Company. (Incorporated by reference from the Company’s Form 10-SB12G, file number 000-50036, filed on October 11, 2002.)
10.1		Loan Agreement by and between Tricell Distribution Ltd. and Telco Invest Limited (Incorporated by reference from the Company’s Form 10-K, file number 000-50036, filed on June 10, 2005.)
10(i)		Loan Agreement by and between Tricell Distribution Ltd. and Telco Invest Limited (Incorporated by reference from the Company’s Form 10-K, file number 000-50036, filed on June 10, 2005.)
10.2		Sale Agreement by and between the Company and James Reed, Neil Pursell, Adrian Sumnall and Neil Proctor (Incorporated by reference from the Company’s Form 8-K, file number 000-50036, filed on July 7, 2005.)
10(ii)		Sale Agreement by and between the Company and James Reed, Neil Pursell, Adrian Sumnall and Neil Proctor (Incorporated by reference from the Company’s Form 8-K, file number 000-50036, filed on July 7, 2005.)
31(i)		Certification of Chief Executive Officer ~~and Principal Financial Officer~~ of Tricell, Inc. under Section 302 of the Sarbanes-Oxley Act of 2002.
32(i)		Certification of Chief Executive Officer and Principal Financial Officer of Tricell, Inc. pursuant to 18 U.S.C. §1350
31(ii)		Certification of Chief Financial Officer of Tricell, Inc. under Section 302 of the Sarbanes-Oxley Act of 2002.
32(i)		Certification of Chief Executive Officer of Tricell, Inc. pursuant to 18 U.S.C. §1350
32(ii)		Certification of Chief Financial Officer of Tricell, Inc. pursuant to 18 U.S.C. §1350

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