~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~WASHINGTON, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~WASHINGTON,~~FORM ~~D.C. 20549~~ 10-K

~~FORM~~ANNUAL ~~10-K~~ REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

~~ANNUAL~~EXCHANGE ~~REPORT~~ACT ~~PURSUANT~~OF TO1934 ~~SECTION~~FOR 13THE ORFISCAL ~~15(d)~~YEAR OFENDED ~~THE~~OCTOBER ~~SECURITIES~~31, 2011

~~EXCHANGE~~Commission ~~ACT~~File OFNo. 0-22636 ~~1934 FOR THE FISCAL YEAR ENDED OCTOBER 31, 2010~~

~~Commission~~SPOT ~~File~~MOBILE ~~No. 0-22636~~INTERNATIONAL LTD.

~~SPOT~~(Exact ~~MOBILE INTERNATIONAL~~name ~~LTD.~~of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)


Delaware	75-2461665
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4950 Yonge Street, Suite 904, North York, ON Canada	M2N 6K1
(Address of principal executive offices)	(Zip Code)

Delaware		75-2461665
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4950 Yonge Street, Suite 900, North York, Ontario		M2N 6K1
(Address of principal executive offices)		(Zip Code)

(416) 481-0718

(~~416) 229-9333~~Registrant’s telephone number, including area code)

~~(Registrant’s~~Securities ~~telephone~~registered ~~number,~~pursuant ~~including~~to ~~area code~~Section 12(b) of the Act: None

Securities registered pursuant to Section 12(bg) of the Act: ~~None~~Common Stock, par value $0.001 per share

~~Securities~~Indicate ~~registered~~by ~~pursuant~~check tomark ~~Section 12(g)~~if of the ~~Act:~~ ~~Common~~registrant ~~Stock~~is a well-known seasoned issuer, ~~par~~as ~~value~~defined ~~$0.001~~in ~~per~~Rule ~~share~~405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is anot ~~well-known~~required ~~seasoned~~to ~~issuer,~~file asreports ~~defined~~pursuant into ~~Rule~~Section 13 ~~405~~or Section 15(d) of the ~~Securities~~ Act. Yes ¨ No x

Indicate by check mark ifwhether the registrant is(1) has ~~not~~filed all reports required to ~~file~~be ~~reports~~filed ~~pursuant~~by to Section 13 or ~~Section~~ 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 ¨x No x ¨

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Web site, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section 13~~posted orpursuant ~~15(d)~~to ofRule ~~the~~405 ~~Securities~~of ~~Exchange~~Regulation ~~Act~~S-T (§232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2) has~~post ~~been subject to~~ such ~~filing requirements for the past 90 days~~files). Yes x¨ No ¨ x

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of ~~has~~delinquent ~~submitted~~filers ~~electronically~~pursuant ~~and~~to ~~posted~~Item 405 onof ~~its corporate~~Regulation S-K ~~Web~~is ~~site,~~not ifcontained ~~any~~herein, ~~every~~and ~~Interactive~~will ~~Data~~not ~~File required to~~ be ~~submitted~~contained, ~~and posted pursuant~~ to ~~Rule~~the ~~405~~best of ~~Regulation~~the ~~S-T~~registrant’s ~~(§232.405~~knowledge, ofin ~~this~~definitive ~~chapter)~~proxy ~~during~~or ~~the~~information ~~preceding~~statements 12incorporated ~~months~~by ~~(or~~reference ~~for~~in ~~such~~Part III ~~shorter~~of ~~period~~this ~~that~~Form 10-K ~~the~~or ~~registrant~~any ~~was required~~amendment to ~~submit~~this ~~and post such files)~~Form 10-K. ~~Yes~~ ¨ ~~No ¨~~

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent filers pursuant to Item 405 of Regulation S-K~~ is ~~not~~a ~~contained~~large ~~herein,~~accelerated ~~and will not be contained~~filer, toan ~~the~~accelerated ~~best of the registrant’s knowledge~~filed, ina ~~definitive~~non-accelerated ~~proxy~~filer or ~~information~~a ~~statements~~smaller ~~incorporated~~reporting bycompany ~~reference~~as defined in ~~Part~~Rule ~~III~~12b-2 of ~~this~~the ~~Form 10-K~~Exchange ~~or any amendment to this Form 10-K~~Act. ¨

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, an¨ ~~accelerated~~Accelerated filer~~, a~~ ~~non~~¨ Non-accelerated filer or¨ aSmaller ~~smaller~~ reporting company ~~as defined in Rule 12b-2 of the Exchange Act.~~ x

~~Large~~Indicate ~~accelerated~~by ~~filer~~check ¨mark ~~Accelerated~~whether ~~filer~~the ¨registrant ~~Non-accelerated~~is ~~filer~~a ¨shell ~~Smaller reporting~~ company x (Doas ~~not~~defined ~~check~~in ifRule a12b-2 ~~smaller~~of ~~reporting~~the ~~company~~Exchange Act). Yes ¨ No x

~~Indicate~~The byaggregate ~~check~~market ~~mark~~value ~~whether~~of the ~~registrant~~voting isand anon-voting ~~shell~~common ~~company~~equity (held by non-affiliates as ~~defined~~of inApril ~~Rule~~30, ~~12b-2~~2011, was approximately $9,946,222 as computed by reference to the average bid and ask price of the ~~Exchange~~common ~~Act). Yes ¨ No x~~stock as quoted on the OTC Pink Sheets on such date.

~~The aggregate~~As ~~market value~~ of ~~the~~March ~~voting and non-voting common equity held by non-affiliates as of April 30~~20, ~~2010~~2012, ~~was approximately $12,900,000 as computed by reference to~~ the ~~average~~number ~~bid~~of ~~and~~outstanding ~~ask~~shares ~~price~~ of ~~the~~ common stock, as$0.001 ~~quoted~~par onvalue ~~the~~per ~~OTC Bulletin~~share, ~~Board~~of onthe ~~such~~registrant ~~date.~~was 29,253,594.

AsDOCUMENTS ofINCORPORATED ~~January 31,~~BY ~~2011, the number of outstanding shares of common stock, $0.001 par value per share, of the registrant was 28,253,594.~~ REFERENCE

~~DOCUMENTS INCORPORATED BY REFERENCE~~ None.

~~Portions~~SPOT ofMOBILE ~~the~~INTERNATIONAL ~~definitive information statement of Spot Mobile International Ltd~~LTD. relating to the 2011 annual election of directors to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s 2010 fiscal year are incorporated by reference into Part III of this Form 10-K.

~~Table~~FORM ~~of Contents~~10-K

~~SPOT~~Fiscal ~~MOBILE~~Year ~~INTERNATIONAL~~Ended ~~LTD.~~October 31, 2011

~~FORM~~TABLE ~~10-K~~OF CONTENTS

Fiscal Year Ended October 31, 2010


Item Number in Form 10-K		Page
	PART I

ITEM 1.	BUSINESS	1

ITEM 1A.	RISK FACTORS	6

ITEM 1B.	UNRESOLVED STAFF COMMENTS	13

ITEM 2.	PROPERTIES	13

ITEM 3.	LEGAL PROCEEDINGS	13

ITEM 4.	MINE SAFETY DISCLOSURES	15

	PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	15

ITEM 6.	SELECTED FINANCIAL DATA	15

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	21

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	38

ITEM 9A.	CONTROLS AND PROCEDURES	38

ITEM 9B.	OTHER INFORMATION	40

	PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	40

ITEM 11.	EXECUTIVE COMPENSATION	44

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	45

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	46

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	46

	PART IV

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	48

~~TABLE~~This OFAnnual ~~CONTENTS~~Report on Form 10-K contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, and are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied in such forward-looking statements. See “Item 1A. Risk Factors.” Unless otherwise indicated in this Annual Report or the context otherwise requires, all references in this Current Report to “Spot Mobile,” the “Company,” “us,” “our” or “we” are to Spot Mobile International Ltd.

Item Number in Form 10-K		Page
	PART I
ITEM 1.	BUSINESS		1
ITEM 1A.	RISK FACTORS		9
ITEM 1B.	UNRESOLVED STAFF COMMENTS		15
ITEM 2.	PROPERTIES		15
ITEM 3.	LEGAL PROCEEDINGS		15
ITEM 4.	REMOVED AND RESERVED		16
	PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		16
ITEM 6.	SELECTED FINANCIAL DATA		17
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		17
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		21
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		21
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		39
ITEM 9A.	CONTROLS AND PROCEDURES		39
ITEM 9B.	OTHER INFORMATION		40
	PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		40
ITEM 11.	EXECUTIVE COMPENSATION		44
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		44
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		46
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES		46
	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		48

PART I

ITEM 1. BUSINESS

~~Table of Contents~~General

~~This~~Spot ~~Annual~~Mobile ~~Report~~International onLtd., ~~Form~~a ~~10-K~~Delaware ~~contains~~corporation ~~forward-looking~~formerly ~~statements~~known ~~within~~as ~~the~~Rapid ~~meaning~~Link, ~~of Section 27A~~Incorporated, ofis ~~the~~a ~~Securities~~telecommunications ~~Act~~services ofcompany ~~1933~~which, asthrough ~~amended~~its wholly-owned subsidiaries, ~~and~~provides ~~Section 21E~~prepaid oftelecommunication ~~the~~and ~~Securities~~transaction ~~Exchange~~based ~~Act~~point of ~~1934,~~sale ~~and~~activation ~~are~~solutions ~~subject~~through toover ~~risks,~~280 ~~uncertainties,~~independent ~~and~~retailers ~~other~~in ~~factors~~the ~~which~~Eastern ~~could~~United ~~cause~~States. Our ~~actual~~operations ~~results~~are toconducted ~~differ~~primarily ~~materially~~through ~~from~~our ~~those expressed~~wholly orowned ~~implied~~subsidiaries: inMr. ~~such~~Prepaid, ~~forward-looking statements~~Inc., ~~See~~a Florida corporation (“~~Item~~Mr. 1APrepaid”) and Spot Mobile Corp., ~~Risk~~a ~~Factors~~Florida corporation (“Spot Mobile Corp.”). Mr. ~~Unless~~Prepaid ~~otherwise~~operates ~~indicated~~as ina ~~this~~retail ~~Annual~~point ~~Report~~of orsale ~~the~~distributor ~~context~~of ~~otherwise~~prepaid ~~requires,~~wireless ~~all~~airtime. Spot ~~references~~Mobile inCorp. ~~this~~is ~~Current~~a ~~Report~~prepaid towireless ~~“Spot~~ Mobile,” ~~the~~ Virtual Network Operator (“~~Company,~~MVNO”) ~~“us~~that distributes and sells prepaid wireless handsets and SIM cards,” ~~“our”~~offering ortalk ~~“we”~~and ~~are~~text toservices ~~Spot~~for wireless subscribers. Our MVNO operates on the Global System for Mobile ~~International~~Communications ~~Ltd.~~(“GSM”) platform service.

~~PART~~The I Company’s principal executive offices are located at 4950 Yonge Street, Suite 904, North York, Ontario, Canada, M2N 6K1. The telephone number is (416) 481-0718.

~~ITEM 1. BUSINESS~~History

~~General~~The Company was incorporated on July 10, 1986 under the Company Act of the Province of British Columbia, Canada. On August 7, 1992, we renounced our original province of incorporation and elected to continue our domicile under the laws of the State of Wyoming, and on November 30, 1994, our name was changed to “Canmax Inc”. On February 1, 1999, we reincorporated under the laws of the State of Delaware under the name “ARDIS Telecom & Technologies, Inc”. On November 2, 1999, we acquired substantially all of the business and assets of Dial Thru International Corporation, a California corporation (the “DTI Acquisition”), and, on January 19, 2000, we changed our name from ARDIS Telecom & Technologies, Inc. to Dial Thru International Corporation. On November 1, 2005, we changed our name to Rapid Link, Incorporated (“Rapid Link”). Prior to the share exchange agreement transaction described in Note 1 of the financial statements incorporated herein, Rapid Link served as facilities-based, communications company providing various forms of voice and data services to customers around the world. Rapid Link provided a multitude of communication services targeted to small and medium sized businesses, as well as individual consumers. These services included the transmission of voice and data traffic over public and private networks. Rapid Link also provided foreign and domestic termination of voice traffic into the wholesale market. On June 7, 2010, Rapid Link changed its name to Spot Mobile International Ltd.

~~Spot~~Recent Mobile International Ltd., a Delaware corporation formerly known as Rapid Link, Incorporated, is a telecommunications services company which, through its wholly-owned subsidiaries, provides prepaid telecommunication and transaction based point of sale activation solutions through over 420 independent retailers in the Eastern United States. Our operations are conducted primarily through our wholly-owned subsidiaries: Mr. Prepaid, Inc., a Florida corporation (“Mr. Prepaid”) and Spot Mobile Corp., a Florida corporation (“Spot Mobile Corp.”). Mr. Prepaid operates as a retail point of sale distributor of prepaid wireless airtime. Spot Mobile Corp. is a prepaid wireless Mobile Virtual Network Operator (“MVNO”). We distribute and sell prepaid wireless handsets and SIM cards, offering talk, text and data services for wireless subscribers. Our MVNO operates on the Global System for Mobile Communications (“GSM”) platform service and can offer wireless service on the AT&T and T-Mobile networks. Developments

~~Spot~~On ~~Mobile’s~~June ~~principal~~6, ~~executive~~2011, ~~offices~~we ~~are~~received ~~located~~a atnotice ~~4950~~from ~~Yonge~~LV ~~Street~~Administrative Services, ~~Suite 900~~Inc., ~~North~~as ~~York~~administrative and collateral agent for Valens Offshore SPV II, ~~Ontario~~Corp., ~~M2N~~Valens ~~6K1~~U.S. ~~The~~SPV ~~telephone number~~I, isLLC, Laurus Master Fund, Ltd. (~~416~~In Liquidation) (collectively, the “Creditor Parties”) under that certain Master Security Agreement, dated February ~~229~~24, 2010, executed by the Company and Mr. Prepaid, our wholly-~~9333~~owned subsidiary, and a Secured Term Note, dated February 24, 2010, issued by the Company in favor of the Creditor Parties that we were in default under such loan documents for failure to pay scheduled interest payments and failure to provide certain financial reports. On July 12, 2011, we received further notice from the Creditor Parties regarding the acceleration of all amounts due under their senior secured note and demanding payment of $ 1,323,366. On July 15, 2011, the Creditor Parties filed a lawsuit against the Company and Mr. Prepaid in the Supreme Court of the State of New York seeking summary judgment due to our failure to pay the amounts due under the senior secured note and seeking to enforce their rights and remedies under our loan documents. On December 6, 2011, the trial court issued a judgment against Spot Mobile International, Ltd. in the amount of $1,323,366, which was the loan amount. Prior to the judgment and in connection with a proposed settlement of the dispute between the Creditor Parties and the Company, the Company delivered a good faith deposit in the amount of $200,000 in this matter, which was then turned over to the Court. The Court denied the Company’s request to allow its claims to proceed in that same case as a setoff of the loan amount, but granted leave to file the claim separately.

~~History~~ 1

~~The~~In ~~Company~~November ~~was incorporated on July 10~~2011, ~~1986~~John ~~under~~Jenkins ~~the~~(“Jenkins”) ~~Company~~filed ~~Act~~an ofaction against the ~~Province~~Company’s ~~of British Columbia~~directors, ~~Canada.~~as ~~On August 7~~individuals, ~~1992,~~in weU.S. ~~renounced~~District ~~our~~Court ~~original~~in ~~province of incorporation and elected to continue our domicile under~~ the ~~laws~~Central ofDistrict ~~the State~~ of ~~Wyoming,~~California. The ~~and~~Company onwas ~~November 30,~~not ~~1994,~~named ~~our~~as ~~name~~a ~~was~~defendant ~~changed~~in tothe ~~“Canmax Inc~~complaint.” This Onmatter ~~February 1,~~involves ~~1999,~~claims weby ~~reincorporated under~~ the ~~laws~~Company’s offormer ~~the~~Chairman ~~State~~and ofCEO ~~Delaware~~for ~~under~~alleged ~~the name~~intentional ~~“ARDIS~~interference ~~Telecom &~~with ~~Technologies~~contract, ~~Inc.”~~fraud Onand ~~November 2,~~unfair ~~1999,~~competition werelated ~~acquired~~to ~~substantially~~a ~~all~~share oflock-up ~~the~~agreement ~~business~~that ~~and~~was ~~assets~~executed ofbetween ~~Dial~~Jenkins ~~Thru~~and ~~International Corporation, a California corporation (~~the ~~“DTI~~Company ~~Acquisition”),~~in ~~and, on~~February ~~January 19,~~2010. Claimant ~~2000,~~seeks wethe ~~changed~~unrestricted ~~our~~ability ~~name~~to ~~from~~transfer/sell ~~ARDIS~~his ~~Telecom &~~equity ~~Technologies,~~shares ~~Inc.~~in tothe ~~Dial~~Company ~~Thru~~and ~~International~~unspecified ~~Corporation~~damages. An Onamended ~~November 1,~~complaint ~~2005,~~was wereceived ~~changed~~on ~~our~~January ~~name to Rapid Link~~19, ~~Incorporated (“Rapid Link”)~~2012. The ~~Prior~~Company’s todirectors believe the ~~share~~ ~~exchange~~lawsuit ~~agreement~~is ~~transaction~~without ~~described~~merit ~~below,~~and ~~Rapid~~on ~~Link~~February ~~served as a facilities-based~~15, ~~communications~~2012 ~~company~~we ~~providing~~filed ~~various~~a ~~forms~~defense ~~of voice~~ and ~~data~~a ~~services~~Motion to ~~customers~~Dismiss ~~around~~ the ~~world~~claim. ~~Rapid~~ No ~~Link~~provision ~~provided~~for aloss, ~~multitude~~if ~~of communication~~any, ~~services~~has ~~targeted~~been tomade ~~small~~in ~~and~~these ~~medium~~financial ~~sized~~statements ~~businesses,~~ as ~~well~~any asclaim ~~individual consumers. These services included the transmission of voice~~ and ~~data~~loss ~~traffic~~cannot ~~over~~be ~~public and private networks~~determined. ~~Rapid Link also provided foreign and domestic termination of voice traffic into the wholesale market. On June 7, 2010, Rapid Link changed its name to Spot Mobile International Ltd.~~

~~Recent~~On ~~Developments~~February 22, 2012, the Company filed a separate suit in U.S. District Court in the Southern District of New York to assert its counterclaim of damages against the Creditor Parties, a principal of the Creditor Parties and the Company’s former CEO. The complaint alleges, among other things, Breach of Contract, Breach of Fiduciary Duty and Fraud in the defendants’ actions leading up to, during and subsequent to, the 2009 reverse merger of Rapid Link, Blackbird and Mr. Prepaid. The Company is seeking no less than $3,000,000 in damages from the defendants in the lawsuit.

~~Initial~~As ~~Closing~~a ~~Under~~result ~~Share~~of ~~Exchange~~the ~~Agreement~~default on our senior secured note payable and the demand for the repayment of the note; and operating losses to date, we have a working capital deficiency of $6,619,000. We are not able to repay the senior secured note and we do not have sufficient cash to continue operations and are unable to raise necessary debt or equity without settling this matter with our senior secured lender.

OnAs ~~February 24~~of September 19, ~~2010~~2011, the Company ~~consummated~~therefore ~~the~~decided ~~initial~~to ~~closing~~suspend ~~under~~all aretail ~~Share~~distribution ~~Exchange~~operations ~~Agreement,~~pending ~~dated~~the ~~October 13,~~outcome ~~2009,~~of ~~as amended~~these bymatters anand ~~Amendment~~ to ~~Share~~evaluate ~~Exchange~~strategic ~~Agreement,~~alternatives. Our ~~dated January 21~~subsidiary, ~~2010~~Spot ~~(collectively,~~Mobile ~~the “Share Exchange Agreement”)~~Corp., bymade ~~and~~arrangements ~~among~~to ~~the~~obtain ~~Company,~~limited ~~Blackbird~~funding ~~Corporation~~while ~~(“Blackbird”),~~it ~~certain~~attempted ofto ~~our~~renegotiate ~~principal shareholders,~~new ~~certain~~carrier ~~principal~~and ~~shareholders~~network ofarrangements ~~Blackbird,~~ and ~~Mr. Prepaid,~~to ~~formerly~~evaluate aits ~~wholly-owned~~strategic ~~subsidiary of Blackbird~~plans.

~~Pursuant~~On September 16, 2011, Spot Mobile Corp., executed a Secured Promissory Note evidencing a revolving line of credit facility in the principal amount of up to $3,000,000 in favor of a third party lender (the ~~Share~~“Secured ~~Exchange~~Note”). The ~~Agreement~~lender is an affiliate of the counter-party to the $1,175,000 Blackbird debt assumed by the Company ~~acquired~~in ~~from~~October, ~~Blackbird~~2010. The ~~all~~principal ofamount under the ~~issued~~Secured ~~and~~Note ~~outstanding~~accrues ~~shares~~interest at the rate of ~~capital~~8.00% ~~stock~~per year. The principal amount of Mrthe Secured Note and all accrued interest is due on demand upon 30 days’ notice from the lender. ~~Prepaid~~ The inproceeds ~~exchange~~of the Secured Note was to be used to finance Spot Mobile Corp.’s needs for 10working capital. Of the $3,000,000 ~~shares~~face amount of the ~~Company’s~~ ~~newly-created~~Secured ~~Series~~Note, A$745,000 ~~Convertible~~had ~~Preferred~~been ~~Stock~~previously (funded to Spot Mobile Corp. by the ~~“Series~~lender, Aprimarily ~~Preferred~~in ~~Stock”)~~2011 for working capital needs. In Asconsideration aof ~~result~~these prior advances, Mrand in order to obtain additional funding from this lender, we provided security for Spot Mobile Corp. ~~Prepaid~~’s ~~became~~obligations. Accordingly, the obligations of Spot Mobile Corp. under the Secured Note are secured by a ~~wholly-owned~~security ~~subsidiary~~interest in all of the ~~Company.~~assets Mrof Spot Mobile Corp. ~~Prepaid~~ isas inwell as a pledge by the ~~business~~Company of ~~providing~~all ~~prepaid telecommunication~~of ~~and~~the ~~transaction~~capital ~~based~~stock ~~point~~ of ~~sale~~Spot ~~activation~~Mobile ~~solutions~~Corp. ~~through~~in ~~approximately~~favor ~~420~~of ~~independent~~the ~~retailers~~lender. Principal in the ~~Eastern~~amount ~~United~~of ~~States. Mr.~~$945,000 ~~Prepaid’s~~was ~~product~~outstanding ~~offering~~and ~~includes~~owed ~~prepaid~~to ~~wireless~~the ~~PINs~~lender ~~for~~under ~~use~~the ~~with~~Secured ~~various prepaid~~Note ~~mobile~~at ~~telephone~~October, ~~providers.~~31, 2011.

1On February 14, 2012, Spot Mobile Corp. finalized a new carrier and network agreement with T-Mobile USA, Inc. In anticipation of executing an agreement with the new carrier, and after negotiating a 180 day wind-down period with the old carrier, Spot Mobile Corp. terminated its existing carrier contract on February 9, 2012. It is anticipated that the new carrier arrangement will not be functional until the third fiscal quarter of 2012. To implement the new carrier agreement, Spot Mobile Corp. needed to secure further working capital commitments to finance its operations. Spot Mobile Corp. worked with the existing Secured Note lender to obtain additional necessary funding.

~~Table~~Concurrent with the signing of ~~Contents~~the new carrier agreement on February 14, 2012, Spot Mobile Corp, executed a Secured Convertible Note financing agreement (the “Convertible Notes”) in the principal amount of up to $2,000,000 in favor of an affiliate of the existing Secured Note lender. The Convertible Notes have a term of 24 months and outstanding principal is to accrue interest at the rate of 8.00% per year. Principal and interest owed under the Convertible Notes is convertible at any time into a combination of voting preferred and voting common shares of Spot Mobile Corp. at a conversion ratio to be fixed within 90 days of the issuance of the Convertible Notes based on the equity value of the Company measured just prior to the issuance of the Convertible Notes, as determined by an independent business valuation. Based upon the valuation, the Convertible Notes are convertible into equity constituting up to 95% of the capital stock of Spot Mobile Corp. Principal in the amount of $500,000 was outstanding and owed to the lender under the Secured Convertible Note at March 20, 2012.

The Series A Preferred Stock had certain rights and preferences, including full voting rights. In addition, the shares of Series A Preferred Stock issued to Blackbird upon the initial closing were convertible into 17,333,333 shares of common stock of the Company. As a result, on an as-converted basis, these 17,333,333 shares of common stock constituted approximately 80% of the Company’s then-issued and outstanding shares of common stock. The conversion of the Series A Preferred Stock issued to Blackbird was subject to the Company amending its certificate of incorporation to increase the amount of shares of common stock authorized to be issued by the Company to an amount sufficient to permit the conversion of all such shares of Series A Preferred Stock. As more fully described below, as of June 7, 2010, we amended our certificate of incorporation to, among other things, increase the amount of shares of our authorized capital stock. As of that date, all of the outstanding shares of our Series A Preferred Stock were converted into 17,333,333 shares of our common stock. In June 2010, Blackbird, which is in the process of liquidating and dissolving its operations, distributed the 17,333,333 shares of our common stock owned by Blackbird to its existing shareholders, on a pro rata basis. 2

~~Immediately~~The ~~following~~Secured ~~the~~Note ~~initial~~lender ~~closing,~~notified ~~the~~Spot ~~Company~~Mobile ~~transferred~~Corp. ~~all~~that ofas ~~the outstanding capital stock~~ of ~~its former~~February ~~wholly-owned subsidiaries~~14, ~~Telenational~~2012 ~~Communications,~~it ~~Inc.~~would ~~(“Telenational”)~~not ~~and~~provide ~~One~~additional ~~Ring~~debt ~~Networks,~~funding ~~Inc.~~under ~~(“One~~the ~~Ring”),~~terms toof athe ~~third~~Secured ~~party.~~Note Inand ~~connection~~that ~~with~~all ~~this~~future ~~transfer,~~funding ~~the~~only ~~transferee~~would ~~also~~be ~~assumed~~made under the ~~balance~~terms of the ~~indebtedness~~ ~~due~~Convertible toNote ~~the~~financing ~~Lenders~~agreement. Principal ~~(see~~in ~~“Assumption~~the amount of ~~Certain Senior Secured Indebtedness~~$1,”290,000 ~~below).~~was ~~The~~outstanding ~~transfer~~and ofowed ~~Telenational~~to ~~and~~the ~~One~~lender ~~Ring~~under ~~was~~the ~~without~~Secured ~~recourse~~Note orat ~~liability~~March to20, ~~the Company~~2012.

OnOur the terms and subject to the conditions set forth in the Share Exchange Agreement, at a subsequent closing, subject to the satisfaction of certain additional conditions including obtaining consents to transfer certain telecommunications licenses from the Federal Communication Commission and state regulatory authorities, Blackbird was to deliver to the Company all of the issued and outstanding shares of capital stock of all other Blackbird subsidiaries. At such subsequent closing, certain assets necessary to conduct the core business of Telenational were to be transferred to a wholly-owned subsidiary of the Company in exchange for the assumption by such transferee of $1.85 million of indebtedness owed to certain creditors. As more fully described below, as of June 7, 2010, the remaining portions of the Share Exchange Agreement yet to be performed have been terminated and, as a result, the subsequent closing was not completed. Business

InOur ~~connection~~current ~~with~~operations ~~the~~are ~~Share Exchange~~conducted ~~Agreement,~~through ~~Blackbird~~two ~~and~~wholly-owned ~~the Company entered into a management agreement on October 13~~subsidiaries, ~~2009,~~Mr. ~~pursuant~~Prepaid ~~to which representatives designated by Blackbird managed certain Telenational assets during the period between the execution of the Share Exchange Agreement~~ and ~~the~~Spot ~~closing.~~Mobile ~~Such Blackbird representatives were entitled to receive a management fee of $40,000 per month for such management services after Telenational’s accounts payable have been satisfied~~Corp. ~~This management agreement expired upon the initial closing under the Share Exchange Agreement.~~

~~Assumption~~Mr. Prepaid is a national provider of ~~Certain~~Point-of-Sale ~~Senior~~Activation ~~Secured~~(“POSA”) ~~Indebtedness~~ services and operates as a reseller and distributor of prepaid wireless airtime through POSA terminals. POSA is prepaid industry technology that provides the best customer products without the retailer having to invest in inventory. Our POSA terminals provide a total solution for prepaid wireless airtime retailers. We believe our primary advantage to our customers is that they can carry prepaid wireless airtime for most carriers. We have wholesale distribution to business locations including, but not limited to, gas stations, airport specialty stores, convenience stores, liquor stores, candy stores, card and gift stores and other similar types of retail outlets. Our Mr. Prepaid POSA terminals can be used with both credit cards and debit cards, and retail dealers can also accept cash.

~~Upon~~Spot ~~the~~Mobile ~~initial~~Corp. ~~closing~~is ~~under~~a ~~the~~nationwide ~~Share~~prepaid ~~Exchange~~wireless ~~Agreement~~MVNO. We ondistribute ~~February 24,~~and ~~2010~~sell prepaid wireless handsets and SIM cards, weoffering ~~assumed~~talk ~~certain~~and ~~senior~~text ~~secured indebtedness~~services ~~owed~~for towireless ~~certain~~subscribers. Our ~~lenders~~network ~~(“Lenders”)~~operates ~~including~~on ~~Valens~~the UGSM platform service.S. We ~~SPV~~sell Iour ~~(“Valens”)~~services ~~and~~wholesale ~~Valens~~to ~~Offshore~~Master ~~SPV~~Agents IIand ~~Corp.~~other ~~(“Valens~~distributors ~~II”).~~who ~~Pursuant~~sell directly to ~~new~~retail ~~loan documents~~consumers, ~~our~~and ~~outstanding~~we ~~indebtedness~~sell direct to ~~the~~consumers ~~Lenders~~through ~~was reduced~~our toSpot anMobile ~~aggregate~~website. Our ~~amount~~Master ofAgent $1channel reaches retail locations that include: convenience stores,~~250~~ non-traditional wireless stores,~~000.~~ ~~Pursuant~~boutique towireless astores, ~~Secured~~liquor ~~Term~~stores, ~~Note~~gas stations, ~~such~~airport ~~indebtedness~~specialty ~~began~~stores, tokiosks, ~~accrue~~bodegas, ~~interest~~ethnic atmarkets, ~~the~~flea ~~rate~~markets ofand 8large scale ethnic community events.~~00% per~~ We ~~year~~sell ~~with~~our ~~monthly~~airtime ~~payments~~plans ofat ~~interest~~a ~~having~~wholesale ~~commenced~~discount onto ~~March 1,~~our ~~2010~~distributors. We ~~The~~operate ~~principal amount~~our offacilities-based ~~the~~switches ~~Secured~~and ~~Term~~terminate ~~Note~~our isinternational ~~due~~calls, onwhich ~~February 28,~~allow ~~2013.~~us Into ~~addition,~~offer ~~Mr. Prepaid~~direct ~~executed~~international adialing ~~guaranty~~without ofan ~~our~~access ~~obligations~~fee ~~under~~at ~~the~~highly ~~Secured~~competitive ~~Term~~deeply ~~Note~~discounted prices. On ~~Finally~~September 19, 2011, the Company ~~and~~decided ~~Mr. Prepaid~~to ~~executed~~suspend aSpot ~~Master~~Mobile ~~Security~~Corp ~~Agreement~~retail ~~in favor~~distribution ofoperations pending the ~~Lenders~~outcome ~~pursuant~~of tocreditor ~~which~~litigation ~~our~~and ~~obligations~~its ~~under~~evaluation ~~the~~of ~~Secured~~strategic ~~Term~~alternatives. It ~~Note~~is ~~and~~anticipated ~~Mr. Prepaid’s~~that ~~obligations~~Spot ~~under~~Mobile ~~the~~Corp ~~Guaranty~~will ~~are~~resume ~~secured~~retail bydistribution aoperations ~~security~~once ~~interest~~the innew ~~all~~carrier ofand ~~our~~network ~~assets~~agreement is functional and ~~all~~once ofSpot Mobile Corp. is able to secure the ~~assets~~necessary offunds Mrto operate. ~~Prepaid.~~

~~Additional Financing~~ Services

OnWe ~~February 24~~currently offer comprehensive talk and text services, ~~2010~~direct dial international access as well as voicemail, caller ID, call waiting, call forwarding and 3-Way calling. Our services are prepaid and we ~~executed~~do anot ~~Convertible~~enter ~~Promissory~~into ~~Note~~contracts inwith our subscribers. We reduce the ~~principal~~barriers ~~amount~~to ofwireless ~~$500,000~~service inby ~~favor~~providing ofservice without requiring a ~~third~~social ~~party~~security ~~lender~~number, ~~(the~~bank ~~“Convertible~~information, ~~Note”).~~or ~~The~~credit ~~principal~~check. Customers ~~amount~~can ~~under~~establish ~~the Convertible~~service ~~Note~~by ~~will~~purchasing ~~begin~~a toSpot ~~accrue~~Mobile ~~interest~~Corp. onhandset ~~February 28,~~or ~~2011~~a atSpot ~~the~~Mobile ~~rate~~Corp. ofActivation 3Kit.~~00% per~~ Customers ~~year~~can ~~with~~purchase ~~quarterly~~refill ~~payments~~airtime in denominations of ~~interest~~$5, ~~commencing~~$10, on$20, ~~June 1~~$30, ~~2011~~and $50. Customers ~~The~~purchasing ~~principal~~a ~~amount~~Spot ofMobile ~~the~~Corp. ~~Convertible~~Activation ~~Note~~Kit iscan ~~due~~activate onany ~~December 31~~unlocked GSM handset, ~~2011.~~ ~~Prior~~including but not limited to ~~maturity~~iPhones, ~~the~~Blackberries ~~Convertible~~and ~~Note~~other ~~may~~GSM beSmartphones. Customers ~~converted~~can purchase handsets, atSIM ~~any~~cards, ~~time~~and additional airtime at ~~the~~retailer ~~option~~locations. Furthermore, ofadditional ~~the~~air ~~holder,~~time ~~into~~can ~~shares~~be ofpurchased at our ~~common~~website ~~stock~~or ~~based~~through onour an1-800 ~~initial~~customer ~~conversion~~service ~~rate~~line ofusing ~~$0.81~~an ~~per~~interactive ~~share.~~voice response system.

2Our standard prepaid plan is 10 cents per minute and 5 cents per text message. All standard plan airtime is good for 90 days. Additionally, we plan to offer Unlimited Talk & Text as well as Unlimited Talk, Text and Data plans.

~~Table~~Prepaid ofHandset, ~~Contents~~SIM Cards

~~Termination~~We ofsell ~~Share~~phone ~~Exchange~~handsets ~~Agreement~~and SIM cards branded under the name Spot Mobile. Our phone handsets and SIM cards operate on the GSM platform. Our phones only accept our prepaid SIM cards, while our SIM cards can be utilized with all GSM enabled phones.

As previously described, a subsequent closing under the Share Exchange Agreement was to occur subject to the satisfaction of certain additional conditions including obtaining consents to transfer certain telecommunications licenses from the Federal Communication Commission and state regulatory authorities. At such subsequent closing, Blackbird was to deliver to the Company all of the issued and outstanding shares of capital stock of all other Blackbird subsidiaries. Additionally, certain assets necessary to conduct the core business of Telenational, our former subsidiary, were to be transferred to a wholly-owned subsidiary of the Company in exchange for the assumption by such transferee of certain indebtedness. Distribution

On ~~June 7~~September 19, ~~2010~~2011, ~~Blackbird notified us that due to~~ the ~~inability~~Company ofdecided ~~certain conditions~~ to ~~the~~suspend ~~consummation~~Spot ofMobile ~~the~~Corp.’s ~~subsequent~~retail ~~closing~~distribution tooperations bepending ~~timely satisfied,~~ the ~~subsequent~~outcome ~~closing was incapable~~ of ~~being~~creditor ~~completed.~~litigation Asand ~~a result, Blackbird advised us that it was exercising~~ its ~~rights~~ toevaluation ~~terminate the remaining portions~~ of ~~the~~strategic ~~Share~~alternatives. It ~~Exchange~~is ~~Agreement~~anticipated ~~which~~that ~~had~~Spot ~~yet~~Mobile toCorp bewill ~~performed,~~resume ~~namely,~~retail ~~the~~distribution ~~subsequent~~operations ~~closing.~~once ~~Accordingly, as of June 7, 2010,~~ the ~~Share~~new ~~Exchange~~carrier ~~Agreement~~and ~~was~~network ~~terminated~~agreement ~~with~~is ~~no further force or effect~~functional. ~~We believe there are no further obligations in this regard.~~

~~Acquisition of Spot Mobile Corp.~~ 3

OnWe ~~June 7,~~primarily ~~2010,~~utilize ~~Blackbird~~the ~~transferred~~services ~~its~~of ~~wholly-owned~~master ~~subsidiary,~~distribution ~~Spot~~agents ~~Mobile~~(“Master ~~Corp.,~~Agents”) to ~~the~~establish ~~Company.~~our ~~This~~distribution ~~transfer~~network. In ~~was~~addition ~~contemplated~~ to ~~occur~~this ~~upon~~channel, ~~the~~we ~~subsequent~~use ~~closing of~~ the ~~Share~~Internet ~~Exchange~~and ~~Agreement.~~web Ascentric ~~described~~marketing ~~above,~~techniques. Our ~~the~~Master ~~Share~~Agent ~~Exchange~~channel ~~Agreement~~is ~~was~~a ~~terminated~~network as of ~~June 7~~Master Agents, ~~2010.~~sub-agents, ~~Notwithstanding~~jobbers and ~~such~~dealers ~~termination,~~(actual ~~Blackbird~~retail stores and ~~the~~locations) ~~Company~~that ~~agreed~~we have developed to simplify the ~~transfer~~distribution process and supply all of ~~Spot Mobile~~our ~~Corp.~~products ~~The~~into ~~acquisition~~the ofmarkets ~~Spot~~where ~~Mobile~~our ~~Corp~~strategic consumers shop. Our onMaster ~~June 7,~~Agents ~~2010~~typically ~~has~~have ~~been~~a ~~accounted~~national ~~for~~footprint asand areach ~~merger~~throughout ~~between~~the ~~companies~~domestic ~~under~~U.S. ~~common~~and ~~control~~territories. Our ~~The~~sub-agents ~~results~~provide ofa ~~operations~~more ofregionalized ~~Spot~~reach ~~Mobile~~in ~~Corp.~~areas ~~are~~and ~~included~~typically inreport ~~the~~through ~~results~~a ofMaster ~~the~~Agent ~~Company’s operations~~so ~~for~~they ~~all~~can ~~periods~~receive ~~presented~~a greater wholesale discount. Jobbers ~~The~~and ~~balance~~retailers ~~sheet~~are more localized and they usually have a specific area and established group of ~~the~~dealers ~~Company~~they ~~for~~sell ~~the~~to ~~year~~on ~~ended~~a ~~October 31,~~weekly ~~2009,~~and ~~has~~monthly ~~been~~basis. Their ~~retrospectively~~primary ~~adjusted~~purpose is to ~~eliminate~~keep the ~~intercompany~~shelves ~~accounts~~stocked ofwith ~~Spot~~our ~~Mobile~~product ~~Corp~~and manage any competitive threats., In ~~and~~our tocurrent ~~include~~distribution ~~inventory~~arrangement ofour ~~Spot~~Master ~~Mobile Corp.~~Agents ofwork ~~$209~~directly with sub-agents,~~000.~~ ~~Spot~~jobbers, ~~Mobile~~retailers ~~Corp.~~and ~~had~~dealers noto ~~other~~insure ~~operations~~that ~~during~~our ~~the~~products ~~year~~make ~~ended~~it ~~October 31,~~to ~~2009~~market to meet demand. All ~~Therefore,~~of nothe ~~other~~distribution ~~retrospective~~agents ~~adjustments~~within ~~are~~our ~~included~~channel specialize in ~~the~~distribution ~~Company’s~~to ~~financial~~retail ~~statements~~locations ~~for~~that ~~the~~include ~~period~~convenience ~~ended October 31~~stores, ~~2010.~~ ~~Revenues~~non-traditional ofwireless ~~$57~~stores,~~000~~ ~~and~~boutique ~~operating~~wireless ~~expenses~~stores, ~~and~~liquor ~~cost~~stores, ofgas ~~sales~~stations, ofbodegas, ~~$931~~ethnic markets,~~000~~ offlea ~~Spot~~markets ~~Mobile~~and ~~Corp~~large scale ethnic community events. Our ~~are~~distribution ~~included~~agents inhave ~~the~~been ~~Company’s~~distributing ~~consolidated~~products ~~financial~~through ~~statements~~these ~~for~~channels ~~the~~and ~~fiscal~~have ~~year~~deep ~~ended~~relationships ~~October 31,~~within ~~2010.~~their distribution networks.

~~Spot~~Our ~~Mobile~~web-based ~~Corp.~~distribution isconsists aof ~~mobile~~our ~~virtual~~own ~~network~~branded ~~operator~~Spot ~~(MVNO)~~Mobile ~~offering~~website, ~~principally~~ prepaid ~~mobile~~wireless ~~telephones.~~affiliates ~~Spot~~operating ~~Mobile~~as ~~Corp.~~prepaid ~~has recently~~wireless ~~completed~~retail ~~network~~resellers ~~development~~of handsets, ~~testing~~SIM cards and ~~market~~airtime, ~~analysis.~~and Weour ~~intend~~web-based tomarketing ~~commence~~techniques ~~full~~that ~~operations~~we ofanticipate ~~Spot~~using ~~Mobile~~to ~~Corp~~drive growth. Our ~~beginning~~own ~~with~~website offers all of our ~~Mr. Prepaid~~services ~~retail~~including ~~base~~airtime plans, handsets and ~~then~~SIM ~~through~~cards. Our ~~experienced~~affiliates ~~sales~~offer ~~agent~~refill ~~networks~~airtime, inselected ~~the~~handsets ~~second~~and ~~quarter of~~SIM ~~2011.~~card kits.

~~Amendments~~Sales toand ~~Our~~Marketing ~~Certificate~~- ofDistribution ~~Incorporation~~ Channels

OnSpot ~~June 7,~~Mobile ~~2010,~~Corp. ~~our~~sells ~~shareholders~~services ~~approved~~to ~~our~~strategic ~~amended~~consumer ~~and~~segments ~~restated~~that ~~certificate~~we ofhave ~~incorporation~~identified ~~which~~through ~~includes~~other ~~the~~previous ~~following~~prepaid ~~amendments:~~wireless ~~(i) an~~sales ~~amendment~~success, tosecondary ~~change~~research ~~our~~and ~~corporate~~sales ~~name~~trends toin ~~Spot Mobile~~the ~~International~~wireless ~~Ltd~~industry.; ~~(ii) an~~Our ~~amendment~~strategic tosegments ~~increase~~include the ~~number~~unbanked, ofcredit ~~authorized~~challenged, ~~shares~~bargain ofwireless ~~our~~shoppers, ~~common~~dissatisfied ~~stock~~postpaid ~~available~~users, ~~for~~immigrants ~~issuance~~requiring ~~from~~discounted ~~175,000,000~~international tocalling ~~1,000,000,000~~service ~~and~~ to ~~increase~~their ~~the~~country ~~number~~ of ~~authorized~~origin, ~~shares~~and offixed ~~our~~budget ~~preferred~~customers ~~stock available~~such ~~for~~as ~~issuance from 10~~teens,~~000,000~~ to“tweens” ~~100,000,000;~~ and ~~(iii) a~~fixed ~~restatement~~income ofseniors. Within our ~~certificate~~distribution ofchannel ~~incorporation~~we tohave ~~incorporate~~identified ~~all~~the ~~prior~~consumers ~~amendments,~~that ~~including~~live ~~those~~and ~~mentioned~~shop ~~above.~~in Inlocalized ~~this~~neighborhoods. These ~~respect,~~customers ~~effective~~typically ~~June 7,~~do ~~2010,~~not wehave ~~filed our amended and restated certificate of incorporation with~~ the ~~Secretary~~disposable ofincome ~~State~~or ofmeans ~~Delaware.~~to ~~Upon~~shop ~~the~~at ~~filing of~~ the ~~amended~~“big box” and ~~restated~~super ~~certificate~~retailer oflocations. More ~~incorporation,~~typically ~~all of the outstanding shares of~~ our ~~Series~~unbanked, Acredit-challenged ~~Convertible~~and ~~Preferred~~ethnic ~~Stock~~target ~~were automatically~~segments ~~converted~~shop ~~into~~in ~~520,000,000~~local ~~pre-split shares (17~~markets,~~333,333~~ ~~post-split~~bodegas ~~shares)~~and ofretail ~~our common stock~~locations.

~~Secured~~Our ~~Note~~business ~~Due~~strategy is to ~~Related Party~~reach these strategic consumer segments through our Master Agent channel as well as the Internet. Many of these customers are dissatisfied with confusing and expensive postpaid plans, as well as the lengthy contract terms and the expensive early termination fees required by the large carriers for postpaid plans. The postpaid plans these customers are migrating away from require additional fees for services such as International calling and also impose overage charges. Postpaid customers are also frustrated with confusing and complex fees and taxes which make the postpaid plans even more expensive. We believe our customers and all of these segments are also drawn to our service because they are more satisfied with the price and value we offer. We do not require a credit check or any term commitments, nor do we require a contract for service.

OnIn ~~June 14~~addition, ~~2010,~~customers wethat ~~issued~~have ~~1,333,333~~unlocked ~~shares~~GSM ofhandsets ~~our~~are ~~common~~drawn ~~stock~~to inour ~~satisfaction~~convenient ofprograms anbecause ~~aggregate~~they ofcan ~~$2,000,000 of~~establish ~~indebtedness~~service ofby ~~our~~simply ~~subsidiary,~~purchasing Mra SIM card. ~~Prepaid.~~ As ~~The~~more ~~issuance~~new ofgeneration smart phones are introduced into the ~~common~~market, ~~stock~~the ~~was~~first ~~made~~and insecond ~~reliance~~generation ~~upon~~smart ~~the~~phones ~~exemption~~are ~~from~~handed ~~registration~~down ~~provided~~to byfamily ~~Section 4(2)~~members ofand ~~the~~other ~~Securities~~less ~~Act~~affluent ofsegments ~~1933,~~that ascannot ~~amended~~afford (the ~~“Securities~~postpaid ~~Act”), or~~programs. These ~~Regulation~~customers Dcan ~~promulgated~~establish ~~thereunder.~~service with us by purchasing a SIM card.

3Based on our management team’s industry knowledge, we plan to achieve our objectives by executing our strategy to gain new prepaid wireless customers, and to displace existing wireless customers that are frustrated with their current carriers and postpaid plans by offering our plans, services, handsets and SIM cards.

~~Table~~Mr. Prepaid provides POSA terminals to the same channel and other retail locations allowing these retailers to offer prepaid airtime to almost any prepaid wireless carrier. The customers are part of ~~Contents~~the Master Agent channel, including convenience stores, liquor stores and gas stations. We currently carry refill airtime for all of the significant prepaid wireless carriers.

~~Private~~Intellectual ~~Placement of Common Stock~~ Property

InWe ~~July~~do ~~2010,~~not wehold ~~commenced~~any amaterial ~~private~~intellectual ~~placement~~property torights ~~“accredited~~nor ~~investors”~~do ofwe upexpect to ~~803,333 shares~~acquire ofany ~~our~~material ~~common~~intellectual ~~stock~~property ~~for~~rights ~~an aggregate purchase price of $1,205,000 ($1.50 per share of common stock). For each share subscribed for~~ in the ~~private~~near ~~placement, each investor also received a warrant to purchase one share of our common stock at $4~~future.50 per share and a warrant to purchase one share of our common stock at $2.70 per share. The issuance of the common stock and the warrants was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, or Regulation D promulgated thereunder.

~~Reverse Stock Split~~ 4

OnResearch ~~October 27, 2010, we filed an amendment to our certificate of incorporation to effect a reverse stock split of our common stock issued~~ and outstanding as of September 22, 2010, on the basis of one (1) post-split share for every thirty (30) pre-split shares of our Common Stock (the “Reverse Stock Split”). The Reverse Stock Split was intended to improve the marketability and liquidity of our common stock and encourage interest and trading in the common stock by increasing the price per share of our common stock and reducing the number of outstanding shares in order to make more shares available to the Company for future issuances. As a result of the Reverse Stock Split, the number of issued and outstanding shares of common stock was reduced from 724,500,000 pre-split to approximately 24,153,594 post-split. Throughout this Report, unless otherwise noted, all shares and per share amounts have been retroactively adjusted to give effect to the Reverse Stock Split. Development

~~Acquisition~~Our ofresearch ~~Telecommunications~~and ~~Switching~~development ~~Platform~~(“R&D”) efforts have been limited in scope. Our R&D efforts may in some cases involve market research to gauge consumer responses and purchasing habits. In such cases, we would engage a third party research firm to execute the R&D efforts. We have developed the systems required to utilize our switch and network to transport calls, control fraud and allow in-network international long distance calling at discounted prices.

~~Until~~Business October 29, 2010, Spot Mobile Corp. had an agreement to utilize a telecommunications switching platform (“technology assets” or “the platform”) in order to route its calls and in connection with its cellular business. The agreement was with, and the platform was owned by Yak America, Inc (“Yak”), an entity controlled by our CEO and majority shareholder. Spot Mobile Corp. incurred expense in 2010 of $40,000, related to the use of the platform. On October 29, 2010, we acquired these technology assets from Yak. These technology assets had an historical carrying cost to Yak of $1,175,000 and Spot Mobile Corp. acquired the technology assets in exchange for Spot Mobile Corp.’s assumption of certain secured indebtedness of Yak’s parent, Blackbird, in the amount of $1,175,000. We obtained a valuation of the technology assets by a third party that indicated there was no impairment of the historical carrying costs of the technology assets as of October 31, 2010. This switch has current capacity to route 75 million minutes each month and is scalable up to 250 million minutes each month. For the year ended October 31, 2010, Spot Mobile Corp. used 218,000 minutes. Spot Mobile Corp. plans to use the platform’s capacity to offer mobile virtual network services. Spot Mobile Corp. has entered into an agreement with Yak whereby Yak will be able to use any excess capacity not utilized by us. Strategy

WeOur ~~did~~core ~~not~~objective ~~acquire any~~is ofto ~~Yak’s~~expand ~~business~~our ~~operations~~product ~~related~~base towith the ~~technology~~offering ~~assets, including any customers or revenues, or any~~ of ~~Yak’s~~our ~~receivables,~~proprietary ~~payables~~Spot orMobile ~~employees~~prepaid ~~related~~cellular ~~to the technology assets acquired~~product. We ~~Effective~~intend ~~November 1, 2010, Yak will be entitled~~ to ~~use~~offer ~~the~~our ~~platform~~MVNO ~~until~~mobile ~~June 20,~~telephones ~~2012~~through ~~for~~both ~~a service fee equal to 8% of Yak’s net revenue from the use of the platform for its customers~~Mr. ~~Based upon Yak~~ Prepaid’s ~~historical~~distribution ~~use~~network ofand ~~the~~through ~~technology~~wholesale ~~assets, these service fees are not expected to be significant to our consolidated financial statements for the year ended October 31, 2011~~distributors.

~~Initial Closing of Private Offering of Units~~ Competition

OnIn ~~January 25,~~the ~~2011~~U.S., wethe ~~completed~~wireless ~~the~~market ~~initial~~is ~~closing~~dominated ofby anational ~~private~~wireless ~~placement~~service ~~(the “Private~~providers ~~Placement”)~~including ~~with~~AT&T, ~~approximately~~Sprint 30Nextel, ~~accredited~~Verizon ~~investors~~and ~~(the~~T-Mobile. In ~~“Investors”)~~addition, ~~pursuant~~in tomany ~~which~~markets wethere ~~sold~~are toregional ~~the~~wireless ~~Investors~~service anproviders, ~~aggregate~~such ofas 41U.S. ~~units~~Cellular, ~~(the~~MetroPCS ~~“Units”)~~and atLeap aWireless ~~purchase~~as ~~price~~well ofas ~~$50,000~~established ~~per~~large ~~Unit~~MVNO ~~(the “Unit~~operators ~~Price”).~~including ~~Each~~Boost, ~~Unit~~Tracfone, isVirgin ~~comprised~~Mobile, ofSimple ~~(i) 100~~Mobile,~~000~~ ~~shares~~and ofPage ~~our~~Plus. We ~~common~~expect ~~stock;~~competition ~~and~~to ~~(ii)~~ intensify as a ~~three-year~~result ~~warrant~~of tocontinuing ~~purchase~~increases ~~100~~in wireless market penetration levels,~~000~~ ~~shares~~the ofdevelopment ~~common~~and ~~stock~~deployment atof annew ~~exercise~~technologies, ~~price~~the introduction of ~~$0.75~~new ~~per~~products ~~share~~and services, ~~subject~~new tomarket ~~adjustment~~entrants, ~~for~~the ~~stock splits,~~availability ~~stock~~of ~~dividends~~additional spectrum, ~~recapitalizations~~both licensed and ~~similar~~unlicensed, ~~events~~and ~~(the~~regulatory ~~“Investor Warrants”)~~changes. Several Inhigher-speed ~~the~~wireless ~~initial~~technologies ~~closing,~~have webeen ~~sold~~deployed 41by ~~Units~~various ~~and~~wireless ~~received~~service ~~net~~providers, ~~proceeds~~while others are in the process of ~~approximately~~being ~~$1.8~~developed ~~million~~to ~~after~~meet ~~payment~~the ofgrowing ~~placement~~customer ~~agent~~appetite ~~fees~~for ~~and~~wireless ~~costs relating~~communications toin ~~the~~both ~~Private~~fixed ~~Placement~~and fully mobile environments. Wireless ~~Pursuant~~service toproviders ~~the~~are ~~terms~~in various stages of ~~the~~deploying ~~Private~~their ~~Placement~~own 3G networks, weand ~~may~~fourth ~~issue~~generation up(4G toLTE) antechnologies ~~additional~~are 39being ~~Units~~developed and deployed. In addition, ~~for~~some amunicipalities ~~total~~and 80communications ~~Units~~companies ~~(which~~have ~~the~~been ~~Company~~deploying ~~and~~networks ~~the~~of ~~placement~~small ~~agent~~Wi-Fi access points. Competition may inalso ~~their~~increase ~~sole~~if ~~discretion~~smaller, ~~increase~~stand-alone towireless ~~100~~service ~~Units),~~providers atmerge ~~a price~~or oftransfer ~~$50~~licenses to larger,~~000~~ ~~per~~better ~~Unit.~~capitalized ~~The~~and ~~net~~more ~~proceeds~~experienced ~~from~~wireless ~~the~~service ~~Private~~providers. We ~~Placement~~also ~~will~~compete bewith ~~used~~resellers tothat ~~fund~~buy ~~our~~bulk ~~ongoing~~wholesale ~~operations~~service ~~and~~from tofacilities-based ~~provide~~wireless ~~working~~service ~~capital.~~providers for resale.

InThe ~~consideration~~wireless ~~for~~industry ~~services~~also ~~rendered~~faces ascompetition ~~the~~from ~~placement~~other ~~agent~~communications inand ~~the~~technology ~~Private~~companies ~~Placement,~~seeking ~~upon~~to ~~the~~increase ~~initial~~their ~~closing,~~brand werecognition ~~paid~~and ~~the~~capture ~~placement~~customer ~~agent~~revenue ~~cash~~with ~~commissions~~respect ~~and~~to anthe ~~expense~~provision ~~allowance~~of ~~fee~~wireless ~~aggregating $191,500~~products and services. Other Inparticipants ~~addition,~~in asthe ~~consideration~~wireless ~~for~~value ~~services~~chain, ~~rendered~~including indata ~~connection~~application ~~with~~and ~~the~~content ~~Private~~providers ~~Placement~~and device manufacturers, atare ~~the~~introducing ~~final~~products ~~closing~~and ~~date~~services ofdirectly ~~the~~to ~~Private~~wireless ~~Placement~~consumers, werather ~~will~~than ~~sell~~through towireless ~~the~~service ~~placement~~providers, ~~agent~~in ~~(i) warrants~~order to ~~purchase~~compete 10more effectively for wireless data revenues. Also,~~000~~ ~~shares~~several ofdevice ~~common stock~~makers ~~for~~are ~~each~~making ~~Unit~~third-party ~~sold~~applications inand ~~the~~content ~~private~~available ~~placement~~by atbundling anthem ~~aggregate~~with ~~cost~~their ofproducts. For ~~$10~~example, Apple Inc.00 ~~(the~~is ~~“Placement~~packaging ~~Agent~~software ~~Warrants”),~~applications and ~~(ii) 10~~content with its phones,~~000~~ ~~warrants~~and ~~identical~~Google toInc. ~~those~~has ~~sold~~developed toan ~~Investors.~~open ~~The~~operating ~~Placement~~system ~~Agent~~and ~~Warrants~~related ~~will~~applications ~~have~~for amobile ~~term~~devices ofthat ~~five years~~has ~~and~~been ~~shall~~deployed beon ~~exercisable~~phones atthat $0certain other wireless service providers currently offer.60 ~~per~~In ~~share~~addition, ~~subject~~Google tois ~~adjustment~~selling ~~for~~its ~~stock~~own ~~splits,~~branded ~~stock~~phone ~~dividends,~~directly ~~recapitalizations~~to ~~and~~consumers ~~similar~~via ~~events~~its web store. Third ~~The~~parties, ~~Placement~~such ~~Agent~~as ~~Warrants~~Skype, ~~will~~are also ~~contain~~now ~~weighted~~offering ~~average~~alternative ~~anti-dilution~~means ~~protection,~~for ~~cashless exercise~~making ~~provisions~~wireless ~~and~~voice ~~“piggy-back”~~calls ~~registration~~that, ~~rights~~in ~~during~~certain ~~the~~cases, ~~lifetime~~can be used in lieu of the ~~Placement~~wireless ~~Agent~~provider’s ~~Warrants.~~voice service.

4Regulation of Products and Services

~~Table~~The U.S. Federal Communications Commission (“FCC”) has jurisdiction over our interstate telecommunications services and other matters under the Communications Act of ~~Contents~~1934, as amended (Communications Act). The Communications Act generally provides that we may not charge unjust or unreasonable rates, or engage in unreasonable discrimination when we are providing services as a common carrier, and regulates some of the rates, terms and conditions under which we provide certain services. The FCC also has adopted regulations governing various aspects of our business including: (i) use and disclosure of customer proprietary network information; (ii) telemarketing; (iii) assignment of telephone numbers to customers; (iv) provision to law enforcement agencies of the capability to obtain call identifying information and call content information from calls pursuant to lawful process; (v) accessibility of services and equipment to individuals with disabilities if readily achievable; (vi) interconnection with the networks of other carriers; and (vii) customers’ ability to keep (or “port”) their telephone numbers when switching to another carrier.

The ~~Units~~FCC ~~were~~regulates ~~offered~~the ~~and~~licensing, ~~sold~~construction, inoperation, ~~reliance~~acquisition ~~upon~~and ~~exemptions~~transfer ~~from~~of ~~registration~~Mobile ~~under~~Network ~~the Securities Act in reliance on Section 4~~Operator (2“MNO”) ofcommunications ~~the~~systems. ~~Securities~~The ~~Act~~FCC and ~~Rule~~Congress ~~506~~continuously ofconsider ~~Regulation~~changes Dto ~~promulgated~~these ~~thereunder,~~laws asand ~~transactions by an issuer not involving a public offering~~rules. Adoption ~~The~~of ~~subscription~~new ~~agreements~~laws ~~executed~~or inrules ~~connection~~may ~~with~~raise the ~~transactions~~ ~~disclosed~~cost ~~above~~of ~~contain~~providing ~~representations~~service ~~from~~or ~~the~~require ~~Investors~~modification toof ~~support~~ our ~~reasonable~~business ~~belief~~plans ~~that: (i) the Investors either received~~ or ~~had access to adequate information concerning the Company’s~~ operations. As ~~and financial condition in order to make~~ an ~~informed investment decision~~MVNO, ~~(ii) the~~we ~~Investors~~utilize ~~acquired~~other ~~the~~services ~~Units for their own account for investment purposes only and not with a view to the distribution thereof in the absence~~ of anMNOs ~~effective~~which ~~registration statement or an applicable exemption from registration, and (iii) the Investors~~ are ~~sophisticated~~dependent ~~within~~on the ~~meaning~~regulatory ofcompliance ~~Section 4(2)~~ of the ~~Securities Act and are “accredited investors” (as defined by Rule 501 under the Securities Act)~~MNO.

Neither the shares of common stock nor the Investor Warrants or Placement Agent Warrants, or the common stock issuable upon exercise thereof, have been registered under the Securities Act nor may any such securities be offered or sold absent registration or an applicable exemption from registration. The Company has agreed to file a registration statement with the Securities and Exchange Commission, within 90 days of the final closing of the Private Placement, covering the resale by the Investors of the shares of common stock issued in the Private Placement as well as the resale by the Investors and the placement agent of the shares of common stock issuable upon the exercise of the Investor Warrants and Placement Agent Warrants. Until this registration statement is declared effective by the SEC such shares of common stock may not be transferred or resold unless the transfer or resale is registered or unless exemptions from the registration requirements of the Securities Act and applicable state laws are available. 5

State public utility commissions also regulate our telephone operations with respect to certain telecommunications intrastate rates and services and other matters. Our ~~Business~~competitive local exchange carrier and long distance operations are generally classified as non-dominant and lightly regulated the same as other similarly situated carriers.

~~Our current operations are conducted exclusively through our wholly-owned subsidiaries, Mr. Prepaid and Spot Mobile Corp. and we have no other business operations.~~ Employees

~~Mr. Prepaid is~~As aof ~~national~~October ~~provider~~31, of2011, ~~Point-of-Sale~~we ~~Activation~~employed ~~(“POSA”)~~16 ~~services~~full-time and ~~operates~~part astime aemployees ~~reseller~~ and ~~distributor~~contract ~~of prepaid wireless airtime through POSA terminals~~personnel. Approximately ~~POSA~~four isof ~~prepaid industry technology that provides~~ the ~~best~~employees ~~customer products~~are ~~without~~management ~~the~~personnel, ~~retailer~~seven ~~having~~are ~~to invest~~ in ~~inventory.~~customer ~~Our~~service, ~~POSA~~four ~~terminals~~are ~~provide~~in anetwork ~~total~~management ~~solution~~and ~~for~~support, ~~prepaid~~and ~~wireless~~one ~~airtime~~is ~~retailers~~administrative. We ~~believe~~maintain ~~our~~a ~~primary~~satisfactory ~~advantage~~working torelationship with our ~~customers~~employees isand ~~that~~we ~~they can carry prepaid wireless airtime for most carriers. We~~ have ~~wholesale distribution to business locations including, but~~ not ~~limited~~experienced ~~to,~~any ~~gas~~labor ~~stations,~~disputes ~~airport~~or ~~specialty~~any ~~stores,~~difficulty ~~convenience~~in ~~stores,~~recruiting ~~liquor~~staff ~~stores,~~for ~~candy~~our ~~stores, card and gift stores and other similar types of retail outlets~~operations. ~~Our Mr. Prepaid POSA terminals can be used with both credit cards and debit cards, and retail dealers can also accept cash.~~

Spot Mobile Corp. is a nationwide prepaid wireless MVNO. We distribute and sell prepaid wireless handsets and SIM cards, offering talk, text and data services for wireless subscribers. Our network operates on the GSM platform service and can offer wireless service on the AT&T and T-Mobile networks. We sell our services wholesale to Master Agents and other distributors who sell directly to retail consumers, and we sell direct to consumers through our Spot Mobile website. Our Master Agent channel reaches retail locations that include: convenience stores, non-traditional wireless stores, boutique wireless stores, liquor stores, gas stations, airport specialty stores, kiosks, bodegas, ethnic markets, flea markets and large scale ethnic community events. We sell our airtime plans at a wholesale discount to our distributors. We operate our facilities-based switches and terminate our international calls, which allow us to offer direct international dialing without an access fee at highly competitive deeply discounted prices. Properties

WeThe doCompany’s ~~not~~subsidiary ~~hold~~currently ~~any material~~operates ~~intellectual~~from ~~property~~office ~~rights~~space ~~nor~~leased doby weYak ~~expect~~America Inc. and Cipher Networks Inc. at their monthly cost of approximately $5,000. Yak America Inc. and Cipher Networks Inc. are principally owned and controlled by Charles Zwebner, our chief executive officer. We also lease space from a third party to ~~acquire~~house ~~any~~our ~~material~~telecommunications ~~intellectual~~switch ~~property~~and ~~rights~~cross-connect inplatforms. This ~~the~~facility ~~near~~accommodates ~~future~~switches for many other carriers and provides ease of access within an environmentally controlled space with full back-up systems. Monthly cost is approximately $18,000.

~~Services~~ We believe that our existing facilities are suitable and adequate and that we have sufficient capacity to meet our current anticipated needs. These facilities are critical to our operations; however, suitable alternative premises can be made available in substantially all of the locations where we conduct business. We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and dispose of existing facilities. For a discussion of certain related party transactions concerning our leased office facility, see “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

WeItem ~~currently offer comprehensive talk and text services, direct dial international access as well as voicemail, caller ID, call waiting, call forwarding and 3-Way calling~~1A. RISK We are also able to offer data services. Our services are prepaid and we do not enter into contracts with our subscribers. We reduce the barriers to wireless service by providing service without requiring a social security number, bank information, or credit check. Customers can establish service by purchasing a Spot Mobile Corp. handset or a Spot Mobile Corp. Activation Kit. Spot Mobile Corp. sells service through Master Agents, sub-agents, and dealers. We distribute handsets, activations kits (SIM cards included) and point of sale materials into these distribution channels. Customers can purchase refill airtime in denominations of $5, $10, $20, $30, and $50. Customers FACTORS

5An investment in Spot Mobile involves significant risks. You should carefully consider the risks described below, together with all of the other information in this Annual Report. The risks and uncertainties described below are not the only risks that may have a material adverse effect on us. Additional risks and uncertainties also could adversely affect our business and our results. If any of the following risks actually occur, our business, financial condition or results of operations could be negatively affected and the market price for our shares could decline. Further, to the extent that any of the information contained in this Annual Report constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.

~~Table~~Risks ofRelated ~~Contents~~to our Business and Industry

~~purchasing~~We ahave ~~Spot~~incurred ~~Mobile~~substantial ~~Corp.~~losses ~~Activation~~in ~~Kit~~the ~~can~~past ~~activate~~and ~~any~~may ~~unlocked~~continue ~~GSM handset, including but not limited~~ to ~~iPhones,~~incur ~~Blackberries and other GSM Smartphones. Customers can purchase handsets, SIM cards, and~~ additional ~~air~~losses ~~time~~in atthe ~~retailer locations~~future. ~~Furthermore, additional air time can be purchased at our website, or through our 1-800 customer service line, or using an interactive voice response system.~~

~~Our~~The ~~standard~~Company ~~prepaid~~incurred ~~plan~~a isnet 10loss ~~cents~~of ~~per~~$4,535,715 ~~minute~~for the fiscal year ended October 31, 2011 as compared to a net loss of $3,560,414 for the prior fiscal year. The Company has an accumulated deficit of $11,099,005. The Company may incur additional losses as it attempts to develop and 5expand ~~cents~~its ~~per~~operations ~~text~~and ~~message~~to market and sell its products. No ~~All~~assurance ~~standard~~can ~~plan~~be ~~airtime~~given that the Company will achieve or sustain profitability. As a result of the Company’s limited operating history and the nature of the market in which it competes, it is ~~good~~difficult for 90the ~~days~~Company to forecast revenues or earnings accurately. ~~Additionally~~ No assurance can be given that the Company will be successful in accomplishing its goals or that it will generate sufficient revenue to become profitable or to sustain profitability. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we ~~plan~~may be unable to ~~offer~~continue ~~Unlimited~~our ~~Talk &~~business ~~Text~~and, as ~~well~~a asresult, ~~Unlimited~~we ~~Talk~~may be required to cease our business operations, ~~Text~~the ~~and~~result ~~Data~~of ~~plans.~~which would be that our stockholders would lose some or all of their investment.

~~Prepaid~~We ~~Handset~~may not be able to secure financing needed for future operating needs on acceptable terms, ~~SIM~~or ~~Cards~~ on any terms at all.

WeFrom ~~sell~~time ~~and~~to ~~distribute~~time, ~~smart~~we ~~phone~~may ~~handsets~~seek additional financing to provide the capital required to maintain or expand our operations and ~~SIM~~to ~~cards~~meet ~~branded~~our ~~under~~obligations ~~the~~to ~~name~~our ~~Spot~~senior ~~Mobile~~debt holders, if cash flow from operations is insufficient to do so. We ~~Our~~may ~~smart~~be ~~phone~~unable ~~handsets~~to ~~and SIM~~meet ~~cards~~our ~~operate~~obligations onto our senior debt holders. We cannot predict with certainty the ~~GSM~~timing ~~platform~~or account of any such capital requirements. If ~~Our~~such ~~smart~~financing ~~phones~~is ~~only~~not ~~accept~~available on satisfactory terms, we may be unable to maintain or expand our ~~prepaid~~business ~~SIM~~or ~~cards~~to develop new business at the rate desired, ~~while~~and our ~~SIM~~operating ~~cards~~results ~~can~~may suffer. If we are able to incur debt, we may be ~~utilized~~subject ~~with~~to ~~all~~certain ~~GSM~~restrictions ~~enabled~~imposed ~~phones~~by the terms of the debt and the repayment of such debt may limit our cash flow and our ability to grow. If we are unable to incur debt, we may be forced to issue additional equity, which could have a dilutive effect of the then current holders of equity.

~~Distribution~~ 6

We ~~primarily~~may ~~utilize~~not ~~the~~be ~~services~~successful of master distribution agents (“Master Agents”) to establish our distribution network. In addition to this channel, we use the Internet and web centric marketing techniques. Our Master Agent channel is a well established network of Master Agents, sub-agents, jobbers, detailers and dealers (actual retail stores and locations) that we have developed in ~~order~~developing ~~to simplify the distribution process and supply all of our products into the markets where our strategic consumers shop. Our Master Agents typically have~~ a national footprint and reach throughout the domestic U.S. and territories. Our sub-agents provide a more regionalized reach in areas and typically report through a Master Agent so they can receive a greater wholesale discount. Jobbers and detailers are more localized and they usually have a specific area and established group of dealers they sell to on a weekly and monthly basis. Their primary purpose is to keep the shelves stocked with our product and manage any competitive threats. In our current distribution arrangement our Master Agents work directly with sub-agents, jobbers, detailers and dealers to insure that our products make it to market tofor ~~meet demand. All of the distribution agents within~~ our channel specialize in distribution to retail locations that include convenience stores, non-traditional wireless stores, boutique wireless stores, liquor stores, gas stations, bodegas, ethnic markets, flea markets and large scale ethnic community events. Our distribution agents have been distributing products ~~through these channels and have deep relationships within their distribution networks~~.

Our ~~web-based~~business ~~distribution~~operations ~~consists~~and offinancial ~~our~~performance ~~own~~depends ~~branded~~on ~~Spot~~our ~~Mobile~~ability ~~website,~~to ~~prepaid~~develop ~~wireless~~distribution ~~affiliates~~channels ~~operating~~for asour ~~prepaid~~products. We ~~wireless retail~~expect ~~resellers~~the majority of ~~handsets,~~our ~~SIM~~products ~~cards~~will ~~and~~be ~~airtime,~~distributed ~~and~~through ~~our~~Master ~~web-based~~Agents ~~marketing~~with ~~techniques~~whom ~~that~~ we ~~anticipate~~negotiate ~~using~~sales tocommissions. The ~~drive~~competition ~~growth.~~for ~~Our~~distribution ~~own~~channels ~~website~~is ~~will~~intense ~~offer~~and ~~all~~is ofbased ~~our~~primarily ~~services~~upon ~~including~~quality ~~airtime~~of ~~plans~~product, ~~handsets~~availability of sufficient product and ~~SIM~~sales ~~cards~~commissions. There ~~Our~~can ~~affiliates~~be ~~will offer~~no ~~refill~~assurance ~~airtime,~~that ~~selected~~we ~~handsets~~will ~~and~~be ~~SIM~~successful ~~card~~in ~~kits.~~developing sufficient distribution channels.

~~Sales~~Our ~~and~~financial ~~Marketing~~performance -may ~~Distribution~~be ~~Channels~~harmed if unfavorable economic conditions adversely affect consumer spending.

~~Spot~~The ~~Mobile~~success ~~Corp.~~of ~~sells services through~~ our ~~distribution~~operations ~~channels~~depends to ~~strategic~~a ~~consumer~~significant ~~segments~~extent ~~that~~upon wea ~~have~~number ~~identified~~of ~~through~~factors ~~other previous~~relating ~~prepaid~~to ~~wireless~~discretionary ~~sales~~consumer ~~success~~spending, ~~secondary~~including ~~research~~economic ~~and~~conditions ~~sales~~affecting ~~trends~~disposable inconsumer ~~the~~income ~~wireless~~such ~~industry.~~as ~~Our strategic segments include the unbanked~~employment, ~~credit~~business ~~challenged~~conditions, ~~bargain~~taxation ~~wireless~~and ~~shoppers,~~interest ~~dissatisfied~~rates. Other ~~postpaid~~events ~~users,~~that ~~immigrants~~adversely ~~requiring discounted~~affect ~~international~~the ~~calling~~economy ~~service~~diminish tothe ~~their~~willingness ~~country~~ of ~~origin,~~consumers ~~and~~to ~~fixed~~purchase ~~budget~~nonessential ~~customers~~items, such as ~~teens,~~our ~~“tweens” and fixed income seniors~~products. There ~~Within~~can ~~our~~be ~~distribution~~no ~~channel~~assurance ~~we have identified the consumers~~ that ~~live~~consumer ~~and~~spending ~~shop~~will ~~in localized neighborhoods. These customers typically do~~ not ~~have~~be ~~the~~affected ~~disposable~~by ~~income~~adverse oreconomic ~~means~~conditions, tothereby ~~shop~~adversely ataffecting ~~the “big box” and super retailer locations. More typically~~ our ~~unbanked~~business, ~~credit-challenged~~financial ~~and~~condition ~~ethnic target segments shop in local markets, bodegas~~ and ~~retail~~results ~~locations.~~of operations.

We ~~expect~~face tocompetition ~~reach~~from ~~these~~many ~~strategic~~other ~~consumer~~types ~~segments through our Master Agent channel as well as the Internet. Many~~ of ~~these~~companies ~~customers are dissatisfied with confusing and expensive postpaid plans, as well as the lengthy contract terms and the expensive early termination fees required by the large carriers~~ for ~~postpaid plans. The postpaid plans these~~ customers ~~are migrating away from require additional fees for services such as International calling and also impose overage charges~~. Postpaid customers are also frustrated with confusing and complex fees and taxes which make the postpaid plans even more expensive. We believe our customers and all of these segments are also drawn to our service because they are more satisfied with the price and value we offer. We do not require a credit check or any term commitments, nor do we require a contract for service.

InThe ~~addition~~markets for our products and services are highly competitive, ~~customers~~and ~~that~~the ~~have~~recent ~~unlocked~~growth ~~GSM~~in ~~handsets~~these markets has encouraged the entry of many new competitors as well as increased competition from established companies. There are ~~drawn~~no significant barriers to ~~our~~entry ~~convenient programs~~in ~~because~~the ~~they~~industry ~~can~~in ~~establish~~which ~~service~~we byoperate. We ~~simply~~have ~~purchasing~~significant acompetitors ~~SIM~~and ~~card.~~may Asface ~~more~~increased competition from new ~~generation~~entrants ~~smart~~or ~~phones~~existing ~~are~~competitors ~~introduced~~who ~~into~~focus ~~the~~on market, ~~the~~segments ~~first~~currently served by us. These competitors include large and ~~second~~small ~~generation~~retailers, ~~smart~~wholesalers, ~~phones~~and international competitors. Many of these competitors are ~~handed~~larger ~~down~~and tohave ~~family~~significantly ~~members~~greater financial, marketing and other ~~less~~resources ~~affluent segments~~than we do. There can be no assurance that ~~cannot~~we ~~afford~~will ~~the~~be ~~postpaid~~able ~~programs~~to maintain or increase our market share in the future. Any ~~These~~failure ~~customers~~of ~~can~~our ~~establish~~business ~~service~~to ~~with~~compete ussuccessfully bywould ~~purchasing~~materially aand ~~SIM~~adversely ~~card.~~affect our financial condition and results of operations.

6We may not be able to respond in a timely and cost effective manner to changes in consumer preferences.

~~Table~~The products and services that our businesses offer are subject to changing consumer preferences. A shift in consumer preferences away from the products and services we offer could have a material adverse effect on our business, financial condition and results of ~~Contents~~operations. Our future success depends in part on our ability to anticipate and respond to changes in consumer preferences and there can be no assurance that we will respond in a timely or effective manner. Failure to anticipate and respond to changing consumer preferences could lead to, among other things, lower sales of our products and services, significant markdowns or write-offs of inventory, increased product returns and lower margins, which would have a material adverse effect on our business, financial condition and results of operations.

~~Based~~Our onbusiness ~~our~~would ~~management team’s industry knowledge, we should~~ be ~~able~~harmed toif ~~achieve~~ our ~~objectives~~ bythird ~~executing~~party ~~our~~manufacturers ~~strategy to gain new prepaid wireless customers,~~ and toservice ~~displace~~providers ~~existing wireless customers that~~ are ~~frustrated~~unable ~~with~~to ~~their~~deliver ~~current~~products ~~carriers~~or ~~and~~provide ~~postpaid~~services ~~plans~~in bya ~~offering~~timely ~~our plans, services, handsets~~ and ~~SIM~~cost ~~cards~~effective manner.

~~Mr. Prepaid~~Our ~~provides~~mobile ~~POSA~~telephone ~~terminals~~products toare manufactured by other companies, primarily in the ~~same~~Far ~~channel~~East. If ~~and~~our ~~other~~suppliers ~~retail~~are ~~locations~~unable, ~~allowing~~either ~~these~~temporarily ~~retailers~~or permanently, to ~~offer prepaid~~deliver ~~airtime~~products toin ~~almost~~a ~~any~~timely ~~prepaid~~and ~~wireless~~cost ~~carrier.~~effective ~~The~~manner, ~~customers~~it ~~are~~could ~~part~~have ofan ~~the~~adverse ~~Master~~impact ~~Agent~~on ~~channel~~our business, ~~including~~financial ~~convenience~~condition ~~stores~~and results of operations. It is critical that our product manufacturers produce high-quality, ~~liquor~~reasonably ~~stores~~priced ~~and~~products ~~gas~~in ~~stations~~a timely fashion. However, Webecause ~~currently~~our ~~carry~~primary ~~refill~~product ~~airtime~~manufacturers are foreign companies which require longer lead times for ~~all~~products, any delay in production or delivery would adversely affect sales of the ~~significant~~product ~~prepaid~~and ~~wireless carriers.~~our business, financial condition and results of operations.

~~Spot~~We ~~Mobile~~are ~~Corp.~~dependent ~~expects~~upon ~~to launch into~~ our ~~distribution~~Mobile ~~channel~~Network ~~with~~Operator ~~our~~(MNO) ~~master~~or ~~wholesale~~carriers ~~distributor~~to ~~and~~provide ~~several of~~access ~~its~~to ~~sub-agents. Over~~ the ~~next~~cellular ~~six~~networks toand ~~nine~~services ~~months,~~for ~~the~~billing ~~Company~~and ~~expects~~maintaining tocustomer ~~ramp~~balances. We upare toalso ~~over~~dependent ~~15,000~~upon ~~retail~~on ~~locations.~~our ~~Our~~own ~~initial~~network ~~launch~~to ~~will~~provide ~~be in Southern California~~switching, ~~Detroit~~routing, ~~Illinois and Atlanta~~billing, ~~Georgia.~~payment ~~Our Southern California launch will include locations as far south as San Diego~~systems, ~~east~~fraud tomonitoring ~~Palm Springs~~ and ~~San~~customer ~~Bernardino, and north to Central California~~service. Any ~~Our~~interruption ~~second~~or ~~phase~~failure ~~will include the top distributor~~ in ~~Puerto~~either ~~Rico.~~of Wethe ~~then~~MNO ~~expect~~or tocarrier ~~roll~~networks ~~out~~or toour ~~stores~~own innetwork ~~Texas~~for ~~(Houston~~any ~~and Dallas),~~reason ~~San~~could ~~Francisco,~~adversely ~~Louisiana,~~affect ~~New~~our ~~York,~~financial ~~New~~condition ~~Jersey,~~or ~~Boston,~~results ~~Chicago,~~of Stoperations. ~~Louis, Oregon, Washington, Nevada, Arizona and Florida.~~

~~Intellectual Property~~ 7

WeAlthough doSpot Mobile Corp. finalized a new carrier and network agreement on February 14, 2012, it is anticipated that the new carrier arrangement will not ~~hold~~be ~~any~~functional ~~material~~until ~~intellectual~~the ~~property~~third ~~rights~~fiscal ~~nor~~quarter doof we2012. ~~expect~~Additionally, to ~~acquire~~implement ~~any~~the ~~material~~new ~~intellectual~~carrier ~~property~~agreement, ~~rights~~Spot inMobile ~~the~~Corp. ~~near future~~requires further working capital commitments to finance its operations. There can be no assurances made that the new carrier arrangement will be implemented successfully.

~~Research~~Our ~~and~~financial ~~Development~~performance would be harmed if we suffer disruptions in our ability to fulfill orders.

Our ~~research~~ability to provide effective customer service, efficiently fulfill orders and ~~development~~distribute ~~(“R&D”)~~our ~~efforts~~products ~~have~~depends, ~~been~~to ~~limited~~a inlarge ~~scope~~degree, on the efficient and uninterrupted operation of the manufacturing and related distribution centers, and management information systems run by third parties and on the timely performance of other third parties such as shipping companies and the United States Postal Service. Any ~~Our~~material ~~R&D~~disruption ~~efforts~~or ~~may~~slowdown in ~~some~~our ~~cases~~manufacturing, ~~involve~~order ~~market~~processing ~~research~~or fulfillment systems resulting from strikes or labor disputes, telephone down times, electrical outages, mechanical problems, human error or accidents, fire, natural disasters, adverse weather conditions or comparable events could cause delays in our ability to ~~gauge~~receive ~~consumer~~and ~~responses~~distribute orders and ~~purchasing~~may ~~habits~~cause orders to be lost or to be shipped or delivered late. As ~~In such~~a ~~cases~~result, wecustomers may cancel orders or refuse to receive goods on account of late shipments that would ~~engage~~result in a ~~third~~reduction ~~party~~of ~~research~~net ~~firm~~sales toand ~~execute~~could ~~the~~mean ~~R&D~~increased ~~efforts.~~administrative Weand ~~have~~shipping ~~developed~~costs. Our ~~the~~success ~~systems~~depends ~~required~~in topart ~~utilize~~on our ~~switch~~maintaining high quality customer service and ~~network~~any failure to ~~transport~~do ~~calls,~~so ~~control~~could ~~fraud~~adversely ~~and~~affect ~~allow~~our ~~in-network~~business, ~~international~~financial ~~long~~condition ~~distance calling~~or atresults ~~discounted~~of ~~prices~~operations.

~~Business~~We ~~Strategy~~may experience merchandise returns or warranty claims in excess of our expectations.

~~Our~~We ~~core~~make ~~objective~~allowances isin toour ~~expand~~financial ~~both~~statements ~~our~~for ~~product~~anticipated ~~base~~merchandise ~~with~~returns ~~the~~and ~~offering~~warranty ofclaims ~~our~~based ~~proprietary~~on ~~Spot~~historical ~~Mobile~~return ~~prepaid~~rates. There ~~cellular~~can ~~product~~be no assurance that actual merchandise returns and ~~the~~warranty ~~market~~claims ~~for~~will not exceed our ~~products~~allowances. In byaddition, ~~increasing~~because our allowances are based on historical return rates, there can be no assurance that the ~~number~~introduction of ~~retailers~~new ~~which offer~~merchandise, ~~Mr. Prepaid’s~~changes ~~products.~~in Wethe ~~also~~merchandise ~~intend~~mix or other factors will not cause actual returns to ~~offer~~exceed ~~our~~return ~~mobile~~allowances. Any ~~virtual~~significant ~~network~~increase ~~operator~~in ~~(MVNO)~~merchandise ~~mobile~~returns ~~telephones~~and ~~through~~warranty ~~both~~claims, ~~Mr. Prepaid’s~~or ~~distribution~~merchandise ~~network~~returns and ~~through~~warranty ~~wholesale~~claims ~~distributors.~~that exceed our allowances, could adversely affect our business, financial condition and results of operations.

We ~~plan~~may tobe ~~achieve~~subject ~~our goal by pursuing both acquisition and organic expansion opportunities in selected markets~~ to ~~gain~~product ~~access~~liability ~~to products and services that enhance our offerings, add talent, gain customer recognition in key markets, and improve operational efficiency~~claims.

~~Competition~~The Company’s operations could be impacted by the both genuine and fictitious claims regarding the Company’s products. The Company could also suffer losses from a significant product liability judgment against it. A significant product liability judgment could also result in a loss of consumer confidence in the Company’s products and an actual or perceived loss of value of the Company’s brand, materially impacting consumer demand. Although the Company intends to carry product liability insurance, the amount of liability from product liability claims may exceed the amount of any insurance proceeds received by the Company.

InChanges ~~the U.S., the wireless market is dominated by national wireless service providers including AT&T, Sprint, Nextel, Verizon and T-Mobile. In addition,~~ in many markets there are regional wireless service providers, such as U.S. Cellular, MetroPCS and Leap Wireless. We expect competition to intensify as a result of continuing increases in wireless market penetration levels, the ~~development and deployment of new technologies, the introduction of new products and services, new market entrants, the availability of additional spectrum, both licensed and unlicensed, and~~ regulatory ~~changes.~~framework ~~Several~~under ~~higher-speed~~which ~~wireless~~we ~~technologies~~operate ~~have~~could ~~been~~adversely ~~deployed~~affect byour ~~various~~business ~~wireless~~prospects ~~service~~or ~~providers,~~results ~~while others are in the process~~ of ~~being developed to meet the growing customer appetite for wireless communications in both fixed and fully mobile environments~~operations. Wireless service providers are in various stages of deploying their own 3G networks, and fourth generation (4G LTE) technologies are being developed and deployed. In addition, some municipalities and communications companies have been deploying networks of small Wi-Fi access points. Competition may also increase if smaller, stand-alone wireless service providers merge or transfer licenses to larger, better capitalized and more experienced wireless service providers. We also compete with resellers that buy bulk wholesale service from facilities-based wireless service providers for resale.

7Our domestic operations are subject to regulation by the FCC and other federal, state and local agencies, and our international operations are regulated by various foreign governments and international bodies. These regulatory regimes frequently restrict our ability to operate in or provide specified products or services in designated areas, require that we maintain licenses for our operations and conduct our operations in accordance with prescribed standards. We are frequently involved in regulatory proceedings related to the application of these requirements. It is impossible to predict with any certainty the outcome of pending federal and state regulatory proceedings relating to our provision of retail or wholesale services, or the reviews by federal or state courts of regulatory rulings. Unless we are able to obtain appropriate relief, existing laws and regulations may inhibit our ability to expand our business and introduce new products and services.

~~Table~~Similarly, we cannot guarantee that we will be successful at obtaining the licenses, if required, to carry out our business strategy or in maintaining our existing licenses. The loss of, ~~Contents~~or a material limitation on, certain of our licenses could have a material adverse effect on our wireless business, results of operations and financial condition.

The ~~wireless~~adoption ~~industry~~of ~~also~~new ~~faces~~laws ~~competition~~or ~~from~~regulations ~~other~~or ~~communications~~changes ~~and technology companies seeking~~ to ~~increase their brand recognition and capture customer revenue with respect to~~ the ~~provision~~existing ofregulatory ~~wireless~~framework ~~products~~at ~~and services. Other participants in~~ the ~~wireless~~federal ~~value~~or ~~chain,~~state ~~including~~level ~~data~~could application and content providers and device manufacturers, are introducing products and services directly to wireless consumers, rather than through wireless service providers, in order to compete more effectively for wireless data revenues. Also, several device makers are making third-party applications and content available by bundling them with their products. For example, Apple Inc. is packaging software applications and content with its phones, and Google Inc. has developed an open operating system and related applications for mobile devices that has been deployed on phones that certain other wireless service providers currently offer. In addition, in January 2010, Google began selling its own branded phone directly to consumers via its web store. Third parties, such as Skype, are also ~~now~~adversely ~~offering~~affect ~~alternative~~our ~~means~~business ~~for making wireless voice calls that, in certain cases, can be used in lieu of the wireless provider’s voice service~~plans.

~~Prepaid~~Unforeseen ~~wireless~~new ~~service~~regulations iscould arestrict ~~fast~~the ~~growing~~ways ~~service segment~~ in ~~the~~which ~~wireless~~we ~~industry.~~can ~~Currently,~~manage ~~two~~our ~~out~~wire ofline ~~three~~and ~~customers~~wireless ~~that~~networks, ~~sign~~impose ~~up for~~additional ~~new~~costs, ~~service~~impair ~~choose~~revenue aopportunities, ~~prepaid~~and ~~program.~~potentially ~~International~~impede ~~Data~~our ~~Corporation~~ability ~~(IDC)~~to ~~reports~~provide ~~that~~services ~~there~~in ~~are~~a ~~currently~~manner ~~290 million~~that ~~wireless~~would ~~users~~be inattractive ~~the~~to ~~U.S.~~us ~~This~~and ~~represents~~our ~~95% market penetration~~customers. If ~~IDC~~new ~~also~~rules ~~reports~~are adopted that ~~customers~~limit ~~with~~our ~~prepaid~~flexibility ~~wireless service~~in ~~represent~~managing ~~22%~~our networks ofand ~~this market~~delivering services, ~~which~~these ~~amounts~~rules tocould ~~approximately~~have ~~64 million~~a ~~users.~~significant ~~IDC~~adverse ~~projects~~effect ~~that~~on byour business, ~~2015~~restrict ~~prepaid~~our ~~wireless~~ability ~~customers~~to ~~will~~compete ~~represent~~in ~~55% of~~ the ~~wireless~~marketplace ~~customers,~~and anlimit ~~estimated~~the ~~160 million~~return ~~users.~~we ~~According~~can toexpect ~~Prepaid Press, this represents an average of 19 million users migrating~~ to ~~prepaid~~achieve ~~accounts~~on ~~over~~past ~~the~~and ~~next~~future 5investments ~~years.~~in our networks.

~~We believe that our GSM network products are in more demand than competing CDMA products and we expect that this will enable us to increase market penetration.~~ 8

~~Regulation~~Our offailure ~~Products~~to retain and ~~Services~~attract qualified personnel could harm our business.

The ~~U.S.~~Company’s ~~Federal~~success ~~Communications Commission~~depends ~~(“FCC”)~~on ~~has jurisdiction over our interstate telecommunications services and other matters under~~ the ~~Communications~~Company’s ~~Act~~ability ofto ~~1934~~attract, astrain ~~amended~~and ~~(Communications~~retain ~~Act)~~qualified personnel. Competition ~~The~~for ~~Communications~~qualified ~~Act~~personnel ~~generally~~is ~~provides~~intense ~~that~~and wethe Company may not ~~charge unjust~~be orable ~~unreasonable~~to ~~rates,~~hire orsufficient ~~engage~~personnel into ~~unreasonable~~achieve ~~discrimination~~the ~~when~~Company’s wegoals ~~are~~or ~~providing~~support ~~services~~the asanticipated agrowth ~~common~~in ~~carrier, and regulates some of~~ the ~~rates,~~Company’s ~~terms and conditions under which we provide certain services~~business. The ~~FCC~~market ~~also~~for ~~has~~the ~~adopted regulations~~personnel ~~governing~~the ~~various~~Company ~~aspects~~requires ofis ~~our~~competitive. If business including: (i) use and disclosure of customer proprietary network information; (ii) telemarketing; (iii) assignment of telephone numbers to customers; (iv) provision to law enforcement agencies of the ~~capability~~Company tofails ~~obtain call identifying information and call content information from calls pursuant~~ to ~~lawful~~attract ~~process; (v) accessibility of services~~ and ~~equipment~~retain toqualified ~~individuals~~personnel, ~~with disabilities if readily achievable; (vi) interconnection with~~ the ~~networks of other carriers; and (vii) customers~~Company’s ~~ability~~business towill ~~keep (or “port”) their telephone numbers when switching to another carrier~~suffer.

~~The FCC regulates the licensing~~Additionally, ~~construction,~~companies ~~operation,~~whose ~~acquisition~~employees ~~and~~accept ~~transfer~~positions ofwith ~~Mobile~~competitors ~~Network~~often ~~Operator~~claim ~~(“MNO”) communications~~that ~~systems.~~such ~~The~~competitors ~~FCC~~have ~~and~~engaged ~~Congress~~in ~~continuously~~unfair ~~consider~~hiring ~~changes to these laws and rules~~practices. The ~~Adoption~~Company ofmay ~~new~~receive ~~laws~~such orclaims ~~rules~~in ~~may raise~~ the ~~cost~~future ofas ~~providing~~the ~~service~~Company orseeks ~~require~~to ~~modification~~hire ofqualified ~~our business plans or operations~~employees. The AsCompany ancould ~~MVNO,~~incur ~~we utilize~~substantial ~~other~~costs ~~services~~in ofdefending ~~MNOs~~against ~~which~~any ~~are~~such ~~dependent on the regulatory compliance of the MNO~~claims.

~~State~~The ~~public~~Company ~~utility~~does ~~commissions also~~not ~~regulate~~have ~~our~~a ~~telephone~~permanent ~~operations~~Chief ~~with~~Financial ~~respect to certain telecommunications intrastate rates and services and other matters~~Officer. ~~Our competitive local exchange carrier and long distance operations are generally classified as non-dominant and lightly regulated the same as other similarly situated carriers.~~

~~Employees~~The Company’s Chief Financial Officer resigned in October, 2011 and given the financial constraints surrounding the business and the litigation against the business, we are finding it difficult to recruit a replacement. In the interim our Chairman and CEO is serving as Interim Chief Financial Officer. Additionally, the Company acknowledges that there are material weaknesses in its disclosure controls and procedures as well as its internal control over financial reporting.

AsThe ofCompany ~~January 31,~~has ~~2011,~~been weunable ~~employed~~to 20obtain ~~full-time~~corporate ~~employees~~liability and ~~contract~~property ~~personnel~~insurance. Approximately seven of the employees are management personnel, four are in customer service, four are in network management and support, and five are staff members. We maintain a satisfactory working relationship with our employees and we have not experienced any labor disputes or any difficulty in recruiting staff for our operations.

~~Properties~~Due to the poor financial condition of the Company, we have been unable to obtain corporate liability and property insurance coverage. Significant claims could pose a further risk to our ability to operate as a going concern.

~~Our~~We ~~principal~~may ~~executive~~have ~~offices~~difficulty ~~are~~managing ~~located~~any atfuture ~~4950 Yonge Street, Suite 900, North York, Ontario M2N 6K1~~growth. Our subsidiaries operate from approximately 5,000 square feet of office space at 300 - 71st Street, Miami Beach, Florida 33141 at a cost of approximately $7,000 per month. Our subsidiaries operate their technology assets at a data center facility located at 50 NE 9th Street, Miami, Florida at a monthly cost of approximately $15,000. This facility accommodates switches for many other carriers and provides ease of access within an environmentally controlled space with full back-up systems.

8To implement the Company’s business objectives, it may need to grow rapidly in the future and the Company expects that such growth would lead to increased responsibility for both existing and new management personnel. To help manage future growth effectively the Company must maintain and enhance its financial and accounting systems and controls, hire and integrate new personnel and manage expanded operations. The growth in business, headcount and relationships with customers and other third parties is expected to place a significant strain on the Company’s management systems and resources. The Company will need to continue to improve its operational, managerial and financial controls, reporting systems and procedures, and will need to continue to expand, train and manage its work force. The Company’s failure to manage its future growth successfully would have a material adverse effect on the quality of its products and technology, its ability to retain customers and key personnel and its operating results and financial condition.

~~Table~~Risks Related To Ownership of ~~Contents~~our Common Stock

WeThere ~~believe~~is ~~that~~a ~~our~~limited ~~existing~~market facilities are suitable and adequate and that we have sufficient capacity to meet our current anticipated needs. These facilities are critical to our operations; however, suitable alternative premises can be made available in substantially all of the locations where we conduct business. We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and dispose of existing facilities. For a discussion of certain related party transactions concerning our ~~leased office facility, see “Item 13~~securities. ~~Certain Relationships and Related Transactions, and Director Independence.”~~

~~ITEM~~There 1Ais a limited trading market for our common stock. There ~~RISK~~can ~~FACTORS~~be no assurances that an established trading market will develop for our common stock in the future. Such a market, if it does develop for our common stock, could be subject to extreme price and volume fluctuations. In the absence of an active trading market:

An- investors investment in Spot Mobile involves significant risks. You should carefully consider the risks described below, together with all of the other information in this Annual Report. The risks and uncertainties described below are not the only risks that may have adifficulty ~~material adverse~~buying ~~effect on us. Additional risks~~ and ~~uncertainties~~selling ~~also could adversely affect our business and our results. If any of the following risks actually occur, our business, financial condition~~ or ~~results~~obtaining ~~of operations could be negatively affected and the~~ market price for our shares could decline. Further, to the extent that any of the information contained in this Annual Report constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us. quotations;

~~Risks~~- market ~~Related~~visibility tofor our ~~Business~~common ~~and~~stock ~~Industry~~may be limited; and

We- a ~~have~~lack ~~incurred~~of ~~substantial~~visibility ~~losses~~for ~~in the~~our ~~past~~common ~~and~~stock may ~~continue~~have toa ~~incur~~depressive ~~additional~~effect ~~losses~~on in the ~~future.~~market price for our common stock.

The ~~Company~~OTC ~~incurred~~Pink aSheets ~~net~~is ~~loss of $(3,560,414) for the fiscal year ended October 31, 2010 as compared to a net loss of $(712,601) for the prior fiscal year. The Company has~~ an ~~accumulated deficit of $(6,563,290). The Company may incur additional losses as it attempts to develop and expand its operations and to market and sell its products. No assurance can be given that~~ over-the-counter ~~Company will achieve or sustain profitability. As a result of the Company’s limited operating history and the nature of the~~ market ~~in which it competes, it is difficult for the Company to forecast revenues or earnings accurately. No assurance can be given~~ that ~~the~~provides ~~Company~~significantly ~~will~~less beliquidity ~~successful~~than inother ~~accomplishing~~established ~~its~~exchanges ~~goals~~ or ~~that it will generate sufficient revenue to become profitable or to sustain profitability~~Nasdaq.

Our ~~independent~~shares ~~auditors~~of ~~have~~common ~~included~~stock aare ~~going~~quoted ~~concern~~on ~~paragraph~~the inOver-the-Counter ~~their~~Pink ~~audit~~Sheets ~~opinion~~Board onwhich ~~our~~provides ~~consolidated financial~~less ~~statements~~liquidity ~~for~~than other established markets or exchanges. The sale of shares could have a depressing effect on the ~~year~~market ~~ended~~price ~~October~~if ~~31,~~a ~~2010~~market develops. Sales ~~The~~of ~~consolidated~~substantial ~~financial~~amounts ~~statements~~of doour ~~not~~common ~~include~~stock, ~~any~~or ~~adjustments~~the perception that such sales might ~~result~~occur, ~~from~~could ~~the~~adversely ~~outcome~~affect prevailing market prices of ~~this~~our ~~uncertainty.~~common stock.

~~We may not be able to secure financing needed for future operating needs on acceptable terms, or on any terms at all.~~ 9

~~From~~Our ~~time~~common tostock ~~time,~~is weconsidered ~~may seek additional financing~~ to ~~provide~~be ~~the~~a ~~capital~~“penny ~~required~~stock” ~~to maintain or expand our operations~~ and ~~to meet our obligations to our senior debt holders~~, ~~if cash flow from operations is insufficient to do so. We may be unable to meet our obligations to our senior debt holders~~ as ~~they mature. We cannot predict with certainty the timing or account of any~~ such ~~capital requirements. If such financing is not available on satisfactory terms~~, ~~we may be unable to maintain or expand our business or to develop new business at~~ the ~~rate~~market ~~desired,~~for ~~and~~ our ~~operating~~common ~~results~~stock may ~~suffer. If we are able to incur debt, we may~~ be ~~subject~~further tolimited ~~certain restrictions imposed~~ by ~~the~~certain ~~terms~~SEC ofrules ~~the~~applicable ~~debt and the repayment of such debt may limit our cash flow and our ability~~ to ~~grow.~~penny ~~If we are unable to incur debt, we may be forced to issue additional equity, which could have a dilutive effect of the then current holders of equity~~stocks.

WeTo ~~may~~the ~~not~~extent the price of our common stock remains below $5.00 per share or we have a net tangible assets of $2,000,000 ($5,000,000 if we are deemed to be ~~successful~~in continuous business for less than three years) or less, our common shares will be subject to certain “penny stock” rules promulgated by the SEC. Those rules impose certain sales practice requirements on brokers who sell penny stock to persons other than established customers and accredited investors (generally institutions with assets in ~~developing~~excess of $5,000,000 or individuals with net worth in excess of $1,000,000). For transactions covered by the penny stock rules, the broker must make a ~~market~~special suitability determination for the purchaser and receive the purchaser's written consent to the transaction prior to the sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices and disclosure of the compensation to the brokerage firm and disclosure of the sales person. These rules and regulations adversely affect the ability of brokers to sell our ~~products~~common shares and limit the liquidity of our securities.

~~Our~~We ~~business~~do ~~operations~~not ~~and~~intend ~~financial performance depends on our ability~~ to ~~develop~~pay ~~distribution~~any ~~channels~~dividends ~~for~~on our ~~products.~~ Wecommon ~~expect~~stock the majority of our products will be distributed through master agents with whom we negotiate sales commissions. The competition for distribution channels is intense and is based primarily upon quality of product, availability of sufficient product and sales commissions. There can be no assurance that we will be successful in ~~developing~~the ~~sufficient~~foreseeable ~~distribution channels~~future.

~~Our~~We ~~financial~~currently ~~performance~~intend ~~may~~to beretain ~~harmed~~all future earnings, if ~~unfavorable~~any, ~~economic~~to ~~conditions~~finance ~~adversely~~our ~~affect~~current ~~consumer~~and ~~spending~~proposed business activities and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We may also incur indebtedness in the future that may prohibit or effectively restrict the payment of cash dividends on our common stock.

~~The~~We ~~success~~are ofsubject ~~our operations depends~~ to athe ~~significant~~ongoing ~~extent~~requirements ~~upon~~of aSection ~~number~~404 of ~~factors~~the ~~relating~~Sarbanes-Oxley toAct ~~discretionary consumer spending, including economic conditions affecting disposable consumer income such as employment, business conditions, taxation~~ and ~~interest~~have ~~rates.~~determined ~~Other events~~ that ~~adversely affect the economy diminish the willingness of consumers to purchase nonessential items, such as~~ our ~~products.~~disclosure ~~There~~controls ~~can~~and beprocedures noand ~~assurance~~internal ~~that~~controls ~~consumer~~over ~~spending will not be affected by adverse economic conditions, thereby adversely affecting our business,~~ financial ~~condition~~reporting ~~and~~are ~~results of operations~~deficient.

9We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which requires that we document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures. During the course of our ongoing evaluation and integration of the internal controls of our business, we identified areas requiring improvement, and we will need to design enhanced processes and controls to address issues identified through this review. If we continue to be unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected.

~~Table~~We believe that the out-of-pocket ~~Contents~~costs, the diversion of management’s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected. As of October 31, 2011, our management has concluded that our disclosure controls and procedures were ineffective due to certain material weakness in internal controls over financial reporting including: (i) not maintaining sufficient personnel with clearly delineated and fully documented responsibilities and with an appropriate level of accounting expertise; (ii) insufficient documented procedures to identify and prepare a conclusion on matters involving material accounting issues; and (iii) lack of effective entity level controls at our subsidiaries. Although the Company has taken limited steps to address these weaknesses, we cannot be certain at this time that we will be able to successfully remediate these weaknesses which may require us to report one or more material weaknesses in connection with the presentation of our financial statements in the future. Material weaknesses in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

We ~~face~~are ~~competition~~dependent ~~from~~on ~~many~~the ~~other~~services ~~types~~ of ~~companies~~key ~~for customers~~personnel.

~~The~~Our ~~markets~~success ~~for~~depends ~~our~~to ~~products~~a ~~and~~significant ~~services~~extent ~~are~~upon ~~highly~~the ~~competitive~~continued service of our senior management, ~~and~~including ~~the~~Charles ~~recent~~Zwebner, ~~growth~~our inChairman ~~these~~and ~~markets~~Chief ~~has~~Executive ~~encouraged~~Officer, ~~the~~and ~~entry~~Jeffrey ofKapner, ~~many new~~President ~~competitors~~of asour ~~well~~subsidiary, asSpot ~~increased~~Mobile ~~competition~~Corp. ~~from~~Except ~~established~~for ~~companies~~Mr. ~~There~~Kapner, ~~are~~none noof ~~significant~~our ~~barriers~~executive toofficers ~~entry~~have inany ~~the~~written ~~industry~~employment inagreements ~~which~~with wethe ~~operate.~~Company Weand ~~have~~we ~~significant~~do ~~competitors~~not ~~and~~carry ~~may~~key ~~face~~man ~~increased~~life ~~competition~~insurance ~~from~~on ~~new~~any ~~entrants~~of ~~or existing~~their ~~competitors~~lives. ~~who~~The ~~focus~~loss onof ~~market~~services ~~segments~~from ~~currently~~any ~~served~~of bysuch ~~us.~~key ~~These~~personnel ~~competitors~~could ~~include~~have ~~large~~a ~~and~~material ~~small~~adverse ~~retailers,~~effect ~~wholesalers,~~on ~~and~~our ~~international~~business ~~competitors.~~or ~~Many~~results of ~~these~~operations. Furthermore, ~~competitors~~our ~~are~~continued ~~larger~~growth ~~and~~strategy ~~have~~depends ~~significantly~~on ~~greater~~the ~~financial~~ability to identify, ~~marketing~~ recruit and ~~other~~retain ~~resources~~key ~~than~~management ~~we do~~personnel. The ~~There~~competition for such employees is intense, and there can be no assurance ~~that~~ we will be ~~able~~successful ~~to maintain or increase our market share~~ in ~~the~~such ~~future~~efforts. We ~~Any~~are ~~failure~~also ofdependent on our ~~business~~ability to ~~compete~~continue ~~successfully~~to ~~would~~attract, ~~materially~~retain and ~~adversely~~motivate ~~affect~~production, ~~our~~distribution, ~~financial condition~~sales, communications and ~~results~~other ~~of operations~~personnel.

~~We may not be able to respond in a timely and cost effective manner to changes in consumer preferences.~~ 10

~~The~~As ~~products~~a ~~and~~public ~~services~~company ~~that our businesses offer are subject to changing consumer preferences. A shift in consumer preferences away from the products and services~~ we ~~offer~~incur ~~could~~costs ~~have a material adverse effect on our business, financial condition~~ and ~~results of operations. Our future success depends in part on our ability to anticipate and respond to changes in consumer preferences and there can be no assurance that~~ we ~~will~~need ~~respond in a timely or effective manner. Failure~~ to ~~anticipate~~offset ~~and~~these ~~respond~~costs toby ~~changing~~decreasing ~~consumer preferences could lead to, among~~ other ~~things,~~expenses ~~lower sales of our products~~ and ~~services, significant markdowns~~ /or ~~write-offs~~increasing ~~of inventory~~revenues, ~~increased~~we ~~product~~may ~~returns~~not ~~and~~be ~~lower~~able ~~margins,~~to ~~which~~absorb ~~would~~these ~~have~~costs awhich ~~material~~may ~~adverse~~adversely ~~effect~~affect on our ~~business, financial condition and results of~~ operations.

~~Our~~As ~~business~~a ~~would~~public becompany, ~~harmed~~we ifincur ~~our~~significant ~~third~~legal, ~~party~~accounting ~~manufacturers~~ and ~~service~~other ~~providers~~expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as amended, as well as new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. We are ~~unable~~in the process of trying to ~~deliver~~implement ~~products~~some orof ~~provide~~the ~~services~~corporate ingovernance astandards, ~~timely~~ disclosure controls and ~~cost~~financial ~~effective~~reporting ~~manner.~~and accounting systems to meet our reporting obligations as well as employment contracts for key personnel; however, we expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

~~Our~~The ~~mobile~~measures ~~telephone~~we ~~products~~take ~~are~~may ~~manufactured~~not bybe ~~other~~sufficient ~~companies,~~to ~~primarily~~satisfy ~~in the Far East. If~~ our ~~suppliers~~obligations ~~are~~as ~~unable, either temporarily or permanently, to deliver products in~~ a ~~timely~~public company and ~~cost~~we ~~effective~~expect ~~manner,~~the itimplementation ~~could~~costs ~~have an adverse impact on our business, financial condition~~ and ~~results~~engagement of ~~operations.~~professionals Itto isassist ~~critical that our product manufacturers produce high-quality, reasonably priced products~~ in athe ~~timely~~implementation ~~fashion.~~to ~~However,~~be ~~because~~prohibitive ~~our primary product manufacturers are foreign companies which require longer lead times for products, any delay~~ in ~~production or delivery would adversely affect sales of~~ the ~~product~~short ~~and our business, financial condition and results of operations~~term.

WeThere ~~are~~can ~~dependent upon~~be no assurance that our ~~MNO~~current or future management will be able to ~~provide~~implement ~~access~~and affect programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance, and reporting requirements without significant cost to us. Unless we offset the ~~AT&T~~additional costs by decreasing other expenses and/or ~~T-Mobile~~increasing ~~cellular~~revenue ~~networks~~or raising additional capital, we may not be able to absorb the costs of complying with Sarbanes Oxley and ~~services~~our ~~for~~SEC ~~billing~~reporting requirements, which may divert funds away from marketing activities and maintaining ~~customer~~state ~~balances.~~of Wethe ~~are~~art ~~also~~manufacturing ~~dependent~~equipment, ~~upon~~either onof which could adversely affect our ~~own~~operations. Further ~~network~~tightening may require us to ~~provide~~defer ~~switching,~~management ~~routing~~salaries, ~~billing,~~which ~~payment~~may ~~systems,~~discourage ~~fraud monitoring~~current management personnel and ~~customer~~prospects ~~service.~~from ~~Any~~remaining ~~interruption~~with or ~~failure~~joining inthe ~~either~~Company. We ofcan ~~the~~make ~~MNO~~no ~~network~~assurances orthat ~~our~~we ~~own~~will ~~network~~not ~~for~~defer ~~any~~executive ~~reason~~salaries, which could ~~adversely~~ affect our ~~financial~~ability ~~condition~~to attract, recruit or ~~results~~retain ofqualified ~~operations.~~management personnel that would otherwise help us minimize the professional costs associated with our compliance and reporting requirements.

~~Our~~Given the increasingly tightening financial ~~performance~~constraints, ~~would~~in particular the expense and costs of operating as a public company and the litigation facing the business, there can be ~~harmed~~no ifassurance wethat ~~suffer~~the ~~disruptions~~Company inwill ~~our~~be ~~ability~~able to ~~fulfill~~afford ~~orders~~to continue to file its Quarterly or Annual reports with the SEC and may not be able to continue to comply with future reporting requirements. This outcome would have a material negative impact on the ability to trade in our stock.

~~Our~~Certain ~~ability~~stockholders tocan ~~provide~~exert ~~effective~~control ~~customer~~over ~~service,~~us ~~efficiently fulfill orders~~ and distribute our products depends, to a large degree, on the efficient and uninterrupted operation of the manufacturing and related distribution centers, and management information systems run by third parties and on the timely performance of other third parties such as shipping companies and the United States Postal Service. Any material disruption or slowdown in our manufacturing, order processing or fulfillment systems resulting from strikes or labor disputes, telephone down times, electrical outages, mechanical problems, human error or accidents, fire, natural disasters, adverse weather conditions or comparable events could cause delays in our ability to receive and distribute orders and may ~~cause~~not ~~orders~~make todecisions ~~be lost or to be shipped or delivered late. As a result, customers may cancel orders or refuse to receive goods on account of late shipments~~ that ~~would~~further ~~result~~the inbest ainterests ~~reduction~~ of ~~net~~all ~~sales and could mean increased administrative and shipping costs~~stockholders. ~~Our success depends in part on our maintaining high quality customer service and any failure to do so could adversely affect our business, financial condition or results of operations.~~

WeOur officers, directors and principal stockholders (greater than 5% stockholders) together own an aggregate of approximately 25% of our outstanding common stock. Consequently, these stockholders, if they act individually or together, may ~~experience merchandise~~exert ~~returns~~a significant degree of influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or ~~warranty~~prevent ~~claims~~a inchange ~~excess~~of control of the Company and might affect the market price of our ~~expectations~~common stock, even when a change of control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions or agreements which we would not otherwise consider.

WeCertain ~~make~~conflicts ~~allowances~~of ininterest ~~our~~could ~~financial statements for anticipated merchandise returns and warranty claims based on historical return rates~~arise. There can be no assurance that actual merchandise returns and warranty claims will not exceed our allowances. In addition, because our allowances are based on historical return rates, there can be no assurance that the introduction of new

10Charles Zwebner, our Chief Executive Officer, is also the sole officer and director of Blackbird Corporation (“Blackbird”) and its subsidiary, Yak America Inc. (“Yak America”). Therefore, Mr. Zwebner will need to devote a portion of his time and efforts to these companies. Blackbird is in the process of being liquidated and dissolving. Additionally, it is expected that no further material resources will be spent on the business of Yak America as its management is now planning to divest the business during the next 9 months. There can be no assurance that a sale of Yak America, whose operations are in part intertwined with the Company, will not have a negative impact, both during and after the divestiture, on the financial results of the Company. Also, it is not expected that Mr. Zwebner will devote significant time to the affairs of these entities. However, if additional time or resources are required to wind down or otherwise address the operations of these companies, conflicts may limit the availability of Mr. Zwebner to manage the Company.

~~Table~~Our board of ~~Contents~~directors has not established any committees.

~~merchandise~~We have not established any committees including an Audit Committee, ~~changes~~a inCompensation ~~the~~Committee ~~merchandise~~or ~~mix~~a Nominating Committee, or ~~other~~any ~~factors~~committee ~~will~~performing a similar function. Our Board of Directors consists of only three members, two of which are also executive officers of the Company, and has not ~~cause~~delegated ~~actual~~any ~~returns~~of its functions to ~~exceed~~committees. Only ~~return~~one ~~allowances~~of our Board of Directors qualifies as “independent” under any exchange or SEC standard. The ~~Any~~entire ~~significant~~Board ~~increase~~of inDirectors ~~merchandise~~acts ~~returns~~as ~~and~~our ~~warranty~~audit ~~claims~~committee as permitted under Section 3(a)(58)(B) of the Exchange Act. Our Board of Directors reviews the professional services provided by our independent auditors, ~~or merchandise~~the ~~returns~~independence of our auditors from our management, our annual financial statements and ~~warranty~~our ~~claims~~system of internal accounting controls. Further, as we are currently quoted on the OTC Pink Sheets, we are not subject to any exchange rule which includes qualitative requirements mandating the establishment of any particular committees or that ~~exceed~~a majority of our ~~allowances,~~Board ~~could~~of ~~adversely~~Directors ~~affect~~be independent. We do not have a policy regarding the consideration of any director candidates which may be recommended by our ~~business~~shareholders, ~~financial~~including ~~condition~~the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and ~~results~~evaluating director nominees. We have not adopted a policy regarding the handling of ~~operations~~any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our Board of Directors has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors.

~~We may be subject to product liability claims.~~ 11

The ~~Company’s operations~~issuance ~~could~~of beadditional ~~impacted~~shares by the both genuine and fictitious claims regarding the Company’s products. The Company could also suffer losses from a significant product liability judgment against it. A significant product liability judgment could also result in a loss of ~~consumer~~common ~~confidence~~stock ~~in the Company’s products and an actual~~ or ~~perceived~~preferred ~~loss~~stock ofcould ~~value~~change ofcontrol ~~the Company’s brand, materially impacting consumer demand. Although the Company intends to carry product liability insurance, the amount~~ of ~~liability from product liability claims may exceed~~ the ~~amount of any insurance proceeds received by the~~ Company.

~~Changes~~Our certificate of incorporation authorizes the Board of Directors, without approval of the shareholders, to cause shares of preferred stock to be issued in one or more series, with the ~~regulatory~~numbers ~~framework~~of shares of each series to be determined by the Board of Directors. Our certificate of incorporation further authorizes the Board of Directors to fix and determine the powers, designations, preferences and relative participating, optional or other rights (including, without limitation, voting powers, preferential rights to receive dividends or assets upon liquidation, rights of conversion or exchange into common stock or preferred stock of any series, redemption provisions and sinking fund provisions) between series and between the preferred stock or any series thereof and the common stock, and the qualifications, limitations or restrictions of such rights. In the event of issuance, preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change of control of our company. We have 1,000,000,000 shares of common stock authorized, including 29,253,594 shares which are issued and outstanding. Our existing shareholders may suffer dilution in their interest without having the opportunity to approve any transactions pursuant to which the Company may issue additional shares of common stock or preferred stock. Although we ~~operate~~have ~~could~~no ~~adversely~~present ~~affect~~plans ~~our~~to ~~business~~issue ~~prospects~~additional shares of common stock (other than through the terms of the Private Placement or ~~results~~the exercise of ~~operations~~outstanding warrants or options) or series or shares of preferred stock, we can give no assurance that we will not do so in the future.

Our ~~domestic~~ownership ~~operations~~of ~~are~~Spot ~~subject~~Mobile ~~to regulation by the FCC and other federal, state and local agencies, and our international operations are regulated by various foreign governments and international bodies~~Corp. ~~These~~could ~~regulatory~~be ~~regimes~~diluted frequently restrict our ability to operate in or provide specified products or services in designated areas, require that we maintain licenses for our operations and conduct our operations in accordance with prescribed standards. We are frequently involved in regulatory proceedings related to the application of these requirements. It is impossible to predict with any certainty the outcome of pending federal and state regulatory proceedings relating to our provision of retail or wholesale services, or the reviews by ~~federal~~up ~~or state courts of regulatory rulings. Unless we are able~~ to ~~obtain appropriate relief, existing laws and regulations may inhibit our ability to expand our business and introduce new products and services~~95%.

~~Similarly,~~Concurrent wewith ~~cannot~~the ~~guarantee~~signing ~~that~~of wethe ~~will~~new becarrier ~~successful~~agreement aton ~~obtaining~~February ~~the~~14, ~~licenses~~2012, ifand ~~required~~to secure critical working capital, toSpot ~~carry~~Mobile ~~out~~Corp, ~~our~~executed ~~business~~a ~~strategy~~Secured or Convertible Note financing agreement (the “Convertible Notes”) in ~~maintaining~~the ~~our~~principal amount of up to $2,000,000 in favor of an affiliate of the existing ~~licenses~~Secured Note lender. Principal ~~The~~and ~~loss~~interest ~~of,~~owed orunder the Convertible Notes is convertible at any time into a ~~material~~combination ~~limitation~~of ~~on,~~voting ~~certain~~preferred and voting common shares of ~~our~~Spot ~~licenses~~Mobile ~~could~~Corp. ~~have~~at a ~~material~~conversion ~~adverse~~ratio ~~effect~~to be fixed within 90 days of the issuance of the Convertible Notes based on ~~our~~the ~~wireless~~equity value of the Company measured just prior to the issuance of the Convertible Notes, as determined by an independent business valuation. Based upon the valuation, ~~results~~the Convertible Notes are convertible into equity constituting up to 95% of ~~operations~~the ~~and~~capital ~~financial~~stock ~~condition.~~of Spot Mobile Corp.

The ~~adoption~~Company ofmay ~~new~~require ~~laws~~a orfinancial ~~regulations~~ or ~~changes~~corporate ~~to the existing regulatory framework at the federal or state level could also adversely affect our business plans~~restructuring.

~~Unforeseen~~As ~~new~~a ~~regulations~~result ~~could~~of ~~restrict~~ongoing litigation and more specifically, the ~~ways~~awarding inof ~~which~~two wejudgments ~~can~~against ~~manage~~the ~~our~~Company ~~wire~~in ~~line~~favor ~~and wireless~~of ~~networks,~~creditor ~~impose~~parties ~~additional~~in ~~costs~~the amounts of $434,000 ~~impair~~and ~~revenue~~$1,323,000 ~~opportunities~~respectively, and ~~potentially~~the ~~impede~~significant ~~our~~interest ~~ability~~continuing to ~~provide~~accrue ~~services~~on inthese aoutstanding ~~manner~~amounts, ~~that~~the ~~would~~Company may be ~~attractive~~forced to usrestructure ~~and~~itself ~~our~~to ~~customers.~~reduce Ifor ~~new~~refinance ~~rules~~existing ~~are~~debt. This ~~adopted~~restructure ~~that~~could ~~limit~~include ~~our~~among ~~flexibility~~other ~~in managing~~things, ~~our~~the ~~networks~~sale ~~and~~of ~~delivering~~assets, ~~services~~an insolvency proceeding, ~~these~~a ~~rules~~plan ~~could~~of ~~have~~liquidation or a ~~significant~~privatization ~~adverse~~of ~~effect~~the onCompany. It is our ~~business,~~intention ~~restrict~~to ~~our~~engage ~~ability~~restructuring and investment banking professionals to ~~compete~~assist in this process. There can be no assurance that the ~~marketplace~~Company ~~and~~will ~~limit~~be successful in any of its restructuring efforts and the ~~return~~outcome wemay ~~can~~have ~~expect~~a tomaterial ~~achieve~~negative impact on ~~past~~the value of our stock and ~~future~~the ~~investments~~ability to trade in our ~~networks~~stock.

~~Our~~A ~~failure~~NOTE toABOUT ~~retain~~FORWARD-LOOKING ~~and attract qualified personnel could harm our business.~~ STATEMENTS

~~The~~This ~~Company’s~~Annual ~~success~~Report ~~depends~~(including onthe exhibits) contains certain “forward-looking statements” within the ~~Company’s~~meaning ~~ability~~of toSection 27A ~~attract,~~of ~~train~~the ~~and~~Securities ~~retain~~Act ~~qualified~~of ~~personnel.~~1933, ~~Competition~~as ~~for qualified~~amended ~~personnel~~(the is“Securities ~~intense~~Act”), and Section 21E of the ~~Company~~Securities ~~may~~Exchange ~~not~~Act beof ~~able~~1934 to(the ~~hire~~“Exchange ~~sufficient~~Act”), ~~personnel~~such as statements relating to ~~achieve~~our ~~the~~financial ~~Company’s~~condition, ~~goals~~results of operations, plans, objectives, future performance or ~~support~~expectations, ~~the~~and ~~anticipated~~business ~~growth~~operations. inThese ~~the~~statements ~~Company~~relate to expectations concerning matters that are not historical fact. Accordingly, statements that are based on management’s ~~business~~projections, estimates, assumptions, and judgments constitute forward-looking statements. ~~The~~These ~~market~~forward-looking ~~for~~statements ~~the~~are ~~personnel~~typically ~~the~~identified ~~Company~~by ~~requires~~words ~~is competitive~~or phrases such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “approximately,” “intend,” “objective,” “goal,” “project,” and other similar words and expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may.” IfThese ~~the~~forward-looking ~~Company~~statements ~~fails~~are based largely on information currently available to ~~attract~~our management and ~~retain~~on ~~qualified~~our ~~personnel~~current expectations, ~~the~~assumptions, ~~Company’s~~plans, estimates, judgments and projections about our business ~~will~~and ~~suffer~~our industry, and such statements involve inherent risks and uncertainties. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Some factors include, but are not limited to, those described under the “Risk Factors,” in this Item 1A of our Annual Report.

Additionally, companies whose employees accept positions with competitors often claim that such competitors have engaged in unfair hiring practices. The Company may receive such claims in the future as the Company seeks to hire qualified employees. The Company could incur substantial costs in defending against any such claims. 12

WeAll ~~may~~written ~~have~~or ~~difficulty~~oral ~~managing~~forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. Such forward-looking statements speak only to the date that such statements are made, and we undertake no obligation to update any ~~future~~forward-looking ~~growth~~statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. We do not promise to update forward-looking information to reflect actual results or changes in assumptions or other factors that could affect these statements other than material changes to such information.

To implement the Company’s business objectives, it may need to grow rapidly in the future and the Company expects that such growth would lead to increased responsibility for both existing and new management personnelITEM 1B. UNRESOLVED ToSTAFF help manage future growth effectively the Company must maintain and enhance its financial and accounting systems and controls, hire and integrate new personnel and manage expanded operations. The growth in business, headcount and relationships with customers and other third parties is expected to place a significant strain on the Company’s management systems and resources. The Company will need to continue to improve its operational, managerial and financial controls, reporting systems and procedures, and will need to continue to expand, train and manage its work force. The Company’s failure to manage its future growth successfully would have a material adverse effect on the quality of its products and technology, its ability to retain customers and key personnel and its operating results and financial condition. COMMENTS

11 None.

~~Table of Contents~~ITEM 2. PROPERTIES

~~Risks~~The ~~Related~~Company’s Tosubsidiary ~~Ownership~~currently operates from office space leased by Yak America Inc. and Cipher Networks Inc. at their monthly cost of approximately $5,000. Yak America Inc. and Cipher Networks Inc. are principally owned and controlled by Charles Zwebner, our ~~Common~~Chief ~~Stock~~Executive Officer. We also lease space to house our telecommunications switch and cross-connect platforms. This facility accommodates switches for many other carriers and provides ease of access within an environmentally controlled space with full back-up systems. Monthly cost is approximately $18,000.

~~There~~We isbelieve athat ~~limited~~our ~~market~~existing facilities are suitable and adequate and that we have sufficient capacity to meet our current anticipated needs. These facilities are critical to our operations; however, suitable alternative premises can be made available in substantially all of the locations where we conduct business. We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and dispose of existing facilities. For a discussion of certain related party transactions concerning our ~~securities~~leased office facility, see “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

~~There is a limited trading market for our common stock~~ITEM 3. LEGAL There can be no assurances that an established trading market will develop for our common stock in the future. Such a market, if it does develop for our common stock, could be subject to extreme price and volume fluctuations. In the absence of an active trading market: PROCEEDINGS

•From ~~investors~~time to time, we may ~~have~~be ~~difficulty~~subject ~~buying~~to legal proceedings and ~~selling~~claims orin ~~obtaining~~the ~~market~~ordinary ~~quotations;~~course of business, including claims of alleged infringement of trademarks and other intellectual property of third parties by the Company. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

•Coastline ~~market~~Capital On ~~visibility~~May 5, 2008, we filed a lawsuit against Coastline Capital for ~~our~~Declaratory ~~common~~Relief ~~stock~~related ~~may~~to becertain ~~limited;~~debenture transactions. Our suit for Declaratory Relief sought a Judgment from the Court that Coastline Capital had not earned a broker’s fee in the subject transaction in that Coastline Capital did not represent us in the transaction that closed and, pursuant to the terms of the brokerage contract, Coastline Capital was not entitled to a broker’s fee. The parties agreed to binding arbitration to resolve the dispute and the arbitration proceeding was concluded in May 2010. On June 10, 2010, the arbitrator awarded Coastline Capital the amount of $300,000. We recorded the net amount of the award in the first quarter of fiscal year 2010 as a loss on legal settlement. Coastline Capital has obtained a judgment against the Company in the amount of $434,520, inclusive of attorney fees and costs, in the Superior Court of California. As of January 5, 2011, Coastline Capital has filed a petition in the Circuit Court of the Eleventh Judicial District, Miami-Dade County, State of Florida for the enforcement and execution in Florida of its California state court judgment.

•Liotta Litigation On November 24, 2009, Matthew Liotta filed a ~~lack~~first amended complaint in Fulton County Georgia against us and one of ~~visibility~~our former subsidiaries alleging wrongful termination and damages for ~~our~~unpaid ~~common~~compensation ~~stock~~pursuant ~~may~~to ~~have~~a written employment contract. On January 12, 2010, the Company and its former subsidiary filed an answer denying the allegations of the complaint and asserting affirmative defenses including that neither the Company nor its former subsidiary had ever executed an employment contract with Matthew Liotta. On July 28, 2010, we entered into a ~~depressive~~Release ~~effect~~and onSettlement Agreement with the ~~market~~plaintiffs ~~price~~(the “Liotta Settlement Agreement”). Pursuant to the Liotta Settlement Agreement we agreed to issue an aggregate of 350,000 shares of Common Stock to the plaintiffs in exchange for ~~our~~a ~~common~~full ~~stock~~release of all liabilities, damages and obligations relating to this matter as well as a dismissal of the lawsuit. The Settlement Agreement also related to the litigation described below regarding the former One Ring shareholders. Matthew Liotta became a director of the Company on June 2, 2011.

~~The OTC Bulletin Board is an over-the-counter market that provides significantly less liquidity than other established exchanges or Nasdaq.~~ 13

~~Our~~Former ~~shares~~One ofRing ~~common~~Networks ~~stock~~Shareholders ~~are~~Litigation ~~quoted~~Five onof the ~~Over-the-Counter~~11 ~~Bulletin~~former ~~Board~~shareholders ~~which~~of ~~provides~~One ~~less~~Ring ~~liquidity~~Networks, ~~than~~Inc., ~~other established~~a ~~markets~~former orsubsidiary ~~exchanges.~~of the Company, filed a lawsuit, in The ~~sale~~District Court of ~~shares~~Nebraska, ~~could~~against ~~have~~the aCompany ~~depressing~~claiming ~~effect~~that onthe earn out portion of the ~~market~~purchase price ifdue ato ~~market~~them ~~develops.~~under ~~Sales~~that ofcertain ~~substantial~~Stock ~~amounts~~Purchase ofAgreement ~~our~~between ~~common~~One ~~stock,~~Ring orand the ~~perception~~Company ~~that~~dated ~~such~~March 28, ~~sales~~2008 ~~might~~was ~~occur~~incorrectly calculated and unpaid. On January 27, ~~could~~2010, ~~adversely~~we ~~affect prevailing~~filed ~~market~~an ~~prices~~answer to the complaint denying the allegations of ~~our~~the ~~common~~complaint ~~stock~~and asserted affirmative defenses. As described above, on July 28, 2010, we entered into the Settlement Agreement pursuant to which this lawsuit has been dismissed.

~~Our~~Wasserman, ~~common~~Comden, ~~stock~~Casselman is& ~~considered~~Esensten, L.L.P. Litigation In December 2010, Wasserman, Comden, Casselman & Esensten, L.L.P. (“Wasserman”) filed an action against the Company in the Superior Court of the State of California, County of Los Angeles, Northwest District. This matter involved claims by the Company’s former attorneys for alleged breach of contract and seeks damages in the amount of $132,000 representing amounts invoiced to bethe Company for legal services previously rendered. As of January 28, 2011, the Company entered into a Settlement Agreement and Mutual Release with respect to this matter (the “~~penny~~Wasserman ~~stock~~Settlement Agreement”). Pursuant ~~and~~to the Wasserman Settlement Agreement, aswe ~~such~~paid $75,000 to the ~~market for~~plaintiff ~~our~~in ~~common~~exchange ~~stock~~for ~~may~~a befull ~~further~~release ~~limited~~of byall ~~certain~~liabilities, ~~sec~~damages ~~rules~~and ~~applicable~~obligations relating to ~~penny~~this ~~stocks.~~matter as well as a dismissal of the lawsuit.

ToIn ~~the~~connection ~~extent~~with the ~~price of~~initial ~~our~~closing ~~common~~under ~~stock~~the ~~remains below $5.00 per~~ share orexchange weagreement ~~have a net tangible assets of $2,000,000~~ (~~$5,000,000~~described ifin weNote ~~are~~1 ~~deemed~~ to bethe infinancial ~~continuous~~statements ~~business~~incorporated ~~for less than three years~~herein) ~~or less~~, our ~~common~~former ~~shares~~subsidiary ~~will~~Telenational beCommunications ~~subject to certain “penny stock” rules promulgated by the SEC~~Inc. ~~Those~~agreed ~~rules impose certain sales practice requirements on brokers who sell penny stock~~ to ~~persons~~indemnify ~~other than established customers~~ and ~~accredited~~hold ~~investors~~us ~~(generally~~harmless ~~institutions~~from ~~with~~all ~~assets~~liabilities ~~in excess~~ of ~~$5,000,000~~ orTelenational ~~individuals with net worth in excess of $1,000,000). For transactions covered by the penny stock rules, the broker must make a special suitability determination for the purchaser~~ and ~~receive~~One ~~the~~Ring ~~purchaser’s~~including ~~written~~any ~~consent to the transaction prior to the sale. Furthermore~~claims, ~~the~~losses ~~penny~~or ~~stock~~damages ~~rules~~arising ~~generally~~from ~~require,~~or ~~among~~relating other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the-bid and asked prices and disclosure of the compensation to the ~~brokerage~~legal ~~firm~~proceedings ~~and~~described ~~disclosure of the sales person~~above. ~~These rules and regulations adversely affect the ability of brokers to sell our common shares and limit the liquidity of our securities.~~

WeLV doAdministrative ~~not~~Services, ~~intend~~Inc. Litigation On June 6, 2011, we received a notice from LV Administrative Services, Inc., as administrative and collateral agent for Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) (collectively, the “Creditor Parties”) under that certain Master Security Agreement, dated February 24, 2010, executed by the Company and Mr. Prepaid, our wholly-owned subsidiary, and a Secured Term Note, dated February 24, 2010, issued by the Company in favor of the Creditor Parties that we were in default under such loan documents for failure to pay ~~any~~scheduled ~~dividends~~interest onpayments and failure to provide certain financial reports. On July 12, 2011, we received further notice from the Creditor Parties regarding the acceleration of all amounts due under their senior secured note and demanding payment of $ 1,323,366. On July 15, 2011, the Creditor Parties filed a lawsuit against the Company and Mr. Prepaid in the Supreme Court of the State of New York seeking summary judgment due to our ~~common~~failure ~~stock~~to pay the amounts due under the senior secured note and seeking to enforce their rights and remedies under our loan documents. On December 6, 2011, the trial court issued a judgment against Spot Mobile International, Ltd. in the ~~foreseeable~~amount ~~future~~of $1,323,366, which was the loan amount. Prior to the judgment and in connection with a proposed settlement of the dispute between the Creditor Parties and the Company, the Company delivered a good faith deposit in the amount of $200,000 in this matter, which remains in escrow. The Court denied the Company’s request to allow its claims to proceed in that same case as a setoff of the loan amount, but granted leave to file the claim separately. On February 22, 2012, the Company filed a separate suit in U.S. District Court in the Southern District of New York to assert its counterclaim of damages against the Creditor Parties, a principal of the Creditor Parties and the Company’s former CEO. The complaint alleges, among other things, Breach of Contract, Breach of Fiduciary Duty and Fraud in the defendants’ actions leading up to, during and subsequent to, the 2009 reverse merger of Rapid Link, Blackbird and Mr. Prepaid. The Company is seeking no less than $3,000,000 in damages from the defendants in the lawsuit.

WeJenkins ~~currently~~Litigation In November ~~intend~~2011, toJohn ~~retain~~Jenkins ~~all~~(“Jenkins”) ~~future~~filed ~~earnings~~an action against the Company’s directors, ifas ~~any~~individuals, toin ~~finance~~U.S. ~~our~~District ~~current~~Court in the Central District of California. The Company was not named as a defendant in the complaint. This matter involves claims by the Company’s former Chairman and ~~proposed~~CEO ~~business~~for ~~activities~~ alleged intentional interference with contract, fraud and dounfair ~~not~~competition ~~anticipate~~related ~~paying~~to ~~any~~a ~~cash~~share ~~dividends~~lock-up onagreement ~~our~~that ~~common~~was ~~stock~~executed inbetween Jenkins and the ~~foreseeable~~Company ~~future~~in February 2010. Claimant Weseeks ~~may~~the ~~also~~unrestricted ~~incur~~ability ~~indebtedness~~to transfer/sell his equity shares in the ~~future~~Company ~~that~~and ~~may~~unspecified ~~prohibit~~damages. An oramended ~~effectively~~complaint ~~restrict~~was received on January 19, 2012. The Company’s directors believe the ~~payment~~lawsuit ofis ~~cash~~without ~~dividends~~merit and on ~~our~~February ~~common~~15, ~~stock.~~2012 we filed a defense and a Motion to Dismiss the claim.

WeIn addition to the above, from time to time, we are ~~subject~~periodically a party to or otherwise involved in legal proceedings arising in the ~~ongoing~~normal ~~requirements~~and ordinary course of ~~Section 404~~business. Other than as described above, as of the ~~Sarbanes-Oxley~~date ~~Act.~~of this Annual Report, management does not believe that there is any proceeding threatened or pending against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.

We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which requires that we document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures. During the course of our ongoing evaluation and integration of the internal controls of our business, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review. If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected. 14

We believe that the out-of-pocket costs, the diversion of management’s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of SectionITEM ~~404 of the Sarbanes-Oxley Act could be significant~~4. MINE IfSAFETY ~~the time and costs associated with such compliance exceed our current expectations, our~~ DISCLOSURES

12 None.

~~Table~~PART ~~of Contents~~II

~~results~~ITEM ~~of operations could be adversely affected~~5. AsMARKET ofFOR ~~October 31,~~REGISTRANT’S ~~2010,~~COMMON our management has concluded that our disclosure controls and procedures were inadequate due to certain material weakness in internal controls over financial reporting including: (i) not maintaining sufficient personnel with clearly delineated and fully documented responsibilities and with an appropriate level of accounting expertise; (ii) insufficient documented procedures to identify and prepare a conclusion on matters involving material accounting issues; and (iii) lack of entity level controls at our subsidiaries. Although the Company has taken steps to address these weaknessesEQUITY, weRELATED ~~cannot~~STOCKHOLDER beMATTERS ~~certain~~AND atISSUER ~~this~~PURCHASES ~~time~~OF ~~that~~EQUITY we will be able to successfully remediate these weaknesses which may require us to report one or more material weaknesses in connection with the presentation of our financial statements in the future. Material weaknesses in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition. SECURITIES

WeMarket ~~are dependent on the services of key personnel.~~ Information

~~Our~~There ~~success depends~~is to a ~~significant~~limited ~~extent~~public ~~upon~~market for the ~~continued~~shares ~~service~~ of our ~~senior~~common ~~management,~~stock ~~including~~and ~~Charles~~there ~~Zwebner,~~can ~~our~~be ~~Chairman~~no ~~and~~assurance ~~Chief~~that ~~Executive~~a ~~Officer,~~liquid ~~and~~market ~~Jeffrey~~for ~~Kapner, President of~~ our ~~subsidiary,~~common ~~Spot~~stock ~~Mobile~~will ~~Corp.~~ever ~~Except for Mr~~develop. ~~Kapner, none~~ Transfer of our ~~executive~~common ~~officers~~stock ~~have~~may ~~any~~also ~~written~~be ~~employment~~restricted ~~agreements~~under ~~with~~ the ~~Company~~securities ~~and~~or weblue dosky ~~not~~laws ~~carry key man life insurance on any~~ of ~~their~~various ~~lives.~~states ~~The~~and ~~loss~~foreign ~~of services from any of such key personnel could have a material adverse effect on our business or results of operations~~jurisdictions. ~~Furthermore~~ Consequently, our ~~continued~~shareholders ~~growth~~may ~~strategy~~not ~~depends~~be onable ~~the ability~~ to ~~identify,~~liquidate ~~recruit~~their ~~and~~investments ~~retain key management personnel. The competition for such employees is intense,~~ and ~~there~~should ~~can~~ be noprepared ~~assurance we will be successful in such efforts. We are also dependent on our ability~~ to ~~continue~~hold tothe ~~attract,~~common ~~retain~~stock ~~and~~for ~~motivate~~an ~~production,~~indefinite ~~distribution,~~period ~~sales,~~of ~~communications and other personnel~~time.

AsOur acommon ~~public~~stock ~~company~~is wequoted ~~incur~~on ~~costs~~the ~~and~~OTC wePink ~~need~~Sheets tounder ~~offset~~the ~~these~~symbol ~~costs~~“RPID.” byThe ~~decreasing~~range ~~other~~of ~~expenses~~closing ~~and/or~~prices ~~increasing~~for ~~revenues~~our common stock, weas ~~may~~reported ~~not~~during beeach ~~able~~quarter tosince ~~absorb~~October ~~these~~2010 ~~costs~~was ~~which~~as ~~may~~follows. These ~~adversely~~quotations ~~affect~~are adjusted for our ~~operations.~~ 2010 Reverse Stock Split and reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as amended, as well as new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. We are in the process of implementing corporate governance standards, disclosure controls and financial reporting and accounting systems to meet our reporting obligations as well as employment contracts for key personnel; however, we expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

Quarter Ended	High		Low

October 31, 2010	$	1.50	$	0.60
January 31, 2011	$	0.72	$	0.72
April 30, 2011	$	0.34	$	0.34
July 31, 2011	$	0.15	$	0.15
October 31, 2011	$	0.05	$	0.05

~~The~~On ~~measures~~March we19, ~~take~~2012, ~~may not be sufficient to satisfy~~ our ~~obligations~~common asstock had a ~~public~~closing ~~company~~price ~~and we expect the implementation costs and engagement~~ of ~~professionals to assist in the implementation to be prohibitive in the short term~~$0. 04.

There can be no assurance that our current or future management will be able to implement and affect programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance, and reporting requirements without significant cost to us. Unless we offset the additional costs by decreasing other expenses and/or increasing revenue or raising additional capital, we may not be able to absorb the costs of complying with Sarbanes Oxley and our SEC reporting requirements, which may divert funds away from marketing activities and maintaining state of the art manufacturing equipment, either of which could adversely affect our operations. Further tightening may require us to defer management salaries, which may discourage current management personnel and prospects from remaining with or joining the Company. We can make no assurances that we will not defer executive salaries, which could affect our ability to attract, recruit or retain qualified management personnel that would otherwise help us minimize the professional costs associated with our compliance and reporting requirements. Holders

~~Certain~~As ~~stockholders~~of ~~can~~March ~~exert~~19, ~~control~~2012, ~~over~~there uswere ~~and~~approximately ~~may~~579 ~~not~~security ~~make~~holders ~~decisions~~of ~~that~~record ~~further~~of ~~the~~our ~~best~~common ~~interests of all stockholders~~stock.

~~Our~~Transfer ~~officers,~~Agent ~~directors~~ and principal stockholders (greater than 5% stockholders) together own an aggregate of approximately 26% of our outstanding common stock. Consequently, these stockholders, if they act individually or together, may exert a significant degree of influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change of control of the Company and might affect the market price of our common stock, even when a change of control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions or agreements which we would not otherwise consider. Registrant

13Our transfer agent is Securities Transfer Corporation, located at 2591 Dallas Parkway, Suite 120 Frisco, Texas 75034. Their phone number is 469-633-0101.

~~Table~~Dividend ~~of Contents~~Policy

~~Certain~~Holders ~~conflicts~~of our common stock are entitled to receive dividends when and if declared by our Board of ~~interest~~Directors ~~could~~out ~~arise~~of funds legally available. We, however, have never paid any cash dividends and do not anticipate paying any cash dividends in the foreseeable future. Instead we intend to retain any future earnings to support the development and growth of our business. We may consider payment of dividends at some point in the future, but the declaration of dividends is at the discretion of the Board of Directors, and there is no assurance that dividends will be paid at any time. Our Board of Directors will make any such future determination as to the payment of dividends at its discretion, and its determination will depend upon our operating results, financial condition and capital requirements, general business conditions and such other factors that the Board of Directors considers relevant. In addition, our loan agreements with various lenders prohibit us from paying cash dividends or making other distributions on our common stock without prior consent.

~~Charles J. Zwebner, our Chief Executive Officer, is also the sole officer and director of Blackbird Corporation and its subsidiary, Yak America Inc. Therefore, Mr.~~ITEM ~~Zwebner will need to devote a portion of his time and efforts to these companies~~6. SELECTED ~~Blackbird~~FINANCIAL is in the process of being liquidated and dissolving. Additionally, it is expected that no further material resources will be spent on the business of Yak America as its management considers alternative plans to divest the business over the next two years. Accordingly, it is not expected that Mr. Zwebner will devote significant time to the affairs of these entities. However, if additional time or resources are required to wind down or otherwise address the operations of these companies, conflicts may limit the availability of Mr. Zwebner to manage the Company. DATA

~~Our~~Not ~~board~~required offor ~~directors~~smaller ~~has~~reporting ~~not established any committees~~companies.

We have not established any committees including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing a similar function. Our Board of Directors consists of only three members, which are also executive officers of the Company, and has not delegated any of its functions to committees. The members of our Board of Directors do not qualify as “independent” under any exchange or SEC standard. The entire Board of Directors acts as our audit committee as permitted under Section 3(a)(58)(B) of the Exchange Act. Our Board of Directors reviews the professional services provided by our independent auditors, the independence of our auditors from our management, our annual financial statements and our system of internal accounting controls. Further, as we are currently quoted on the OTC Bulletin Board, we are not subject to any exchange rule which includes qualitative requirements mandating the establishment of any particular committees or that a majority of our Board of Directors be independent. We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our Board of Directors has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors. 15

~~The~~ITEM ~~issuance~~7. ofMANAGEMENT’S ~~additional~~DISCUSSION ~~shares~~AND ofANALYSIS ~~common~~OF ~~stock~~FINANCIAL orCONDITION ~~preferred~~AND ~~stock~~RESULTS ~~could~~OF ~~change control of the Company.~~ OPERATIONS

Our certificate of incorporation authorizes the Board of Directors, without approval of the shareholders, to cause shares of preferred stock to be issued in one or more series, with the numbers of shares of each series to be determined by the Board of Directors. Our certificate of incorporation further authorizes the Board of Directors to fix and determine the powers, designations, preferences and relative participating, optional or other rights (including, without limitation, voting powers, preferential rights to receive dividends or assets upon liquidation, rights of conversion or exchange into common stock or preferred stock of any series, redemption provisions and sinking fund provisions) between series and between the preferred stock or any series thereof and the common stock, and the qualifications, limitations or restrictions of such rights. In the event of issuance, preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change of control of our Company. We have 1,000,000,000 shares of common stock authorized, including 28,253,594 shares which are issued and outstanding. Our existing shareholders may suffer dilution in their interest without having the opportunity to approve any transactions pursuant to which the Company may issue additional shares of common stock or preferred stock. Although we have no present plans to issue additional shares of common stock (other than through the terms of the Private Placement or the exercise of outstanding warrants or options) or series or shares of preferred stock, we can give no assurance that we will not do so in the future. Introduction

14The following discussion should be read in conjunction with the information contained in our audited consolidated financial statements and the related notes thereto, appearing elsewhere herein.

~~Table of Contents~~Overview

AWe ~~NOTE~~are ~~ABOUT~~a ~~FORWARD~~telecommunications services company which, through our wholly-~~LOOKING~~owned ~~STATEMENTS~~subsidiaries, provides prepaid telecommunication and transaction based point of sale activation solutions through over 280 independent retailers in the Eastern United States. Our operations are conducted primarily through our wholly owned subsidiaries: Mr. Prepaid and Spot Mobile Corp. Mr. Prepaid operates as a retail point of sale distributor of prepaid wireless airtime. Spot Mobile Corp. is a prepaid wireless MVNO. We distribute and sell prepaid wireless handsets and SIM cards, offering talk and text services for wireless subscribers. Our MVNO operates on the GSM platform service.

~~This~~Critical ~~Annual~~Accounting Report (including the exhibits) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), such as statements relating to our financial condition, results of operations, plans, objectives, future performance or expectations, and business operations. These statements relate to expectations concerning matters that are not historical fact. Accordingly, statements that are based on management’s projections, estimates, assumptions, and judgments constitute forward-looking statements. These forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “approximately,” “intend,” “objective,” “goal,” “project,” and other similar words and expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may.” These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and such statements involve inherent risks and uncertainties. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Some factors include, but are not limited to, those described under the “Risk Factors,” in this Item 1A of our Annual Report. Policies

~~All~~This ~~written~~disclosure oris ~~oral~~based ~~forward-looking~~upon ~~statements~~the ~~that~~Company’s ~~are~~consolidated ~~made~~financial orstatements, ~~attributable~~which tohave usbeen ~~are~~prepared ~~expressly~~in ~~qualified~~accordance inwith ~~their~~accounting ~~entirety~~principles bygenerally ~~this~~accepted ~~cautionary~~in ~~notice~~the United States. The ~~Such~~preparation ~~forward-looking~~of these financial statements ~~speak~~requires ~~only~~that towe ~~the date~~make estimates and assumptions that ~~such~~affect ~~statements~~the ~~are~~reported ~~made~~amounts of assets, liabilities, revenues and weexpenses, ~~undertake~~and norelated ~~obligation~~disclosure toof ~~update~~contingent ~~any~~assets ~~forward-looking~~and ~~statement~~liabilities. We tobase ~~reflect~~our ~~events~~estimates oron ~~circumstances~~historical ~~after~~experience ~~the~~and ~~date~~other onassumptions ~~which~~that ~~such~~we ~~statement~~believe isto ~~made~~be orproper toand ~~reflect~~reasonable under the ~~occurrence~~circumstances. We continually evaluate the appropriateness of ~~unanticipated~~estimates ~~events.~~and Weassumptions ~~do not~~used ~~promise~~in tothe ~~update~~preparation ~~forward-looking~~of ~~information~~its toconsolidated ~~reflect~~financial ~~actual~~statements. Actual results orcould ~~changes~~differ infrom ~~assumptions~~those orestimates. The ~~other~~following ~~factors~~key ~~that~~accounting ~~could~~policies ~~affect~~are ~~these~~impacted ~~statements~~significantly ~~other~~by ~~than~~judgments, ~~material~~assumptions ~~changes~~and toestimates ~~such~~used ~~information.~~in the preparation of the consolidated financial statements.

~~ITEM~~Use ~~1B.~~of ~~UNRESOLVED STAFF COMMENTS~~estimates:

~~None~~The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

~~ITEM~~Revenue ~~2. PROPERTIES~~recognition:

~~Our~~Revenues ~~principal~~generated ~~executive~~by ~~offices~~prepaid ~~are~~calling ~~located~~cards atand ~~4950~~point ~~Yonge~~of ~~Street,~~sale ~~Suite~~activated ~~900,~~third ~~North~~party ~~York,~~Personal ~~Ontario~~Identification ~~M2N~~Numbers ~~6K1.~~(“PINs”), ~~Our~~which ~~subsidiaries~~represent ~~operate~~the ~~from~~primary ~~approximately~~sources ~~5,000 square feet~~ of ~~office~~our ~~space at 300 - 71st Street~~revenues, ~~Miami~~are ~~Beach,~~recognized ~~Florida~~as ~~33141~~revenue at athe ~~cost~~point of ~~approximately $7,000 per month~~sale. Revenue ~~Our~~from ~~subsidiaries~~the ~~operate~~sale ~~their~~of ~~technology~~cellular ~~assets~~air attime ais ~~data~~recognized ~~center~~when ~~facility~~the ~~located~~air attime 50is ~~NE 9th Street, Miami, Florida~~used. Revenue ~~This~~from ~~facility~~prepaid ~~accommodates~~telephones ~~switches~~is ~~for~~recognized ~~many~~at ~~other~~the ~~carriers~~point ~~and provides ease~~ of ~~access within an environmentally controlled space with full back-up systems~~sale. ~~Monthly cost is approximately $15,000.~~

We believe that our existing facilities are suitable and adequate and that we have sufficient capacity to meet our current anticipated needs. These facilities are critical to our operations; however, suitable alternative premises can be made available in substantially all of the locations where we conduct business. We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and dispose of existing facilities. For a discussion of certain related party transactions concerning our leased office facility, see “Item 13. Certain Relationships and Related Transactions, and Director Independence.” Inventory:

~~ITEM~~Inventory 3.consists ~~LEGAL~~of ~~PROCEEDINGS~~prepaid calling cards, PINs, cellular telephones and SIM cards which are valued at the lower of cost or net realizable value.

~~From time~~We toperform ~~time,~~an weanalysis ~~may~~of beslow-moving ~~subject~~or toobsolete ~~legal~~inventory ~~proceedings~~periodically and ~~claims~~any innecessary ~~the~~valuation ~~ordinary course of business~~reserves, ~~including~~which ~~claims~~could ofpotentially ~~alleged~~be ~~infringement~~significant, ofare ~~trademarks~~included ~~and~~in ~~other~~the ~~intellectual~~period ~~property~~in ofwhich ~~third~~the ~~parties~~evaluations byare ~~the Company~~completed. ~~Such~~Inventory ~~claims,~~impairments ~~even if not meritorious, could~~ result in ~~the~~a ~~expenditure~~new ofcost ~~significant~~basis ~~financial~~for ~~and~~accounting ~~managerial resources~~purposes.

~~Coastline Capital On~~Accounts May 5, 2008, we filed a lawsuit against Coastline Capital for Declaratory Relief related to certain debenture transactions. Our suit for Declaratory Relief sought a Judgment from the Court that Coastline Capital had not earned a broker’s fee in the subject transaction in that Coastline Capital did not represent us in the transaction that closed and, pursuant to the terms of the brokerage contract, Coastline Capital was not entitled to a broker’s fee. The parties agreed to binding arbitration to resolve the dispute and the arbitration proceeding was concluded in May 2010. On June 10, 2010, the arbitrator awarded Coastline Capital the amount of $300,000. We recorded the net amount of the award in the first quarter of fiscal year 2010 as a loss on legal settlement. Coastline Capital has obtained a judgment against the Company in the amount of $434,520.20, inclusive of attorney fees and costs, in the Superior Court of California. As of January 5, 2011, Coastline Capital has filed a petition in the Circuit Court of the Eleventh Judicial District, Miami-Dade County, State of Florida for the enforcement and execution in Florida of its California state court judgment. The Company is in settlement negotiations with respect to this matter. receivable:

15Trade accounts receivable are stated at the amount we expect to collect. We regularly monitor credit risk exposures in accounts receivable and maintain a general allowance for doubtful accounts based on historical experience for estimated losses resulting from the inability of our customers to make required payments. We consider the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer payment terms. Should any of these factors change, the estimates made by our management would also change, which in turn would impact the level of our future provision for doubtful accounts. Specifically, if the financial condition of our customers were to deteriorate, affecting their ability to make payments, additional customer-specific provisions for doubtful accounts may be required. We review our credit policies on a regular basis and analyze the risk of each prospective customer individually in order to minimize risk. Based on our management’s assessment we provide for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Interest is typically not charged on overdue accounts receivable. Balances that remain outstanding after we have used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The valuation allowance was approximately $51,000 and $9,000 as of October 31, 2011 and October 31, 2010, respectively.

~~Table of Contents~~16

~~Liotta~~Property ~~Litigation On November 24, 2009, Matthew Liotta filed a first amended complaint in Fulton County Georgia against us~~ and one of our former subsidiaries alleging wrongful termination and damages for unpaid compensation pursuant to a written employment contract. On January 12, 2010, the Company and its former subsidiary filed an answer denying the allegations of the complaint and asserting affirmative defenses including that neither the Company nor its former subsidiary had ever executed an employment contract with Matthew Liotta. On July 28, 2010, we entered into a Release and Settlement Agreement with the plaintiffs (the “Liotta Settlement Agreement”). Pursuant to the Liotta Settlement Agreement we agreed to issue an aggregate of 350,000 shares of Common Stock to the plaintiffs in exchange for a full release of all liabilities, damages and obligations relating to this matter as well as a dismissal of the lawsuit. The Settlement Agreement also related to the litigation described below regarding the former One Ring shareholders. equipment:

~~Former~~Property ~~One~~and ~~Ring~~equipment ~~Networks~~are ~~Shareholders~~stated ~~Litigation~~at ~~Five~~cost ofless ~~the~~accumulated 11depreciation ~~former~~and ~~shareholders of One Ring Networks, Inc~~amortization., aDepreciation ~~former subsidiary~~ of ~~the~~property ~~Company,~~and ~~filed~~equipment ais ~~lawsuit,~~calculated inusing ~~The District Court of Nebraska, against~~ the ~~Company~~straight-line ~~claiming~~method ~~that~~over the ~~earn~~estimated ~~out~~useful ~~portion~~lives of the ~~purchase~~assets ~~price~~ranging ~~due~~from three to ~~them~~seven ~~under that certain Stock Purchase Agreement between One Ring and the Company dated March 28, 2008 was incorrectly calculated and unpaid~~years. On ~~January 27,~~Expenditures ~~2010,~~for werepairs ~~filed an answer to the complaint denying the allegations of the complaint~~ and ~~asserted~~maintenance ~~affirmative~~are ~~defenses.~~charged ~~As described above, on July 28, 2010, we entered into the Settlement Agreement pursuant~~ to ~~which~~expense ~~this~~as ~~lawsuit has been dismissed~~incurred.

Wasserman, Comden, Casselman & Esensten, L.L.P. Litigation In December 2010, Wasserman, Comden, Casselman & Esensten, L.L.P. (“Wasserman”) filed an action against the Company in the Superior Court of the State of California, County of Los Angeles, Northwest District. This matter involved claims by the Company’s former attorneys for alleged breach of contract and seeks damages in the amount of $132,097.93 representing amounts invoiced to the Company for legal services previously rendered. As of January 28, 2011, the Company entered into a Settlement Agreement and Mutual Release with respect to this matter (the “Wasserman Settlement Agreement”). Pursuant to the Wasserman Settlement Agreement, we agreed to pay $75,000 to the plaintiff in exchange for a full release of all liabilities, damages and obligations relating to this matter as well as a dismissal of the lawsuit. Goodwill:

InWe ~~connection~~review ~~with~~goodwill ~~the~~arising ~~initial~~from ~~closing~~business ~~under~~combinations ~~the~~for ~~Share~~impairment ~~Exchange~~annually, ~~Agreement~~or more frequently if impairment indicators arise. Impairment indicators include (~~described~~i) ~~above~~a significant decrease in the market value of an asset, (ii) a significant change in the extent or manner in which an asset is used or a significant physical change in an asset, ~~our~~(iii) ~~former~~a ~~subsidiary~~significant ~~Telenational Communications~~adverse ~~Inc.~~change ~~agreed~~in tolegal ~~indemnify~~factors ~~and~~or ~~hold~~in usthe ~~harmless~~business ~~from~~climate ~~all~~that ~~liabilities~~could affect the value of ~~Telenational~~an ~~and~~asset ~~One~~or ~~Ring~~an ~~including~~adverse ~~any~~action ~~claims~~by a regulator, ~~losses~~and (iv) a current period operating or ~~damages~~cash ~~arising~~flow ~~from~~loss combined with a history of operating or ~~relating~~cash toflow losses or a projection or forecast that demonstrates continuing losses associated with an asset used for the ~~legal~~purpose ~~proceedings~~of ~~described~~producing ~~above~~revenue.

InSegment addition to the above, from time to time, we are periodically a party to or otherwise involved in legal proceedings arising in the normal and ordinary course of business. Other than as described above, as of the date of this Annual Report, management does not believe that there is any proceeding threatened or pending against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position. information:

~~ITEM~~We 4acquired Spot Mobile Corp on June 6, 2010 and began operating in two segments on that date; our Mr. ~~REMOVED~~Prepaid ~~AND~~retail ~~RESERVED~~segment which markets and distributes electronic prepaid telecommunication products through independent retailers; and our Spot Mobile Corp MVNO offering prepaid mobile telephones and SIM cards and airtime utilizing our telecommunications assets. These two segments are reviewed on a regular basis by our chief operating decision makers. All of our operations are in the United States and no customers are individually material to our operations.

~~PART~~Long-lived II assets:

~~ITEM~~Long-lived 5assets, including our customer lists and intellectual property arising from business combinations, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. ~~MARKET~~We ~~FOR~~do ~~REGISTRANT’S~~not ~~COMMON~~perform ~~EQUITY~~a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment include a significant decline in the observable market value of an asset, ~~RELATED~~a ~~STOCKHOLDER~~significant ~~MATTERS~~change ~~AND~~in ~~ISSUER~~the ~~PURCHASES~~extent OFor ~~EQUITY~~manner ~~SECURITIES~~in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if an impairment is indicated by its carrying value not being recoverable through undiscounted cash flows. The impairment loss is the difference between the carrying amount and the fair value of the asset estimated using discounted cash flows. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell.

~~Market~~During ~~Information~~2011 and 2010, we completed goodwill and long-lived asset impairment analyses. Based on the work performed, our management concluded that an impairment loss existed. Accordingly, we recorded non-cash impairment charges for goodwill and intangible assets of $300,000 in 2011 and $200,000 in 2010. The impairment charges resulted primarily from the general economic downturn in the U.S. and from a decline in the customer base. Our management estimated the impairment charges by cash flow analyses and by consideration of current market conditions and transactions in the prepaid telecommunications industry.

~~There is~~Fair avalue ~~limited public market for the shares~~ of ~~our~~financial common stock and there can be no assurance that a liquid market for our common stock will ever develop. Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions. Consequently, our shareholders may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time. instruments:

~~Our~~The ~~common~~carrying ~~stock~~amount isof ~~quoted~~financial oninstruments ~~the~~included ~~OTCBB~~in ~~under~~current ~~the~~assets ~~symbol~~and ~~“RPID.”~~liabilities ~~The~~and ~~range~~long-term ofdebt ~~closing~~is ~~prices~~not ~~for~~materially ~~our~~different ~~common~~from ~~stock,~~fair asvalue ~~reported on~~because of the ~~OTCBB~~short ~~during~~maturity ~~each~~of ~~quarter~~the ~~since~~instruments ~~October~~and/or ~~2009~~their ~~was~~respective asinterest ~~follows.~~rate ~~These~~amounts ~~quotations~~and ~~are~~other ~~adjusted~~terms ~~for~~have ~~our~~been ~~Reverse~~negotiated ~~Stock~~recently. ~~Split~~The fair value of related party notes and ~~reflect~~advances ~~inter-dealer~~payable ~~prices,~~are ~~without~~not ~~retail~~practicable ~~mark-up,~~to ~~mark-down~~estimate ordue ~~commission~~to ~~and~~the ~~may~~related ~~not~~party ~~represent~~nature ~~actual~~of the underlying transactions.

16 17

~~Table~~Income ~~of Contents~~taxes:

Quarter Ended	High		Low
October 31, 2009	$	1.20	$	0.90
January 31, 2010	$	0.90	$	0.30
April 30, 2010	$	3.30	$	1.20
July 31, 2010	$	1.80	$	1.20
October 31, 2010	$	1.50	$	0.60

We utilize the asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes and liabilities are computed for differences between the financial statement carrying amounts and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are recorded when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. For the years ended October 31, 2011 and 2010, the Company did not record any income tax benefit, because management does not believe realization of such related deferred income tax assets is more likely than not.

OnRecent ~~January 31, 2011,~~accounting ~~our common stock had a closing price of $0.72.~~ pronouncements:

~~Holders~~In October 2009, the FASB issued a new accounting standard which provides guidance for arrangements with multiple deliverables. Specifically, the new standard requires an entity to allocate consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices. In the absence of the vendor-specific objective evidence or third-party evidence of the selling prices, consideration must be allocated to the deliverables based on our management’s best estimate of the selling prices. In addition, the new standard eliminates the use of the residual method of allocation. In October 2009, the FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software and hardware elements. Specifically, tangible products containing software and hardware that function together to deliver the tangible products’ essential functionality are scoped out of the existing software revenue recognition guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards were effective for the Company in the first quarter of 2011 and the adoption of these standards did not have a material impact on its consolidated financial statements.

AsIn September 2011, the FASB issued amended standards to allow for the option to first perform a qualitative assessment as to whether goodwill impairment indicators exist before undertaking the existing two-step test. The objective of ~~February 1~~the qualitative assessment is to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is more likely than not, the two-step test must still be performed. The amended standards are intended to reduce costs of evaluating annual goodwill impairment. These amended standards are to be applied for annual periods beginning after December 15, 2011 (November 1, ~~there~~2012 ~~were~~for ~~approximately~~the ~~562~~Company). ~~security~~The ~~holders~~adoption of ~~record~~this ofstandard ~~our~~is ~~common~~not ~~stock.~~expected to have a material impact on the Company’s consolidated financial statements.

~~Transfer~~Results ~~Agent~~of ~~and Registrant~~ Operations

~~Our~~Comparison ~~transfer~~of ~~agent~~the isFiscal ~~Securities~~Year ~~Transfer Corporation,~~Ended ~~located~~October ~~at 2591 Dallas Parkway~~31, ~~Suite~~2011 ~~120,~~to ~~Frisco,~~the ~~Texas~~Fiscal ~~75034.~~Year ~~Their~~Ended ~~phone~~October ~~number~~31, ~~is 469-633-0101.~~ 2010

~~Dividend~~Operating ~~Policy~~ Revenues

~~Holders~~Revenues offor ~~our~~the ~~common~~fiscal ~~stock~~year ~~are~~ended ~~entitled~~October to31, ~~receive~~2011 ~~dividends~~decreased ~~when and if declared~~ by ~~our Board of Directors out of funds legally available. We~~$5, ~~however~~111,000, ~~have~~or ~~never~~32%, ~~paid~~as ~~any~~compared ~~cash~~to ~~dividends~~fiscal ~~and~~year ~~do not anticipate paying any cash dividends in the foreseeable future~~2010. This ~~Instead~~decrease weis ~~intend~~due to ~~retain~~greater ~~any~~competition ~~future earnings to support the development~~ and ~~growth~~lower ofmargins ~~our~~in ~~business~~Mr. ~~We may~~Prepaid, ~~consider~~resulting ~~payment of dividends at some point~~ in ~~the~~a ~~future,~~reduction ~~but the declaration~~ of ~~dividends~~stores isfrom atwhich ~~the~~we ~~discretion~~operated ofas ~~the~~some ~~Board~~ of ~~Directors,~~these ~~and~~stores ~~there~~became ~~is no assurance that dividends will be paid at any time~~unprofitable. Our ~~Board~~profit margin of ~~Directors~~a ~~will~~group ~~make~~of ~~any such~~PINs ~~future~~that ~~determination~~represents as60% ~~to the payment~~ of ~~dividends at its discretion, and its determination will depend upon~~ our ~~operating~~sales ~~results,~~has ~~financial~~been ~~condition~~reduced ~~and capital requirements~~significantly, ~~general~~due ~~business~~to ~~conditions~~lower ~~and~~discounts ~~such~~from ~~other~~our ~~factors~~supplier. Revenues ~~that~~for the ~~Board of~~2011 ~~Directors~~period ~~considers~~also ~~relevant.~~include ~~In addition~~$171,000 ~~our loan agreements with various lenders prohibit us~~ from ~~paying~~our ~~cash~~subsidiary, ~~dividends~~Spot orMobile ~~making~~Corp. ~~other~~($78,000 ~~distributions~~in on2010), ~~our~~primarily ~~common~~from ~~stock~~increased ~~without~~phone ~~prior consent~~sales.

~~ITEM~~Costs 6.of ~~SELECTED FINANCIAL DATA~~Revenues

~~Not~~Costs ~~required~~of revenues for ~~smaller~~fiscal ~~reporting~~year ~~companies~~ended October 31, 2011 decreased $4,240,000, or 26%, as compared to fiscal year 2010. The decrease in costs of revenues is consistent with reduction in revenues. Cost of revenues for 2011 period also includes $1,217,000 from our subsidiary, Spot Mobile Corp. ($189,000 in 2010), primarily from $271,000 related to switch hosting and maintenance, and from $946,000 of phone and related minutes costs .

~~ITEM~~Selling, 7.General ~~MANAGEMENT’S~~and ~~DISCUSSION~~Administrative ~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Expenses

~~Introduction~~Selling, general and administrative expenses increased $764,000, or 43%, for fiscal 2011 as compared to the prior fiscal year. This increase is primarily attributable to payroll costs of Spot Mobile Corp. of $1,549,000, and legal, accounting and other professional costs related to being a publicly reporting company of $410,000. These expenses have been reduced by cost recovered through our service fee arrangement with Yak America Inc. of $282,000.

~~The following discussion should be read in conjunction with the information contained in our audited consolidated financial statements and the related notes thereto, appearing elsewhere herein.~~ 18

~~Overview~~Depreciation and Amortization

WeDepreciation ~~are~~and ~~a telecommunications~~amortization ~~services~~expense ~~company~~increased ~~which~~$148,000 ~~through~~during ~~our~~the ~~wholly-owned~~year ~~subsidiaries,~~ended ~~provide~~October ~~prepaid~~31, ~~telecommunication~~2011 ~~and~~as ~~transaction~~compared ~~based~~to ~~point~~fiscal ~~of sale activation solutions through over 420 independent retailers in the Eastern United States~~2010. The ~~Our operations~~increase ~~are~~was ~~conducted~~ primarily ~~through~~due ~~our~~to ~~wholly-owned~~depreciation ~~subsidiaries:~~on ~~Mr. Prepaid~~the ~~and~~technology ~~Spot~~assets ~~Mobile Corp. Mr. Prepaid operates as a retail point~~ of ~~sale distributor of prepaid wireless airtime.~~ Spot Mobile Corp. ~~is a prepaid wireless MVNO. We distribute and sell prepaid wireless handsets and SIM cards~~, ~~offering~~which ~~talk,~~were ~~text~~acquired ~~and data services for wireless subscribers. Our MVNO operates~~ on ~~the~~October ~~Global~~29, ~~System for Mobile Communications (“GSM”) platform service and can offer wireless service on the AT&T and T-Mobile networks~~2010.

17 Impairment

~~Table~~Impairment expense of ~~Contents~~$300,000 was charged against goodwill during the 2011 fiscal year due to a decline in the customer base. $200,000 of goodwill impairment was recognized in the year ended October 31, 2010.

~~Critical~~Inventory ~~Accounting Policies~~ Write-down

~~This~~Inventory ~~disclosure~~carrying isvalue ~~based~~was ~~upon~~reduced ~~the~~by ~~Company’s~~approximately ~~consolidated financial statements~~$365,000 ~~which~~during ~~have~~fiscal ~~been~~2011 ~~prepared~~to inrecognize ~~accordance~~a ~~with~~reduction ~~accounting principles generally accepted~~ in the ~~United~~estimated ~~States.~~fair ~~The preparation~~value of ~~these~~inventory ~~financial~~due ~~statements~~to ~~requires~~changes ~~that~~in wetechnology ~~make estimates~~ and ~~assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities~~obsolescence. No Weinventory ~~base~~obsolescence ~~our estimates~~charge onwas ~~historical~~recorded ~~experience and other assumptions that we believe to be proper and reasonable under the circumstances. We continually evaluate the appropriateness of estimates and assumptions used~~ in the ~~preparation~~year ofended ~~its~~October ~~consolidated financial statements. Actual results could differ from those estimates. The following key accounting policies are impacted significantly by judgments~~31, ~~assumptions and estimates used in the preparation of the consolidated financial statements~~2010.

~~Use~~Interest ~~of estimates:~~ Expense

~~The~~Interest ~~preparation~~expense ofincreased ~~financial~~by ~~statements~~$227,000 inwhich ~~conformity~~relates ~~with~~to ~~accounting~~interest ~~principles~~on ~~generally accepted in the United States requires~~ our ~~management~~senior tosecured ~~make~~debt ~~estimates and assumptions that affect the reported amounts~~ of ~~assets~~$1,323,000, ~~and~~our ~~liabilities~~secured ~~and~~notes ~~disclosure~~payable of ~~contingent~~$1,175,000, ~~assets~~ and ~~liabilities at~~ the ~~date~~Spot ofMobile ~~the~~Corp. ~~financial~~secured ~~statements~~note ~~and~~payable ~~the reported amounts~~ of ~~revenues and expenses during the reporting periods~~$945,000. ~~Actual results could differ from those estimates.~~

~~Revenue~~Liquidity ~~recognition:~~and Sources of Capital

~~Revenues~~On ~~generated~~January 25, by2011, ~~prepaid~~we ~~calling~~completed ~~cards~~the ~~and~~initial ~~point~~closing of ~~sale~~the ~~activated~~Private ~~Personal~~Placement ~~Identification~~with ~~Numbers~~approximately ~~(“PINs”)~~30 Investors, pursuant to which ~~represent~~we sold to the ~~primary~~Investors ~~sources~~an aggregate of 41 Units at a purchase price of $50,000 per Unit. Each Unit is comprised of (i) 100,000 shares of our ~~revenues~~common stock; and (ii) a three-year warrant to purchase 100,000 ~~are~~shares ~~recognized~~of ascommon ~~revenue~~ stock at ~~the~~an ~~point~~exercise price of ~~sale~~$0.75 ~~Revenue~~per ~~from~~share, subject to adjustment for stock splits, stock dividends, recapitalizations and similar events. In the ~~sale~~initial closing, we sold 41 Units and received net proceeds of ~~Spot~~approximately ~~Mobile~~$1.8 ~~cellular~~million ~~air~~after ~~time~~payment isof ~~recognized~~placement ~~when~~agent ~~the~~fees ~~air~~and ~~time~~costs isrelating ~~used~~to the Private Placement. ~~Revenue~~On ~~from~~February 28, ~~sale~~2011, we completed the final closing of ~~Spot~~the ~~Mobile~~Private ~~prepaid~~Placement ~~telephones~~with isapproximately ~~recognized~~9 atInvestors, pursuant to which we sold to the ~~point~~Investors an aggregate of ~~sale.~~5 Units for net proceeds of approximately $216,000 after payment of placement agent fees and costs relating to the Private Placement.

~~Inventory:~~The total gross proceeds of the Private Placement were approximately $2.0 million (after fees and costs) and we sold an aggregate of 46 Units comprised of 4,600,000 shares of our common stock. Proceeds were used for working capital purposes.

~~Inventory consists~~As a result of ~~prepaid~~the ~~calling~~default ~~cards,~~on ~~PINs,~~our ~~cellular~~senior ~~telephones~~secured note payable and ~~SIM~~the ~~cards~~demand ~~which~~for ~~are~~the ~~valued~~repayment atof the ~~lower~~note we have a working capital deficiency of ~~cost~~$6,619,000. We are not able to repay the senior secured note and ~~net~~we ~~realizable~~do ~~value.~~not have sufficient cash to continue operations and are unable to raise necessary debt or equity without settling this matter with our senior secured lender.

~~Accounts~~As ~~receivable:~~of September 19, 2011, the Company therefore decided to suspend all retail distribution operations pending the outcome of these matters and to evaluate strategic alternatives. Our subsidiary, Spot Mobile Corp., has made arrangements to obtain limited funding while it renegotiates new carrier and network arrangements and evaluates its strategic plans.

~~Trade~~On ~~accounts~~September ~~receivable~~16, ~~are~~2011, ~~stated~~Spot atMobile ~~the~~Corp., ~~amount~~executed wea ~~expect~~Secured toPromissory ~~collect.~~Note Weevidencing ~~regularly~~a ~~monitor~~revolving ~~credit~~line ~~risk~~of ~~exposures~~credit facility in ~~accounts~~the ~~receivable and~~principal ~~maintain~~amount aof ~~general~~up ~~allowance~~to ~~for~~$3,000,000 ~~doubtful~~in ~~accounts~~favor ~~based~~of ona ~~historical~~third ~~experience~~party ~~for~~lender ~~estimated~~(the ~~losses~~“Secured ~~resulting~~Note”). The ~~from~~lender ~~the~~is ~~inability~~an affiliate of ~~our~~the ~~customers~~counter-party to ~~make required payments. We consider~~ the ~~following~~$1,175,000 ~~factors~~Blackbird ~~when~~debt ~~determining~~assumed by the ~~collectability of~~Company ~~specific~~in ~~customer accounts: customer creditworthiness~~October, ~~past~~2010. The ~~transaction~~principal ~~history~~amount ~~with~~under the ~~customer,~~Secured ~~current~~Note ~~economic~~will ~~industry~~accrue ~~trends~~interest ~~and~~at ~~changes~~the inrate ~~customer~~of ~~payment~~8.00% ~~terms~~per year. The ~~Should~~principal ~~any~~amount of ~~these~~the ~~factors~~Secured ~~change,~~Note ~~the~~and ~~estimates~~all ~~made~~accrued byinterest ~~our~~is ~~management would~~due ~~also~~on ~~change,~~demand ~~which~~upon in30 ~~turn~~days’ ~~would~~notice ~~impact~~from the ~~level~~lender. The proceeds of ~~our~~the ~~future~~Secured ~~provision~~Note ~~for~~will ~~doubtful~~be ~~accounts.~~used ~~Specifically,~~to iffinance ~~the~~Spot ~~financial~~Mobile ~~condition~~Corp.’s ofneeds ~~our~~for ~~customers~~working ~~were~~capital. Of tothe ~~deteriorate~~$3,000,000 ~~affecting~~face ~~their~~amount ~~ability~~of tothe ~~make~~Secured ~~payments~~Note, ~~additional customer-specific~~$745,000 ~~provisions~~had ~~for~~been ~~doubtful~~previously ~~accounts~~funded ~~may~~to beSpot ~~required~~Mobile Corp. Weby ~~review~~the ~~our~~lender, ~~credit~~primarily ~~policies~~in on2011 afor ~~regular~~working ~~basis~~capital ~~and~~needs. In ~~analyze~~consideration ~~the risk~~ of ~~each~~these ~~prospective~~prior ~~customer~~advances, ~~individually~~and in order to ~~minimize~~obtain ~~risk.~~additional ~~Based~~funding onfrom ~~our~~this ~~management’s~~lender, ~~assessment~~ we ~~provide~~provided security for ~~estimated~~Spot ~~uncollectible~~Mobile ~~amounts~~Corp.’s ~~through~~obligations. Accordingly, athe ~~charge~~obligations toof ~~earnings~~Spot ~~and~~Mobile aCorp. ~~credit~~under tothe aSecured ~~valuation~~Note ~~allowance.~~are ~~Interest~~secured isby ~~typically~~a ~~not~~security ~~charged~~interest onin ~~overdue~~all ~~accounts~~of ~~receivable.~~the ~~Balances~~assets ~~that~~of ~~remain~~Spot ~~outstanding~~Mobile ~~after~~Corp. weas ~~have~~well ~~used~~as ~~reasonable collection~~a ~~efforts~~pledge ~~are~~by ~~written~~the ~~off~~Company ~~through~~of aall ~~charge~~of to the ~~valuation~~capital ~~allowance~~stock ~~and~~of aSpot ~~credit~~Mobile toCorp. ~~accounts~~in ~~receivable.~~favor ~~The~~of ~~valuation~~the ~~allowance~~lender. Principal ~~was~~in ~~approximately~~the amount of $9945,000 was outstanding and ~~$64,000~~owed asto ofthe ~~October 31,~~lender ~~2010~~under ~~and~~the ~~2009~~Secured Note at October, ~~respectively.~~31, 2011.

~~Property and equipment:~~ 19

~~Property~~On ~~and~~February ~~equipment~~14, ~~are~~2012, ~~stated~~Spot atMobile ~~cost~~Corp. ~~less~~finalized ~~accumulated~~a ~~depreciation~~new carrier and ~~amortization~~network agreement. In ~~Depreciation~~anticipation of ~~property~~executing the new carrier agreement with the new carrier, and ~~equipment~~after negotiating a 180 day wind-down period with the old carrier, Spot Mobile Corp. terminated its existing carrier contract on February 9, 2012. It is ~~calculated~~ ~~using~~anticipated that the ~~straight-line~~new ~~method~~carrier ~~over~~arrangement will not be functional until the ~~estimated~~third ~~useful~~fiscal ~~lives~~quarter of 2012. To implement the ~~assets~~new ~~ranging~~carrier ~~from~~agreement, ~~three~~Spot Mobile Corp. needed to ~~seven~~secure ~~years~~further working capital commitments to finance its operations. Spot ~~Expenditures~~Mobile ~~for~~Corp. ~~repairs~~worked ~~and~~with ~~maintenance~~the ~~are~~existing ~~charged~~Secured Note lender to ~~expense~~obtain asadditional ~~incurred.~~necessary funding.

~~Goodwill:~~Concurrent with the signing of the new carrier agreement on February 14, 2012, Spot Mobile Corp, executed a Secured Convertible Note financing agreement (the “Convertible Notes”) in the principal amount of up to $2,000,000 in favor of an affiliate of the existing Secured Note lender. The Convertible Notes have a term of 24 months and outstanding principal is to accrue interest at the rate of 8.00% per year. Principal and interest owed under the Convertible Notes is convertible at any time into a combination of voting preferred and voting common shares of Spot Mobile Corp. at a conversion ratio to be fixed within 90 days of the issuance of the Convertible Notes based on the equity value of the Company, measured just prior to the issuance of the Convertible Notes, as determined by an independent business valuation. Based on the valuation, the Convertible Notes are convertible into equity constituting up to 95% of the capital stock of Spot Mobile Corp. Principal in the amount of $500,000 was outstanding and owed to the lender under the Secured Convertible Note at March 20, 2012.

~~Goodwill relates to our Mr. Prepaid operating segment.~~ The ~~Company~~Secured ~~reviews~~Note ~~goodwill~~lender ~~arising~~notified ~~from~~Spot ~~business~~Mobile ~~combinations for impairment annually, or more frequently if impairment indicators arise~~Corp. ~~Impairment~~that ~~indicators~~as ~~include (i) a significant decrease in the market value~~ of anFebruary ~~asset~~14, ~~(ii) a~~2012 ~~significant~~it ~~change~~would innot ~~the~~provide ~~extent~~additional ordebt ~~manner~~funding inunder ~~which an asset is used or a significant physical change in an asset, (iii) a significant adverse change in legal factors or in~~ the ~~business~~terms ~~climate~~of ~~that could affect~~ the ~~value~~Secured ofNote ~~an asset or an adverse action by a regulator,~~ and ~~(iv) a~~that ~~current~~all ~~period~~future ~~operating~~funding oronly ~~cash~~would ~~flow~~be ~~loss~~made ~~combined~~under ~~with~~the aterms ~~history~~ of ~~operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with an asset used for~~ the ~~purpose~~Convertible ofNote ~~producing~~financing ~~revenue~~agreement. Principal ~~The~~in ~~Company considers~~ the ~~number~~amount of ~~active~~$1,290,000 ~~stores~~was outstanding and ~~applies~~owed ato ~~fair~~the ~~market~~lender ~~value~~under ~~per store to determine~~ the ~~fair~~Secured ~~market~~Note ~~value~~at ofMarch ~~its~~20, ~~goodwill~~2012.

18Also in February 2012, a third-party warehouse that stores Spot Mobile inventory was destroyed by fire. The approximate value of the inventory destroyed as a result of the fire was $153,000 (as of October 31, 2011).

~~Table~~Overall ofCash ~~Contents~~Inflows and Outflows

~~Segment~~Our ~~information:~~operating activities used approximately $3,175,000 of cash during the twelve months ended October 31, 2011, which primarily resulted from decreased operating revenues and changes in our current assets and liabilities. Based on a negative operating cash flow during fiscal year 2011, as well as a history of negative operating cash flows, our fiscal 2011 audit report includes an explanatory paragraph indicating doubt about our ability to continue as a going concern.

~~Prior~~At to October 29 31, ~~2010~~2011, we had ~~one~~cash ~~operating segment~~ and ~~one~~cash ~~reporting~~equivalents ~~unit. For the purpose~~ of ~~identifying the reporting units (i) an operating segment is a reporting unit if discrete financial information is available~~$1, ~~(ii) management regularly reviews individual operating results~~306, ~~and~~representing ~~(iii) similar economic characteristics of components within one operating segment in~~ a ~~single~~reduction ~~reporting unit. Our management regularly reviews one set~~ of ~~financial~~approximately ~~information~~$155,000 ~~and~~from ~~all of our products share similar economic characteristics. To date, we have been developing and testing our Spot Mobile phone products. With~~ the ~~acquisition~~balance ofat ~~the technology assets on~~ October 2931, 2010,. weWe ~~began~~had ~~operating~~working incapital ~~two~~deficits ~~segments;~~at ~~(i)~~October ~~our~~31, ~~Mr.~~2011 ~~Prepaid retail segment which markets~~ and ~~distributes~~October 31, ~~electronic~~2010 ~~prepaid~~of ~~telecommunication~~approximately ~~products through independent retailers~~$6,619,000 and ~~(ii)~~$2,942,000, ~~our Spot Mobile MVNO offering prepaid mobile telephones and SIM cards and airtime utilizing our telecommunication assets~~respectively. ~~These~~This ~~two~~increase ~~segments~~in ~~are~~working ~~required~~capital ondeficit ais ~~regular~~primarily ~~basis~~attributable byto ~~our~~the ~~chief~~reclassification ~~operating~~of ~~decision~~$1,750,000 ~~makers. All~~ of our ~~operations~~long ~~are~~term indebt ~~the~~to ~~United~~current ~~States~~liability and noour ~~customers~~losses ~~are individually material~~ to ~~our operations~~date.

~~Long-lived~~We ~~assets:~~have an accumulated deficit of approximately $11,099,000 as of October 31, 2011. As described previously, we obtained financing of $2.0 million (net of fees and costs) for our then current working capital needs in connection with our January / February 2011 private placement of common stock. Our sources of revenue are not sufficient to fund operations and we have not identified other sources of capital. Our inability to obtain needed debt and/or equity financing or to generate sufficient cash from operations required us to wind down retail distribution operations as well as examine other strategic alternatives.

Long-lived assets, including our customer lists and intellectual property arising from business combinations, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverableITEM 7A. QUANTITATIVE WeAND doQUALITATIVE ~~not~~DISCLOSURES ~~perform~~ABOUT aMARKET periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if an impairment is indicated by its carrying value not being recoverable through undiscounted cash flows. The impairment loss is the difference between the carrying amount and the fair value of the asset estimated using discounted cash flows. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell. RISK

~~During~~Not ~~2010~~required and 2009, we completed goodwill and long-lived asset impairment analyses. Based on the work performed, our management concluded that an impairment loss existed. Accordingly, we recorded non-cash impairment charges for ~~goodwill~~smaller ~~and~~reporting ~~intangible assets in 2010 and in 2009~~companies. The impairment charges resulted primarily from the general economic downturn in the U.S. in 2008 and from a decline in the customer base since 2009. Our management estimated the impairment charges by cash flow analyses and by consideration of current market conditions and transactions in the prepaid telecommunications industry.

~~Fair value of financial instruments:~~ 20

The carrying amount of financial instruments included in current assets and liabilities and long-term debt is not materially different from fair value because of the short maturity of the instruments and/or their respective interest rate amounts and other terms have been negotiated recentlyITEM 8. FINANCIAL ~~The~~STATEMENTS ~~fair~~AND ~~value~~SUPPLEMENTARY ~~of related party notes and advances payable are not practicable to estimate due to the related party nature of the underlying transactions.~~ DATA

~~Income~~Index ~~taxes:~~to Consolidated Financial Statements


	Page
Report of Independent Registered Public Accounting Firm	22

Consolidated Balance Sheets at October 31, 2011 and 2010	23

Consolidated Statements of Operations for the fiscal years ended October 31, 2011 and 2010	24

Consolidated Statements of Shareholders’ Deficit for the fiscal years ended October 31, 2011 and 2010	25

Consolidated Statements of Cash Flows for the fiscal years ended October 31, 2011 and 2010	26

Notes to Consolidated Financial Statements	27

~~Recent accounting pronouncements:~~ 21

InREPORT ~~June~~OF ~~2009,~~INDEPENDENT ~~the~~REGISTERED ~~Financial~~PUBLIC ~~Accounting Standards~~ACCOUNTING Board (“FASB”) approved its Accounting Standards Codification (“Codification”) as the single source of authoritative United States accounting and reporting standards applicable for all non-governmental entities, with the exception of the SEC and its staff. The Codification, which changes the referencing of financial standards, is effective for interim or annual financial periods ending after September 15, 2009. Therefore, all references made to US GAAP now use the new Codification numbering system prescribed by the FASB. As the Codification is not intended to change or alter existing US GAAP, it did not have any impact on our financial position or results of operations. FIRM

19The Board of Directors

~~Table~~Spot ofMobile ~~Contents~~International Ltd.

InWe ~~October~~have ~~2009,~~audited the ~~FASB~~accompanying ~~issued~~consolidated abalance ~~new~~sheets ~~accounting standard which provides guidance for arrangements with multiple deliverables. Specifically, the new standard requires an entity to allocate consideration at the inception~~ of anSpot ~~arrangement~~Mobile toInternational ~~all of its deliverables based on their relative selling prices~~Ltd. In (the ~~absence~~"Company") ofas ~~the vendor-specific objective evidence or third-party evidence~~ of the selling prices, consideration must be allocated to the deliverables based on our management’s best estimate of the selling prices. In addition, the new standard eliminates the use of the residual method of allocation. In October ~~2009~~31, ~~the~~2011 ~~FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software~~ and ~~hardware elements. Specifically~~2010, ~~tangible products containing software~~ and ~~hardware that function together to deliver~~ the ~~tangible~~related ~~products’~~consolidated ~~essential~~statements ~~functionality are scoped out~~ of ~~the~~operations, ~~existing~~shareholders’ ~~software~~deficit, ~~revenue recognition guidance~~ and ~~will~~cash beflows ~~accounted~~ for ~~under~~ the ~~multiple-element~~years ~~arrangements revenue~~then ~~recognition guidance discussed above~~ended. ~~Both~~These ~~standards~~consolidated ~~will~~financial bestatements ~~effective~~are ~~for~~ the ~~Company~~responsibility inof the ~~first~~Company's ~~quarter of 2011~~management. ~~Early~~Our ~~adoption~~responsibility is ~~permitted.~~to Weexpress ~~are~~an ~~currently~~opinion ~~evaluating~~on ~~the~~these ~~impact~~consolidated ~~that~~financial ~~the~~statements ~~adoption~~based ~~of this standard may have~~ on ~~its consolidated~~our ~~financial statements~~audits.

~~Results~~We conducted our audits in accordance with the standards of ~~Operations~~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 audits provide a reasonable basis for our opinion.

~~Comparison~~In ofour opinion, the ~~Fiscal~~consolidated ~~Year~~financial ~~Ended~~statements referred to above present fairly, in all material respects, the financial position of Spot Mobile International Ltd. as of October 31, 2011 and 2010, toand the ~~Fiscal~~results ~~Year~~of ~~Ended~~their ~~October 31~~operations and their cash flows for the years then ended, ~~2009~~in conformity with accounting principles generally accepted in the United States of America.

~~Operating~~The ~~Revenues~~accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company reported a net loss of approximately $4,536,000 for the year ended October 31, 2011, and has a working capital deficiency and shareholders’ deficit of approximately $6,619,000, and $11,099,000, respectively, at October 31, 2011. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Revenues~~/s/ ~~for~~GHP ~~the fiscal year ended October 31~~HORWATH, ~~2010~~ ~~decreased by $7,665,000, or 32%, as compared to fiscal year 2009~~P. ~~This decrease is due to increased competition and lower margins resulting in our losses of stores, some of which became unprofitable~~C. Our profit margin of a group of PINs that represents 50% of our sales has been reduced significantly, due to lower discounts from our supplier. Revenues for the 2010 period also include $57,000 from our subsidiary, Spot Mobile Corp.

~~Costs~~Denver, ~~of Revenues~~ Colorado

~~Cost~~March ~~of revenue for the fiscal year ended October 31~~21, 2010 decreased by $6,933,000, or 30%, as compared to fiscal year 2009. The decrease in costs of revenues is consistent with reduction in revenues. Cost of revenues for 2010 also includes $189,000 from our subsidiary, Spot Mobile Corp., and a write-down of $210,000 related to net realizable value of our inventory of prepaid mobile phones. 2012

~~Selling, General and Administrative Expenses~~ 22

~~Selling, general and administrative expenses increased by $982,000, or 126%. General and administrative expenses for the 2010 fiscal year increased by $521,000 comprised primarily of~~ Spot Mobile ~~Corp~~International Ltd. ~~costs~~ and legal, accounting and other professional costs related to being a publicly reporting company of $461,000. We also recorded a provision for goodwill impairment in our Mr. Prepaid segment of $200,000 (2009-$300,000). Subsidiaries

~~Depreciation~~Consolidated ~~and~~Balance ~~Amortization~~ Sheets

Depreciation and amortization decreased by $7,000 for the fiscal year ended October 31, 2010 as compared to fiscal year 2009. In this respect, we recorded a loss of $5,000 on the disposal of terminal PIN machines from former customers.

ASSETS


		October 31,				October 31,
	`	2011				2010
Current assets:
Cash			$	1,306			$	156,465
Accounts receivable, net				56,759				35,738
Inventory				157,027				138,116
Prepaid expenses				1,436				-

Total current assets				216,528				330,319

Deposits				230,000				30,000
Equipment, net				1,012,319				1,204,196
Customer lists, net				62,500				212,500
Intellectual property, net				41,667				141,667
Goodwill				100,000				400,000
				1,446,486				1,988,363
Total assets			$	1,663,014			$	2,318,682


LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable and accrued liabilities			$	1,753,308			$	1,123,090
Secured notes payable				1,175,000				1,175,000
Deferred revenue				80,796				2,027
Due to related parties				958,539				871,845
Note payable				100,000				100,000
Convertible promissory note				500,000				-
Senior secured note payable				1,323,366				-
Secured note payable				945,000				-
Total current liabilities				6,836,009				3,271,962

Convertible promissory note				-				500,000
Senior secured note payable				-				1,250,000
Total liabilities				6,836,009				5,021,962

Shareholders' deficit:
Series A preferred stock				-				-
Common stock (issued and outstanding 29,253,594 and 24,153,594
shares at October 31, 2011 and 2010, respectively				29,254				24,154
Additional paid in capital				5,896,756				3,835,856
Accumulated deficit				(11,099,005	)			(6,563,290	)
Total shareholders' deficit				(5,172,995	)			(2,703,280	)
Total liabilities and shareholders' deficit			$	1,663,014			$	2,318,682

~~Interest~~The ~~Expense~~accompanying notes are an integral part of these consolidated financial statements.

~~Interest expense increased by $22,000 from fiscal year 2009, all relating to the senior secured debt we assumed under the initial closing under the Share Exchange Agreement on February 24, 2010.~~ 23

~~Liquidity~~Spot ~~and~~Mobile ~~Sources~~International ofLtd. ~~Capital~~and Subsidiaries

OnConsolidated ~~February 24,~~Statements ~~2010, we executed a Convertible Promissory Note in the principal amount~~ of $500,000 in favor of a third party lender (the “Convertible Note”). The principal amount under the Convertible Note will begin to accrue interest on February 28, 2011 at the rate of 3.00% per year with quarterly payments of interest commencing on June 1, 2011. The principal amount of the Convertible Note is due on December 31, 2011. Prior to maturity, the Convertible Note may be converted, at any time at the option of the holder, into shares of our common stock based on an initial conversion rate of $0.81 per share. Operations

	Year ended October 31,
	2011			2010

Revenue	$	10,967,486		$	16,078,063
Cost of revenue		11,779,655			16,019,588
Gross (loss) profit		(812,169	)		58,475

Operating expenses:
Selling, general and administrative expenses		2,525,006			1,760,718
Costs related to Rapid Link transaction		-			243,765
Depreciation and amortization		445,093			296,693
Inventory write-down		365,362			-
Impairment charges		300,000			200,000
Loss on legal settlements		-			970,000
		3,635,461			3,471,176
Loss from operations		(4,447,630	)		(3,412,701	)

Other income (expense):
Loss on disposal of fixed assets		-			(5,490	)
Service fee income, related party		281,074			-
Interest expense		(369,159	)		(142,223	)
		(88,085	)		(147,713	)
Net loss	$	(4,535,715	)	$	(3,560,414	)

Net loss per share - basic and diluted	$	(0.16	)	$	(0.33	)

Weighted average common number of shares outstanding		27,853,594			10,753,357

~~Table~~The accompanying notes are an integral part of ~~Contents~~these consolidated financial statements.

In July 2010, we commenced a private placement to “accredited investors” of up to 803,333 million shares of our common stock pursuant for an aggregate purchase price of $1,205,000 ($1.50 per share of common stock). For each share subscribed for in the private placement, each investor is also entitled to receive a warrant to purchase one share of our common stock at $4.50 per share and a warrant to purchase one share of our common stock at $2.70 per share. The issuance of the common stock and the warrants was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, or Regulation D promulgated thereunder. 24

OnSpot ~~January 25,~~Mobile ~~2011,~~International ~~we completed the initial closing of the Private Placement with the Investors, pursuant to which we sold to the Investors an aggregate of 41 Units at a purchase price of $50,000 per Unit~~Ltd. ~~Each Unit is comprised of (i) 100,000 shares of our common stock;~~ and (ii) a three-year warrant to purchase 100,000 shares of common stock at an exercise price of $0.75 per share, subject to adjustment for stock splits, stock dividends, recapitalizations and similar events. In the initial closing, we sold 41 Units and received net proceeds of approximately $1.8 million after payment of placement agent fees and costs relating to the Private Placement. Pursuant to the terms of the Private Placement, we may issue up to an additional 39 Units, for a total 80 Units (which the Company and the placement agent may in their sole discretion increase to 100 Units), at a price of $50,000 per Unit. The net proceeds from the Private Placement will be used to fund our ongoing operations and to provide working capital. Subsidiaries

~~Overall~~Consolidated ~~Cash~~Statement ~~Inflows~~of ~~and~~Shareholders’ ~~Outflows~~ Deficit

Our operating activities used approximately $1,430,000 of cash during the fiscal year ended October 31, 2010, which primarily resulted from decreased operating revenues, and changes in our current assets and liabilities. Based on a negative operating cash flow during fiscal year 2010, and generally a history of negative operating cash flows, our fiscal 2010 audit report includes an explanatory paragraph indicating doubt about our ability to continue as a going concern.

	Preferred stock				Common stock			Additional		Accumulated
	Shares		Amount		Shares	Amount		Paid in Capital		Deficit		Total

Balance November 1, 2009		10,000,000	$	10		$		$		$	(1,617,876)	$	(1,617,866)

Common shares deemed issued
and liabilities assumed in reverse
merger transaction					4,333,595		4,334		125,666		(1,455,000)		(1,325,000)

Conversion of preferred stock
into common stock on June 7, 2010		(10,000,000)		(10)	17,333,333		17,333		(17,323)		-		-

Conversion of secured note into					1,333,333		1,333		1,998,667		-		2,000,000
common stock

Shares issued in connections with					350,000		350		524,650		-		525,000
settlement of litigation

Shares issued under private placement					803,333		803		1,204,197		-		1,205,000

Accrued interest waived by
shareholder											70,000		70,000

Net loss											(3,560,414)		(3,560,414)

Balance, October 31, 2010		-		-	24,153,594		24,154		3,835,856		(6,563,290)		(2,703,280)

Shares issued under private placement		-		-	4,600,000		4,600		1,986,400		-		1,991,000

Shares issued for services		-		-	500,000		500		74,500		-		75,000

Net loss											(4,535,715)		(4,535,715)

Balance, October 31, 2011		-	$	-	29,253,594	$	29,254	$	5,896,756	$	(11,099,005)	$	(5,172,995)

AtThe ~~October 31,~~accompanying ~~2010,~~notes weare ~~had cash and cash equivalents of $156,000,~~ an ~~increase~~integral inpart ~~cash and cash equivalents~~ of ~~$84,000~~these ~~from~~consolidated ~~the~~financial ~~balance at October 31, 2009~~statements. We had working capital deficits at October 31, 2010 and October 31, 2009 of approximately $2,942,000 and $898,000, respectively. This increase in working capital deficit is primarily attributable to share subscriptions of $1,205,000 in July 2010 and net cash used in operations.

The consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses of approximately $3,560,000 and $713,000 during the years ended October 31, 2010 and 2009, respectively. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should we be unable to continue as a going concern. 25

~~Funding~~Spot ofMobile ~~our~~International ~~current and future anticipated operating losses, and expansion of the Company will require continuing capital investment~~Ltd. ~~Our strategy is to fund these cash requirements through debt~~ and ~~equity financing.~~ Subsidiaries

WeConsolidated ~~obtained~~Statements ~~financing in July 2010~~ of ~~$1,205,000~~Cash ~~and in January 2011 of $1,800,000 under private placements of our capital stock.~~ Flows

There can be no assurance that sufficient debt or equity financing will be available in the future or that it will be available on terms acceptable to us. Failure to obtain sufficient capital could materially affect our operations in the short term and hinder expansion strategies. We continue to explore external financing opportunities. Historically, some of our funding has been provided by our shareholders. At October 31, 2010, approximately 16% of our debt is due to some shareholders and other related parties.

	Year ended October 31,
	2011			2010

Cash flows from operating activities:
Net loss	$	(4,535,715	)	$	(3,560,414	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization expense		445,093			296,693
Accrued interest waived by shareholder		-			70,000
Shares issued for services		75,000			-
Loss on disposal of equipment		-			5,490
Inventory write-down		365,362
Loss on impairment of goodwill		300,000			200,000
Loss on legal settlements		-			525,000
Changes in operating assets and liabilities:
Accounts receivable		(21,021	)		8,800
Prepaid expenses		(1,436	)		-
Inventory		(384,273	)		194,380
Deposits		(200,000	)		(30,000	)
Accounts payable and accrued liabilities		703,583			858,423
Deferred revenue		78,769			2,027
Due to related parties		31,026			204,000

Net cash used in operating activities		(3,143,612	)		(1,225,601	)

Cash flows from investing activities:
Purchases of equipment		(3,215	)		(5,941	)

Net cash used in investing activities		(3,215	)		(5,941	)

Cash flows from financing activities:
Advances from (payments to) related parties		55,668			(389,016	)
Advances on note payable		945,000			-
Proceeds from issuance of common stock		1,991,000			1,205,000
Proceeds from convertible promissory note		-			500,000

Net cash provided by financing activities		2,991,668			1,315,984

Net (decrease) increase in cash		(155,159	)		84,442

Cash - beginning of year		156,465			72,023

Cash - end of year	$	1,306		$	156,465

Supplemental disclosure of non-cash activities:
Liabilities assumed on reverse merger transaction	$	-		$	1,325,000
Conversion of secured note into common shares	$	-		$	2,000,000
Notes payable assumed upon acquisition of technology assets	$	-		$	1,175,000
Non-cash interest added to note payable	$	73,366		$	-

~~Our~~The ~~operating~~accompanying ~~history~~notes ~~makes~~are itan ~~difficult~~integral topart ~~accurately assess our general prospects in the prepaid telecommunications industry and the effectiveness~~ of ~~our~~these ~~business~~consolidated ~~strategy. In addition, we have limited meaningful historical~~ financial ~~data upon which to forecast our future sales and operating expenses~~statements. Our future performance will also be subject to prevailing economic conditions and to financial, business and other factors. Accordingly, we cannot assure that we will successfully implement our business strategy or that our actual future cash flows from operations will be sufficient to satisfy debt obligations and working capital needs.

~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~26

~~Not~~Spot ~~required~~Mobile ~~for~~International ~~smaller reporting companies~~Ltd. and Subsidiaries

~~ITEM~~Notes 8.to ~~FINANCIAL~~Consolidated ~~STATEMENTS~~Financial ~~AND SUPPLEMENTARY DATA~~Statements

~~Index~~October to31, ~~Consolidated~~2011 ~~Financial~~and ~~Statements~~ 2010

	Page
Report of Independent Registered Public Accounting Firm		22
Consolidated Balance Sheets at October 31, 2010 and 2009		23
Consolidated Statements of Operations for the fiscal years ended October 31, 2010 and 2009		24
Consolidated Statements of Shareholders’ Deficit for the fiscal years ended October 31, 2010 and 2009		25
Consolidated Statements of Cash Flows for the fiscal years ended October 31, 2010 and 2009		26
Notes to Consolidated Financial Statements		27

1.	Organization and nature of business:

21Through its operating subsidiaries, Mr. Prepaid Inc., a Florida corporation (“Mr. Prepaid”), and Spot Mobile Corporation (“Spot Mobile”), Spot Mobile International Ltd. (the “Company” or “we” or “our”) markets and distributes electronic prepaid telecommunication products and services through independent retailers in the Eastern United States, and operates a mobile virtual network operation offering principally prepaid mobile telephones.

~~Table~~Through February 24, 2010, Mr. Prepaid was a wholly-owned subsidiary of ~~Contents~~Blackbird Corporation (“Blackbird”), a telecommunications company. On February 24, 2010, Mr. Prepaid was party to the initial closing under a Share Exchange Agreement, dated October 13, 2009, as amended by an Amendment to Share Exchange Agreements dated January 21, 2010 (collectively, the "Share Exchange Agreement"), by and among Rapid Link Corporation (“Rapid Link"), Blackbird, certain of the Rapid Link's principal shareholders, certain principal shareholders of Blackbird, and Mr. Prepaid. Pursuant to the Share Exchange Agreement, Rapid Link acquired from Blackbird all of the issued and outstanding shares of capital stock of Mr. Prepaid in exchange for 10,000,000 shares of Rapid Link's newly-created Series A Convertible Preferred Stock (the “Series A Preferred Stock”). As a result, Mr. Prepaid became a wholly-owned subsidiary of Rapid Link.

~~REPORT~~The OFSeries ~~INDEPENDENT~~A ~~REGISTERED~~Preferred ~~PUBLIC~~Stock ~~ACCOUNTING~~had ~~FIRM~~ certain rights and preferences including full voting rights. In addition, the shares of Series A Preferred Stock issued to Blackbird upon the initial closing were convertible into 17,333,333 shares of' the Company’s common stock. As a result, on an as-converted basis, these 17,333,333 shares of common stock would constitute approximately 80% of the then-issued and outstanding shares of common stock. The conversion of the Series A Preferred Stock issued to Blackbird was subject to amending the Company’s certificate of incorporation to increase the amount of shares of common stock authorized to be issued by the Company to an amount sufficient to permit the conversion of all such shares of Series A Preferred Stock, which occurred in June 2010 (Note 10). The description of the rights and preferences of the Series A Preferred Stock is qualified in its entirety by reference to the Certificate of Designations, Rights and Preferences of Series A Convertible Preferred Stock (the "Certificate of Designations").

Immediately after the initial closing, all of the outstanding capital stock of Rapid Link’s former wholly-owned subsidiaries, Telenational Communications, Inc. (“Telenational”) and One Ring Networks, Inc. (“One Ring”), was transferred to a third party. In connection with this transfer, the transferee also assumed the balance of the indebtedness due to the Lenders. The ~~Board~~transfer of ~~Directors~~Telenational and One Ring is without recourse or liability to the Company. After the transfer, and in accordance with the Share Exchange Agreement, the Company retained no significant assets of Rapid Link and assumed approximately $1,325,000 of liabilities, consisting of a $1,250,000 senior secured note payable (Note 9) and $75,000 of accrued expenses. Because all of the operating businesses of Rapid Link were transferred immediately after initial closing, the transaction was accounted for as a recapitalization of Mr. Prepaid.

~~Spot Mobile~~A ~~International~~subsequent ~~Ltd~~closing under the Share Exchange Agreement was to occur subject to the satisfaction of certain additional conditions, including obtaining consents to transfer certain telecommunications licenses from the Federal Communication Commission and state regulatory authorities. At such subsequent closing, Blackbird was to deliver to the Company all of the issued and outstanding shares of capital stock of all other Blackbird subsidiaries. Additionally, certain assets necessary to conduct the core business of Telenational, Rapid Link’s former subisidiary, were to be transferred to a wholly-owned subsidiary of the Company in exchange for the assumption by such transferee of certain indebtedness.

WeOn ~~have~~June ~~audited~~7, 2010, Blackbird notified the ~~accompanying~~Company ~~consolidated~~that ~~balance~~due ~~sheets~~to ofthe ~~Spot~~inability ~~Mobile~~of ~~International~~certain ~~Ltd.~~conditions (to the ~~“Company”)~~ asconsummation of ~~October~~subsequent 31closing to be satisfied timely, ~~2010~~the ~~and~~subsequent ~~2009~~closing could not be completed. As a result, ~~and~~Blackbird advised the ~~related~~Company ~~consolidated~~that ~~statements~~it ofwas ~~operations,~~exercising ~~shareholders’~~its ~~deficit,~~rights ~~and~~to ~~cash~~terminate ~~flows~~the ~~for~~remaining portions of the ~~years~~Share ~~then~~Exchange ~~ended.~~Agreement ~~These~~which ~~consolidated~~had ~~financial~~yet ~~statements~~to ~~are~~be performed, namely, the ~~responsibility~~subsequent closing. Accordingly, as of June 7, 2010, the ~~Company’s~~ ~~management.~~Share ~~Our~~Exchange ~~responsibility~~Agreement iswas toterminated ~~express~~with anno ~~opinion~~further onforce ~~these~~or ~~consolidated~~effect, ~~financial~~and ~~statements~~no ~~based~~assets onof ~~our~~Telenational ~~audits.~~and One Ring were transferred to the Company.

~~We conducted~~Notwithstanding ~~our audits in accordance with~~ the ~~standards~~termination of the ~~Public~~Share ~~Company~~Exchange ~~Accounting~~Agreement, ~~Oversight~~Blackbird ~~Board~~agreed ~~(United~~to ~~States).~~transfer ~~Those~~its ~~standards~~wholly-owned ~~require~~subsidiary, ~~that~~Spot weMobile, ~~plan and perform the audit~~ to ~~obtain reasonable assurance about whether~~ the ~~consolidated financial~~Company. ~~statements~~The ~~are~~merger ~~free~~ of ~~material~~Spot ~~misstatement.~~Mobile Anwith ~~audit~~the ~~includes~~Company ~~examining,~~ on aJune ~~test basis~~7, ~~evidence~~2010 ~~supporting~~was ~~the~~accounted ~~amounts~~for ~~and~~as ~~disclosures~~a inmerger ~~the~~between ~~consolidated~~companies ~~financial~~under ~~statements~~common control. The Anresults ~~audit~~of ~~also~~operations ~~includes~~of ~~assessing~~Spot ~~the~~Mobile ~~accounting principles~~are ~~used~~included ~~and~~in ~~significant~~the ~~estimates~~results ~~made~~of ~~by management, as well as evaluating~~ the ~~overall~~Company’s ~~consolidated~~operations ~~financial statement presentation. We believe that our audits provide a reasonable basis~~ for ~~our~~all ~~opinion.~~periods presented.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Spot Mobile International Ltd. as of October 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. 27

~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern~~2. Going ~~As discussed in Note 1 to the consolidated financial statements~~concern, ~~the~~recent ~~Company~~developments ~~reported a net loss of approximately $3,560,000 for the year ended October 31, 2010,~~ and ~~has~~management a working capital deficiency and shareholders’ deficit of approximately $2,942,000, and $2,703,000, respectively, at October 31, 2010. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans ~~with regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~ :

AsThe ~~discussed~~Company inis ~~Note 1~~subject to various risks in connection with the ~~consolidated~~operation ~~financial~~of ~~statements~~its business including, onamong ~~June~~other 7things, ~~2010~~(i) ~~Spot~~changes ~~Mobile~~in ~~Corp~~external competitive market factors, (ii) inability to satisfy anticipated working capital or other cash requirements. (~~“Spot~~iii) ~~Mobile”~~changes in the Company's business strategy or an inability to execute its strategy due to unanticipated changes in the market, (iv) ~~was~~various ~~merged~~competitive ~~into~~factors that may prevent the Company from competing successfully in athe ~~transaction~~marketplace, ~~between~~and ~~entities~~(v) ~~under~~the ~~common~~Company’s ~~control~~lack of liquidity and its ability to raise additional capital. The ~~consolidated~~Company ~~financial~~has ~~statements~~an ~~for~~accumulated ~~all~~deficit ~~periods presented~~of ~~were~~approximately ~~retrospectively~~$11,099,000 ~~adjusted~~as toof ~~reflect~~October 31, 2011. For the ~~operations~~fiscal ofyear ~~Spot~~ended ~~Mobile~~October 31, 2011, the Company's net loss was approximately $4,536.000 on revenues of approximately $10,967,000.

/On June 6, 2011, we received a notice from LV Administrative Services, Inc., as administrative and collateral agent for Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) (collectively, the “Creditor Parties”) under that certain Master Security Agreement, dated February 24, 2010, executed by the Company and Mr. Prepaid, our wholly-owned subsidiary, and a Secured Term Note, dated February 24, 2010, issued by the Company in favor of the Creditor Parties, that we were in default under such loan documents for failure to pay scheduled interest payments and failure to provide certain financial reports. In July 2011, we received further notices from the Creditor Parties regarding acceleration all amounts due under the Secured Note, and on July 15, 2011, the Creditor Parties filed a lawsuit against the Company and Mr. Prepaid. On December 6, 2011, the trial court issued a judgment against Spot Mobile International, Ltd. in the amount of $1,323,366, which represents the loan amount plus accrued interest (Notes 9 and 13). On February 22, 2012, the Company filed a separate suit in U.S. District Court in the Southern District of New York to assert its counterclaim of damages against the Creditor Parties, a principal of the Creditor Parties and the Company’s/ ~~GHP~~former ~~HORWATH~~CEO. The complaint alleges, Pamong other things, Breach of Contract, Breach of Fiduciary Duty and Fraud in the defendants’ actions leading up to, during and subsequent to, the 2009 reverse merger of Rapid Link, Blackbird and Mr.C Prepaid. The Company is seeking no less than $3,000,000 in damages from the defendants in the lawsuit.

~~Denver~~As a result of the default on our senior secured note payable and the demand for the repayment of the note, ~~Colorado~~we have a working capital deficiency of $6,619,000 and are not able to repay the senior secured note.

~~February~~As 15of September 19, 2011, the Company decided to suspend all retail distribution operations of our subsidiary, Spot Mobile Corp., pending the outcome of these matters and to evaluate strategic alternatives. Spot Mobile Corp., made arrangements to obtain limited funding while it attempted to renegotiate new carrier and network arrangements and to evaluate its strategic plans.

22On September 16, 2011, Spot Mobile Corp., executed a Secured Promissory Note evidencing a revolving line of credit facility in the principal amount of up to $3,000,000 in favor of a third party lender (the “Secured Note”). The lender is an affiliate of the counter-party to the $1,175,000 Blackbird debt assumed by the Company in October, 2010. The principal amount under the Secured Note accrues interest at the rate of 8.00% per year. The principal amount of the Secured Note and all accrued interest is due on demand upon 30 days’ notice from the lender. The proceeds of the Secured Note are to be used to finance Spot Mobile Corp.’s needs for working capital. Of the $3,000,000 face amount of the Secured Note, $745,000 had been previously funded to Spot Mobile Corp. by the lender, primarily in 2011 for working capital needs. In consideration of these prior advances, and in order to obtain additional funding from this lender, we provided security for Spot Mobile Corp.’s obligations. Accordingly, the obligations of Spot Mobile Corp. under the Secured Note are secured by a security interest in all of the assets of Spot Mobile Corp. as well as a pledge by the Company of all of the capital stock of Spot Mobile Corp. in favor of the lender. Principal in the amount of $945,000 was outstanding and owed to the lender under the Secured Note at October, 31, 2011.

~~Table~~On February 14, 2012, Spot Mobile Corp. finalized a new carrier and network agreement with T-Mobile USA, Inc. In anticipation of ~~Contents~~executing the new carrier agreement with the new carrier, and after negotiating a 180 day wind-down period with the old carrier, Spot Mobile Corp. terminated its existing carrier contract on February 9, 2012. It is anticipated that the new carrier arrangement will not be functional until the third fiscal quarter of 2012. To implement the new carrier agreement, Spot Mobile Corp. needed to secure further working capital commitments to finance its operations. Spot Mobile Corp. worked with the existing Secured Note lender to obtain additional necessary funding.

~~SPOT~~Concurrent ~~MOBILE~~with ~~INTERNATIONAL~~the ~~LTD~~signing of the new carrier agreement on February 14, 2012, Spot Mobile Corp, executed a Secured Convertible Note financing agreement (the “Convertible Notes”) in the principal amount of up to $2,000,000 in favor of an affiliate of the existing Secured Note lender. The Convertible Notes have a term of 24 months, and outstanding principal is to accrue interest at the rate of 8.00% per year. Principal and interest owed under the Convertible Notes is

~~CONSOLIDATED BALANCE SHEETS~~ 28

ASSETS
	October 31,2010			October 31,2009
Current assets:
Cash	$	156,465		$	72,023
Accounts receivable, net		35,738			44,538
Inventory		138,116			332,496
Total current assets		330,319			449,057
Deposits		30,000			—
Equipment, net		1,204,196			75,438
Customer lists, net		212,500			362,500
Intellectual property, net		141,667			241,667
Goodwill		400,000			600,000
		1,988,363			1,279,605
Total assets	$	2,318,682		$	1,728,662
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	1,123,090		$	189,667
Secured notes payable		1,175,000			—
Deferred revenue		2,027			—
Due to related parties		871,845			1,056,861
Note payable		100,000			100,000
Total current liabilities		3,271,962			1,346,528
Convertible promissory note		500,000			—
Senior secured note payable		1,250,000			—
Secured note payable, related party		—			2,000,000
Total liabilities		5,021,962			1,346,528
Shareholders’ deficit:
Series A preferred stock		—			10
Common stock (issued and outstanding 24,153,594 shares (2009- nil)		3,860,010			—
Accumulated deficit		(6,563,290	)		(1,617,876	)
Total shareholders’ deficit		(2,703,280	)		(1,617,866	)
Total liabilities and shareholders’ deficit	$	2,318,682		$	1,728,662

2. Going concern, recent developments and management plans (continued):

~~The~~convertible ~~accompanying~~at ~~notes~~any ~~are~~time into a combination of voting preferred and voting common shares of Spot Mobile Corp. at a conversion ratio to be fixed within 90 days of the issuance of the Convertible Notes based on the equity value of the Company, measured just prior to the issuance of the Convertible Notes, as determined by an ~~integral~~independent ~~part~~business valuation. Based on the valuation, the Convertible Notes are convertible into equity constituting up to 95% of ~~these~~the ~~financial~~capital ~~statements~~stock of Spot Mobile Corp. Principal in the amount of $500,000 was outstanding and owed to the lender under the Secured Convertible Note at March 20, 2012.

23The Secured Note lender notified Spot Mobile Corp. that as of February 14, 2012, it would not provide additional debt funding under the terms of the Secured Note and that all future funding only would be made under the terms of the Convertible Note financing agreement. Principal in the amount of $1,290,000 is outstanding and owed to the lender under the Secured Note at March 20, 2012.

~~Table~~The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred net losses of ~~Contents~~approximately $4,536,000 and $3,560,000 during the years ended October 31, 2011 and 2010, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

~~SPOT~~3. Summary ~~MOBILE~~of ~~INTERNATIONAL~~significant ~~LTD.~~accounting policies:

~~CONSOLIDATED~~Use ~~STATEMENTS~~of ~~OF OPERATIONS~~ estimates:

	Year ended October 31,
	2010			2009
Revenue	$	16,078,063		$	23,743,147
Cost of revenue		16,019,588			22,953,351
Gross profit		58,475			789,796
Operating expenses:
Selling, general and administrative expenses		1,760,718			778,362
Costs related to Rapid Link transaction		243,765			—
Amortization		296,693			304,035
Impairment charges		200,000			300,000
Loss on legal settlements		970,000			—
		3,471,176			1,382,397
Loss from operations		(3,412,701	)		(592,601	)
Other expenses:
Loss on disposal of fixed assets		5,490			—
Interest expense		142,223			120,000
		147,713			120,000
Net loss	$	(3,560,414	)	$	(712,601	)
Net loss per share - basic and diluted	$	(0.33	)	$	*
Weighted average common shares outstanding		10,753,357			—

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

* Revenue ~~Amount is less than ($0.01) per share~~recognition:

~~The~~Revenues ~~accompanying~~generated ~~notes~~by point of sale activated third party Personal Identification Numbers (“PINs”), which represent the primary sources of the Company's revenues, are anrecognized ~~integral~~as ~~part~~revenue at the point of ~~these~~sale. Revenue ~~financial~~from ~~statements~~the sale of Spot Mobile cellular air time is recognized when air time is used. Revenue from sale of Spot Mobile prepaid telephones is recognized at the point of sale.

24 Inventory:

~~Table~~Inventory consists of ~~Contents~~prepaid calling cards and point of sale activated PINs, and cellular phones and SIM cards, held for resale, which are valued at the lower of cost or net realizable value. Inventory carrying value was reduced by approximately $365,000 during fiscal 2011 to recognize an impairment of inventory due to changes in technology and obsolescence. No inventory obsolescence charge was recorded in the year ended October 31, 2010.

~~SPOT~~Also ~~MOBILE~~in ~~INTERNATIONAL~~February ~~LTD~~2012, a third-party warehouse that stores Spot Mobile inventory was destroyed by fire. The approximate value of the inventory destroyed as a result of the fire was $153,000 (as of October 31, 2011).

~~CONSOLIDATED~~Accounts ~~STATEMENTS OF SHAREHOLDERS’ DEFICIT~~ receivable:

	Preferred stock						Common stock				Additional			Accumulated
	Shares			Amount			Shares		Amount		Paid in Capital			Deficit			Total
Balance, November 1, 2008		10,000,000		$	10			—	$	—	$	—		$	(1,025,275	)	$	(1,025,265	)
Accrued interest waived by shareholder															120,000			120,000
Net loss															(712,601	)		(712,601	)
Balance October 31, 2009		10,000,000			10										(1,617,876	)		(1,617,866	)
Common shares deemed issued and liabilities assumed in reverse merger transaction								4,333,595		130,000					(1,455,000	)		(1,325,000	)
Conversion of preferred stock into common stock on June 7, 2010		(10,000,000	)		(10	)		17,333,333		520,000		(519,990	)		—			—
Conversion of secured note into common stock								1,333,333		40,000		1,960,000			—			2,000,000
Shares issued in connections with settlement of litigation								350,000		105,000		420,000			—			525,000
Shares issued under private placement								803,333		24,100		1,180,900			—			1,205,000
Accrued interest waived by shareholder															70,000			70,000
Net loss															(3,560,414	)		(3,560,414	)
Balance, October 31, 2010		—		$	—			24,153,594	$	819,100	$	3,040,910		$	(6,563,290	)	$	(2,703,280	)

Trade accounts receivable are stated at the amount the Company expects to collect. The Company regularly monitors credit risk exposures in accounts receivable and maintains a general allowance for doubtful accounts based on historical experience for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer payment terms. Should any of these factors change, the estimates made by management would also change, which in turn

~~The accompanying notes are an integral part of these financial statements.~~ 29

253. Summary of significant accounting policies (continued):

~~Table~~would impact the level of ~~Contents~~the Company's future provision for doubtful accounts. Specifically, if the financial condition of the Company's customers were to deteriorate, affecting their ability provisions for doubtful accounts may be required. The Company reviews its credit policies on a regular basis and analyzes the risk of each prospective customer individually in order to minimize risk. Based on management's assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Interest is typically not charged on overdue accounts receivable. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The valuation allowance was approximately $51,000 and $9,000 as of October 31, 2011 and 2010, respectively.

~~SPOT MOBILE INTERNATIONAL LTD.~~ Equipment:

~~CONSOLIDATED~~Equipment ~~STATEMENTS~~is OFstated ~~CASH~~at ~~FLOWS~~cost less accumulated depreciation and amortization. Depreciation of office and computer equipment, furniture and fixtures and point of sale activation terminals is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Telecommunication switching systems are depreciated on the straight-line method over seven years. Expenditures for repairs and maintenance are charged to expense as incurred.

	Year ended October 31,
	2010			2009
Cash flows from operating activities:
Net loss	$	(3,560,414	)	$	(712,601	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense		296,693			304,035
Accrued interest waived by shareholder		70,000			120,000
Loss on impairment of goodwill		200,000			300,000
Loss on disposal of fixed assets		5,490			—
Non-cash loss on legal settlements		525,000			—
Changes in operating assets and liabilities:		—
Accounts receivable		8,800			18,224
Inventory		194,380			(219,393	)
Deposits		(30,000	)		—
Accounts payable and accrued liabilities		858,423			4,024
Deferred revenue		2,027			—
Net cash used in operating activities		(1,429,601	)		(185,711	)
Cash flows from investing activities:
Purchases of equipment		(5,941	)		(41,451	)
Net cash used in investing activities		(5,941	)		(41,451	)
Cash flows from financing activities:
Advances to related parties		(185,016	)		375,964
Payments on note payable		—			(100,000	)
Proceeds from issurance of common stock		1,205,000			—
Proceeds from convertible promissory note		500,000			—
Net cash provided by financing activities		1,519,984			275,964
Net Increase in cash		84,442			48,802
Cash - beginning of year		72,023			23,221
Cash - end of year	$	156,465		$	72,023
Supplemental disclosure of non-cash activities:
Liabilities assumed on reverse merger transaction	$	1,325,000			—
Conversion of secured note into common shares	$	2,000,000			—
Notes payable assumed upon acquisition of technology assets	$	1,175,000			—

Goodwill:

Goodwill relates to the Mr. Prepaid operations. The ~~accompanying~~Company ~~notes~~reviews ~~are~~goodwill arising from business combinations for impairment annually in the fourth quarter, or more frequently if impairment indicators arise. Impairment indicators include (i) a significant decrease in the market value of an ~~integral~~asset ~~part~~(ii) a significant change in the extent or manner in which an asset is used or a significant physical change in an asset, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of ~~these~~an ~~financial~~asset ~~statements~~or an adverse action by a regulator, and (iv) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with an asset used for the purpose of producing revenue. The Company considers the number of active stores and applies a fair market value per store to determine the fair value of its goodwill.

26Net loss per share:

~~Table~~Basic net loss per share is computed by dividing the net loss applicable to common stockholders by the weighted-average number of ~~Contents~~shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if the preferred shares were converted into common stock. For each of the years presented, the effect of the inclusion of the dilutive shares (including 6,147,095 and 1,430,428 and common shares as of October 31, 2011 and 2010, respectively, issued under outstanding warrants, and 617,283 and 617,283 common shares as of October 31, 2011 and 2010, respectively, issuable under convertible debt and equity instruments) in which would have resulted in a decrease in loss per share and have been excluded from the calculation of diluted loss per common share.

~~SPOT~~Long-lived ~~MOBILE INTERNATIONAL LTD.~~ assets:

~~NOTES~~Long-lived TOassets, ~~CONSOLIDATED~~including ~~FINANCIAL~~the ~~STATEMENTS~~Company's customer lists and intellectual property related to the Mr. Prepaid operations, arising from business combinations, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does not perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if an impairment is indicated by its carrying value not being recoverable through undiscounted cash flows. The impairment loss is the difference between the carrying amount and the fair value of the asset estimated using discounted cash flows. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell.

~~YEARS~~During ~~ENDED~~2011 ~~OCTOBER~~and 312010, the Company completed goodwill and long-lived asset impairment analyses. Based upon the work performed, management concluded that an impairment loss existed. Accordingly, the Company recorded non-cash impairment charges for goodwill in 2011 of $300,000 and $200,000 in 2010. ~~AND~~The ~~2009~~impairment charges resulted primarily from declines in the customer base. Management estimated the impairment charges by cash flow analyses and by consideration of current market conditions and transactions in the prepaid telecommunications industry.

~~1. Organization and nature of business:~~30

~~Through its operating subsidiaries, Mr~~3. ~~Prepaid~~ Summary ~~Inc.,~~of asignificant ~~Florida~~accounting ~~corporation,~~policies (~~“Mr. Prepaid”~~continued) and Spot Mobile Corp. (“Spot Mobile”), Spot Mobile International Ltd. (the “Company”) markets and distributes electronic prepaid telecommunication products and services through independent retailers in the Eastern United States, and operates a mobile virtual network operation offering principally prepaid mobile telephones. :

~~Through~~Fair ~~February 24,~~value ~~2010, Mr. Prepaid was a wholly-owned subsidiary~~ of ~~Blackbird~~financial Corporation (“Blackbird”), a telecommunications company. On February 24, 2010, Mr. Prepaid was party to the initial closing under a Share Exchange Agreement, dated October 13, 2009, as amended by an Amendment to Share Exchange Agreements dated January 21, 2010 (collectively, the “Share Exchange Agreement”), by and among Rapid Link Corporation (“Rapid Link”), Blackbird, certain of the Rapid Link’s principal shareholders, certain principal shareholders of Blackbird, and Mr. Prepaid. Pursuant to the Share Exchange Agreement, Rapid Link acquired from Blackbird all of the issued and outstanding shares of capital stock of Mr. Prepaid in exchange for 10,000,000 shares of Rapid Link’s newly-created Series A Convertible Preferred Stock (the “Series A Preferred Stock”). As a result, Mr. Prepaid has become a wholly-owned subsidiary of Rapid Link. instruments:

The ~~Series~~carrying Aamount ~~Preferred Stock had certain rights and preferences including full voting rights. In addition, the shares~~ of ~~Series~~financial ~~A Preferred~~instruments ~~Stock~~included ~~issued~~in tocurrent ~~Blackbird~~assets ~~upon~~and ~~the~~liabilities initial closing were convertible into 17,333,333 shares of the Company’s common stock. As a result, on an as-converted basis, these 17,333,333 shares of common stock would constitute approximately 80% of the then-issued and ~~outstanding~~debt ~~shares~~is ofnot ~~common~~materially ~~stock.~~different ~~The~~from ~~conversion~~fair ofvalue ~~the~~because ~~Series A Preferred Stock issued to Blackbird was subject to amending the Company’s certificate~~ of ~~incorporation to increase~~ the ~~amount~~short ofmaturity ~~shares~~ of ~~common stock authorized to be issued by~~ the ~~Company~~instruments toand/or antheir ~~amount~~respective ~~sufficient~~interest torate ~~permit~~amounts ~~the~~and ~~conversion~~other ofterms ~~all~~that ~~such~~have ~~shares~~been ofnegotiated ~~Series A Preferred Stock, which occurred in June 2010 (Note 10)~~recently. The ~~description~~fair ofvalue ~~the rights and preferences~~ of ~~the~~related ~~Series~~party ~~A Preferred~~notes ~~Stock~~and isadvances ~~qualified~~payable inare ~~its~~not ~~entirety~~practicable byto ~~reference~~estimate due to the ~~Certificate~~related ofparty ~~Designations,~~nature ~~Rights and Preferences~~ of ~~Series A Convertible Preferred Stock (~~the ~~“Certificate~~underlying ~~of Designations”)~~transactions.

~~Immediately~~The ~~after~~Company ~~the~~utilizes ~~initial~~a ~~closing, all of the outstanding capital stock of the Rapid Link’s former wholly~~three-~~owned~~tiered ~~subsidiaries, Telenational~~fair ~~Communications,~~value ~~Inc.~~hierarchy ~~(“Telenational”)~~that ~~and~~prioritizes ~~One~~inputs ~~Ring Networks, Inc. (“One Ring”), was transferred~~ to avaluation ~~third~~techniques ~~party.~~used Inin ~~connection~~fair ~~with~~value ~~this transfer, the transferee also assumed the balance of the indebtedness due to the Lenders~~calculations. The ~~transfer~~three oflevels ~~Telenational and One Ring is without recourse or liability to the Company. After the transfer, and in accordance with the Share Exchange Agreement, the Company retained no significant assets~~ of ~~Rapid~~inputs ~~Link~~are ~~and~~defined assumed approximately $1,325,000 of liabilities, consisting of a $1,250,000 senior secured note payable (Note 8) and $75,000 of accounts payable. Because all of the operating businesses of Rapid Link were transferred immediately after the initial closing, the transaction has been accounted for as ~~a recapitalization of Mr. Prepaid.~~ follows:

27Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

~~Table~~Level 2 of– ~~Contents~~Include other inputs that are directly or indirectly observable in the marketplace.

~~SPOT~~Level 3 ~~MOBILE~~– ~~INTERNATIONAL~~Unobservable ~~LTD.~~inputs which are supported by little or no market activity.

~~NOTES~~The TOdetermination ~~CONSOLIDATED~~of ~~FINANCIAL~~where ~~STATEMENTS~~assets ~~(CONTINUED)~~and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

~~YEAR~~The ~~ENDED~~Company's ~~OCTOBER~~financial 31assets that are measured at fair value on a recurring basis include cash, ~~2010~~which ~~AND~~is ~~2009~~classified within Level 1, as the cash consists of money market accounts which are valued using observable inputs that reflect quoted prices for identical assets.

1.Income ~~Organization and nature of business (continued)~~taxes:

AThe ~~subsequent~~Company ~~closing~~utilizes ~~under~~ the ~~Share~~asset ~~Exchange~~and ~~Agreement~~liability ~~was~~approach to ~~occur~~financial ~~subject~~accounting toand reporting for income taxes. Deferred income taxes and liabilities are computed for differences between the ~~satisfaction~~ financial statement carrying amounts and tax bases of ~~certain~~assets ~~additional~~and ~~conditions~~liabilities ~~including~~that ~~obtaining~~will ~~consents~~result toin ~~transfer~~taxable ~~certain~~or ~~telecommunications~~deductible ~~licenses~~amounts ~~from~~in the ~~Federal~~future ~~Communication~~based ~~Commission~~on enacted tax laws and ~~state~~rates ~~regulatory~~applicable ~~authorities~~to the periods in which the differences are expected to affect taxable income. AtValuation ~~such~~allowances ~~subsequent~~are ~~closing,~~recorded ~~Blackbird~~when ~~was~~necessary to ~~deliver~~ reduce deferred tax assets to the ~~Company~~amount ~~all~~expected ofto be realized. Income tax expense or benefit is the ~~issued~~tax ~~and~~payable ~~outstanding~~or ~~shares~~refundable offor ~~capital~~the ~~stock~~period ofplus ~~all~~or ~~other~~minus ~~Blackbird~~the ~~subsidiaries.~~change ~~Additionally,~~during ~~certain~~the period in deferred tax assets ~~necessary~~and toliabilities. ~~conduct~~For the ~~core~~years ~~business~~ended ofOctober ~~Telenational~~31, ~~Rapid~~2011 ~~Link’s~~and ~~former subsidiary~~2010, ~~were~~the ~~to be~~Company ~~transferred~~did tonot arecord ~~wholly-owned~~any ~~subsidiary~~income oftax ~~the~~benefit, ~~Company~~because inmanagement ~~exchange~~does ~~for~~not ~~the~~believe ~~assumption~~realization byof such ~~transferee~~related ofdeferred ~~certain~~income ~~indebtedness.~~tax assets is more likely than not.

OnSegment June 7, 2010, Blackbird notified the Company that due to the inability of certain conditions to the consummation of subsequent closing to be satisfied timely, the subsequent closing was incapable of being completed. As a result, Blackbird advised the Company that it was exercising its rights to terminate the remaining portions of the Share Exchange Agreement which had yet to be performed, namely, the subsequent closing. Accordingly, as of June 7, 2010, the Share Exchange Agreement was terminated with no further force or effect, and no assets of Telenational and One Ring were transferred to the Company. information:

~~Notwithstanding~~We ~~the~~acquired ~~termination of the Share Exchange Agreement, Blackbird agreed to transfer its wholly-owned subsidiary,~~ Spot Mobile, ~~to the Company~~Corp. ~~The merger of Spot Mobile with the Company~~ on June 7 6, 2010 ~~has~~(Note ~~been~~11) ~~accounted~~and ~~for~~began asoperating aour ~~merger~~business ~~between companies under common control. The results of operations of Spot Mobile are included~~ in ~~the~~two ~~results~~segments ofon ~~the~~that ~~Company’s~~date: ~~operations~~our ~~for all periods presented~~Mr. ~~The~~Prepaid ~~balance~~retail ~~sheet~~segment ofwhich ~~the Company~~markets ~~for~~and ~~the~~distributes ~~year~~electronic ~~ended~~prepaid ~~October 31,~~telecommunication ~~2009,~~products ~~has~~through ~~been~~independent ~~retrospectively~~retailers; ~~adjusted to eliminate the intercompany accounts of Spot Mobile,~~ and toour ~~include inventory of~~ Spot Mobile ofCorp ~~$209,000.~~MVNO ~~Spot~~segment ~~Mobile~~offering ~~had~~prepaid nomobile ~~revenues~~telephones and noSIM ~~significant~~cards ~~expenses during~~and ~~the~~airtime ~~year~~utilizing ~~ended~~our ~~October 31,~~telecommunications ~~2009~~assets. These ~~Therefore,~~two nosegments ~~other retrospective adjustments~~ are ~~included~~reviewed inon ~~the~~a ~~Company’s~~regular ~~financial~~basis ~~statements~~by ~~for~~our ~~the~~chief ~~periods~~operating ~~ended~~decision ~~October 31, 2009~~makers. All ~~For~~our ~~the~~operations ~~period~~are ~~from~~in ~~November 1,~~the ~~2009~~United ~~to June 7~~States, ~~2010,~~ ~~Spot Mobile had revenues of approximately $7,500~~ and ~~expenses~~no ofcustomers ~~$280,000.~~are ~~Spot~~individually ~~Mobile~~material is a mobile virtual network operator (MVNO) offering principally prepaid mobile telephones and airtime. Spot Mobile has recently completed network development, testing and market analysis. The Company intends to ~~commence~~our ~~full~~ operations ~~of Spot Mobile and distribute its prepaid phones beginning with its Mr~~. ~~Prepaid retail base and then through a network of wholesale distributors and sales agents.~~

~~The~~Recent ~~Company~~accounting is subject to various risks in connection with the operation of its business including, among other things, (i) changes in external competitive market factors, (ii) inability to satisfy anticipated working capital or other cash requirements, (iii) changes in the Company’s business strategy or an inability to execute its strategy due to unanticipated changes in the market, (iv) various competitive factors that may prevent the Company from competing successfully in the marketplace, and (v) the Company’s lack of liquidity and its ability to raise additional capital. The Company has an accumulated deficit of approximately $6,563,000 as of October 31, 2010. For the fiscal year ended October 31, 2010, the Company's net loss was approximately $3,560,000, on revenues of approximately $16 million. pronouncements:

28In October 2009, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard which provides guidance for arrangements with multiple deliverables. Specifically, the new standard requires an entity to allocate consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices. In the absence of the vendor-specific objective evidence or third-party evidence of the selling prices, consideration must be allocated to the deliverables based on management’s best estimate of the selling prices. In addition, the new standard eliminates the use of the residual method of allocation. In October 2009, the FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software and hardware elements. Specifically, tangible products containing software and hardware that function together to deliver the tangible products’ essential functionality are scoped out of the existing software revenue recognition guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards were effective for the Company in the first quarter of 2011 and the adoption of these standards did not have a material impact on its consolidated financial statements.

~~Table~~In September 2011, the FASB issued amended standards to allow for the option to first perform a qualitative assessment as to whether goodwill impairment indicators exist before undertaking the existing two-step test. The objective of ~~Contents~~the qualitative assessment is to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is more likely than not, the two-step test must still be performed. The amended standards are intended to reduce costs of evaluating annual goodwill impairment. These amended standards are to be applied for annual periods beginning after December 15, 2011 (November 1, 2012 for the Company). The adoption of these standards is not expected to have a material impact on the Company’s consolidated financial statements.

~~SPOT MOBILE INTERNATIONAL LTD.~~ 31

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~ 4. Equipment:

YEAR ENDED OCTOBER 31, 2010 AND 2009

	2011		2010

Computer equipment	$	6,467	$	3,251
Furniture and fixtures		3,122		3,122
Point of sale activation terminals		126,632		126,632
Telecommunications switching platform (Note 14)		1,175,000		1,175,000
		1,311,221		1,307,735
Less accumulated depreciation and amortization		298,902		103,539
	$	1,012,319	$	1,204,196

15. Goodwill ~~Organization~~ and ~~nature~~other ofintangible ~~business (continued)~~assets:

The ~~consolidated~~following ~~financial~~sets ~~statements~~forth ~~have~~information ~~been~~for ~~prepared~~intangible ~~assuming~~assets ~~the~~subject ~~Company~~to ~~will continue~~amortization ~~as a going concern. The Company has incurred net losses of approximately $3,560,000~~ and ~~$713,000~~for ~~during~~intangible ~~the~~assets years ended October 31, 2010 and 2009, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not ~~include~~subject ~~any adjustments relating~~ to ~~the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern~~amortization.

Funding of the Company’s current and future anticipated operating losses, and expansion of the Company will require continuing capital investment. The Company’s strategy is to fund these cash requirements through debt and equity financing (Note 17).

	2011			2010
Customer lists:
Gross carrying amount	$	750,000		$	750,000
Accumulated amortization		(687,500	)		(537,500	)
	$	62,500		$	212,500

		2011			2010
Intellectual property:
Gross carrying amount	$	500,000		$	500,000
Accumulated amortization		(458,333	)		(358,333	)
Unamortized intangible asset	$	41,667		$	141,667

Goodwill	$	100,000		$	400,000

~~There~~During ~~can~~2011 be no assurance that sufficient debt or equity financing will be available in the future or that it will be available on terms acceptable to the Company. Failure to obtain sufficient capital could materially affect the Company’s operations in the short term and ~~hinder expansion strategies. The Company continues to explore external financing opportunities. Historically~~2010, ~~some~~ of the Company’s ~~funding~~recorded ~~has~~goodwill ~~been~~impairment ~~provided~~charges byof ~~its~~$300,000 ~~shareholders.~~and ~~At October 31~~$200, ~~2010~~000, ~~approximately 16% of the Company’s debt is due to some shareholders and other related parties~~respectively.

~~The~~Amortization ~~Company’s operating history makes it difficult to accurately assess its general prospects in the prepaid telecommunications industry and the effectiveness~~ of ~~its~~intangibles ~~business~~is ~~strategy.~~expected ~~In addition, the Company has limited meaningful historical financial data upon which~~ to ~~forecast its future sales and operating expenses. The Company’s future performance will also~~ be ~~subject~~ ~~to prevailing economic conditions and to financial~~$104,000 ~~business~~in ~~and other factors~~2012. Accordingly, the Company cannot assure that it will successfully implement its business strategy or that its actual future cash flows from operations will be sufficient to satisfy debt obligations and working capital needs.

26. Due ~~Summary~~to ofrelated ~~significant accounting policies~~parties:

~~Use~~The amounts due to related parties represent cash advances made to the Company from other companies under common control and a Director of ~~estimates:~~the Company. These amounts are unsecured and non-interest bearing with no specific terms of repayment, and payable upon demand.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 periods7. Note ~~Actual results could differ from those estimates.~~ payable:

~~Revenue~~The ~~recognition:~~note payable with a third party is non-interest bearing and is collateralized by a priority claim on all assets of Mr. Prepaid. This note was originally due in June 2008, and extended to December 2009. The note remains unpaid and is now due on demand.

Revenues generated by point of sale activated Personal Identification Numbers (“PINs”), which represent the primary sources of the Company’s revenues, are recognized as revenue at the point of sale8. Convertible ~~Revenue~~promissory ~~from the sale of Spot Mobile cellular air time is recognized when air time is used. Revenue from sale of Spot Mobile prepaid telephones is recognized at the point of sale.~~ note:

29During the year ended October 31, 2010, the Company entered into a note with a third party that bears interest at 3% per year commencing February 28, 2011, and was due on December 31, 2011. The note may be converted at the option of the holder into common shares at a rate of $0.81 per share. The note has a standard conversion feature. As of the date of the

~~Table of Contents~~32

~~SPOT~~8. Convertible ~~MOBILE~~promissory ~~INTERNATIONAL~~note ~~LTD.~~ (continued):

~~NOTES~~transaction, TOthe ~~CONSOLIDATED~~market ~~FINANCIAL~~price ~~STATEMENTS~~of ~~(CONTINUED)~~the Company’s common stock was not in excess of the conversion price. Therefore, management determined that there was no beneficial conversion feature. The note was not converted, remains unpaid and is now due on demand.

~~YEAR~~9. Senior ~~ENDED~~secured ~~OCTOBER~~note ~~31, 2010 AND 2009~~ payable:

2Upon initial closing under the Share Exchange Agreement on February 24, 2010, the Company assumed a senior secured note payable of $1,250,000. ~~Summary~~The terms of ~~significant~~this ~~accounting~~secured ~~policies~~note provide for interest only payments monthly at the rate of 8% per year. The principal amount of $1,250,000 is due on February 28, 2013. This note is collateralized by all assets of the Company and guaranteed by Mr. Prepaid. However, as a result of the judgment and trial court judgment against us, the entire loan amount and accrued interest is classified as a current liability in the balance sheet in the amount of $1,323,366 (~~continued~~Note 13):.

~~Inventory:~~10. Secured notes payable:

~~Inventory~~On ~~consists~~October of29, ~~prepaid~~2010, ~~calling~~the ~~cards~~Company ~~and~~assumed ~~point~~certain secured indebtedness of ~~sale~~Blackbird ~~activated~~in ~~PINs~~the amount of $1,175,000 ~~and~~in ~~cellular~~exchange ~~phones~~for ~~and~~the ~~SIM~~technology ~~cards,~~assets ~~held~~acquired ~~for~~from ~~resale,~~Yak ~~which~~ America Inc. a wholly owned subsidiary of Blackbird. These notes are ~~valued~~secured atby the ~~lower~~telecommunications ofswitching ~~cost~~platform and ~~net~~are ~~realizable~~payable ~~value.~~interest only at 10% per annum and are due on demand.

~~Accounts~~On ~~receivable:~~September 16, 2011, Spot Mobile Corp., our wholly owned subsidiary, executed a Secured Promissory Note evidencing a revolving line of credit facility in the principal amount of up to $3,000,000 in favor of a third party lender (the “ Secured Note”). The lender is an affiliate of the counter-party to the $1,175,000 Blackbird debt assumed by the Company in 2010 and noted above. The principal amount under the Secured Note will accrue interest at the rate of 8.00% per year. The principal amount of the Secured Note and all accrued interest is due on demand upon 30 days’ notice from the lender. The proceeds of the Secured Note will be used to finance Spot Mobile’s Corp’s needs for working capital. Of the $3,000,000 face amount of the Secured Note, $745,000 had been previously funded to Spot Mobile Corp by the lender, primarily in fiscal 2011 for working capital needs. In consideration of these prior advances, and in order to obtain additional funding from this lender, we provided security for Spot Mobile’s Corp’s obligations. Accordingly, the obligations of Spot Mobile under the Secured Note are secured by a security interest in all of the assets of Spot Mobile Corp as well as a pledge by the Company of all of the capital stock of Spot Mobile Corp in favor of the lender. $945,000 was outstanding under the Secured Note at October 31, 2011.

~~Trade~~On ~~accounts~~November ~~receivable~~1, ~~are~~2009, ~~stated at~~ the ~~amount the~~ Company ~~expects~~had ~~to collect. The Company regularly monitors credit risk exposures in accounts receivable and maintains~~ a ~~general~~$2,000,000 ~~allowance~~note ~~for~~payable ~~doubtful accounts based on historical experience for estimated losses resulting from the inability of its customers~~ to ~~make~~a ~~required~~related ~~payments~~party. Interest ~~Management~~on ~~considers~~this ~~the~~note ~~following~~was ~~factors~~at ~~when determining~~6% ~~the~~per ~~collectability of specific customer accounts: customer creditworthiness~~annum, ~~past~~and ~~transaction~~principal ~~history with the customer, current economic industry trends~~ and ~~changes~~interest inwere ~~customer~~due ~~payment~~September ~~terms~~30, 2017. ~~Should~~The ~~any~~note ofwas ~~these~~collateralized ~~factors change, the estimates made~~ by ~~management~~all ~~would~~assets ~~also change, which in turn would impact the level~~ of the Company~~’s future provision for doubtful accounts~~. ~~Specifically,~~The iflender ~~the~~waived ~~financial~~all ~~condition~~interest of ~~the Company’s customers were to deteriorate~~$70, ~~affecting~~000 ~~their ability~~ to ~~make~~June ~~payments~~14, ~~additional~~2010 ~~customer-specific~~and ~~provisions~~$ 120,000 for ~~doubtful~~the ~~accounts~~year ~~may~~ended beOctober ~~required.~~31, 2009. The Company ~~reviews~~has ~~its~~accounted ~~credit~~for ~~policies~~this onwaived ainterest ~~regular~~as ~~basis~~a ~~and~~contribution ~~analyzes the risk~~ of ~~each~~capital ~~prospective~~from ~~customer~~the ~~individually in order to minimize risk~~shareholder. On ~~Based~~June on14, ~~management’s~~2010, ~~assessment~~ the Company ~~provides~~and ~~for~~the ~~estimated~~lender ~~uncollectible~~agreed ~~amounts~~to ~~through~~convert athe ~~charge~~note to ~~earnings~~1,333,333 ~~and~~shares aof ~~credit~~common ~~to a valuation allowance~~stock. ~~Interest~~The isconversion ~~typically~~rate ~~not~~of ~~charged~~$ ~~on overdue accounts receivable~~1.50 ~~Balances~~per ~~that~~share ~~remain~~was ~~outstanding~~consistent ~~after~~with the ~~Company~~price ~~has~~per ~~used~~share ~~reasonable~~of ~~collection efforts are written off through a charge to~~ the ~~valuation~~Company’s ~~allowance~~July ~~and a credit to accounts receivable. The valuation allowance was approximately $9,000 and $64,000 as of October 31,~~ 2010 ~~and~~private ~~2009,~~placement ~~respectively.~~(Note 11).

~~Equipment:~~11. Capital stock:

Equipment is stated at cost less accumulated depreciation and amortization. Depreciation of office and computer equipment, furniture and fixtures and point of sale activation terminals is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Telecommunication switching systems are depreciated on the straight-line method over seven years. Expenditures for repairs and maintenance are charged to expense as incurred.

	2011		2010
Authorized
Preferred stock:
Series A preferred stock, no par value; authorized 100,000,000 shares and 10,000,000 at October 31, 2011 and 2010, respectively

Common stock, $0.001 par value, authorized 1,000,000,000 shares at October 31, 2011 and 2010, respectively

Issued
29,253,594 and 24,153,594 shares of common stock at October 31, 2001 and 2010, respectively		29,254		24,154
	$	29,254	$	24,154

~~Goodwill:~~ 33

~~Goodwill~~On ~~relates~~June to7, ~~our~~2010, ~~Mr. Prepaid~~the ~~operating segment. The~~ Company’s ~~reviews~~shareholders ~~goodwill~~approved ~~arising from business combinations for impairment annually in~~ the ~~fourth~~amended ~~quarter,~~and orrestated ~~more~~certificate ~~frequently~~of ifincorporation ~~impairment~~which ~~indicators~~includes ~~arise.~~the ~~Impairment~~following ~~indicators~~amendments: ~~include~~ (i) a ~~significant~~an ~~decrease~~amendment into ~~the~~change ~~market~~our ~~value~~corporate ofname anto ~~asset~~Spot Mobile International Ltd; (ii) a ~~significant~~an ~~change~~amendment into increase the ~~extent or~~number ~~manner~~of inauthorized ~~which~~shares anof ~~asset~~our iscommon ~~used~~stock oravailable afor ~~significant~~issuance ~~physical~~from ~~change~~175,000,000 into ~~an asset~~1,000,000,000 ~~(iii) a~~and ~~significant~~to ~~adverse~~increase ~~change in legal factors or in~~ the ~~business~~number ~~climate~~of ~~that~~authorized ~~could~~shares ~~affect the value~~ of anour ~~asset~~preferred orstock anavailable ~~adverse~~for ~~action~~issuance byfrom a10,000,000 ~~regulator~~to 100,000,000; and (iviii) a ~~current~~restatement ~~period~~of ~~operating~~our orcertificate ~~cash~~of ~~flow~~incorporation ~~loss~~to ~~combined~~incorporate ~~with~~all aprior ~~history~~amendments, ofincluding ~~operating~~those ormentioned ~~cash~~above. ~~flow~~In ~~losses~~this orrespect, aeffective ~~projection~~June or7, ~~forecast~~2010, ~~that~~we ~~demonstrates~~filed ~~continuing~~our ~~losses~~amended ~~associated~~and ~~with~~restated ancertificate ~~asset~~of ~~used~~incorporation ~~for~~with the ~~purpose~~Secretary of ~~producing~~State ~~revenue~~of Delaware. ~~The Company~~Upon ~~considers~~ the ~~number~~filing of ~~active~~the ~~stores~~amended and ~~applies~~restated acertificate ~~fair~~of ~~market~~incorporation, ~~value~~all ~~per~~of ~~store~~the tooutstanding ~~determine~~shares ~~the~~of ~~fair~~our ~~value~~Series A Convertible Preferred Stock were automatically converted into 17,333,333 shares of ~~its~~our ~~goodwill.~~common stock.

30In July 2010, the Company completed a private placement of 803,333 shares of common stock at a price of $1.50 per share. Each share included a warrant for one share of common stock exercisable at $2.70 per share and a warrant for one share of common stock exercisable at $4.50 per share. These warrants were exercisable immediately and expired on October 31, 2011.

~~Table~~On October 27, 2010, the Company filed an amendment to our certificate of ~~Contents~~incorporation to effect a reverse stock split of our common stock on the basis of one post split share for every thirty pre-split shares. All references to shares and earnings per share have been retroactively restated to reflect the reverse stock split.

~~SPOT~~At ~~MOBILE~~October ~~INTERNATIONAL~~31, ~~LTD~~2010, an additional 627,095 warrants exercisable at $0.30 per share of common stock were outstanding. These warrants were issued by Rapid Link prior to the Share Exchange Agreement and have no expiration date.

~~NOTES~~On TOJanuary 25, ~~CONSOLIDATED~~2011, ~~FINANCIAL~~the ~~STATEMENTS~~Company ~~(CONTINUED)~~completed a closing of a private placement with approximately 30 accredited investors under which it sold 4,100,000 common shares at a price of $0.50 per share and received net proceeds of approximately $ 1,800,000 after payment of agent fees and costs. In addition, the Company issued 4,100,000 warrants to purchase 4,100,000 common shares at an exercise price of $ 0.75 per share until January 25, 2017. In conjunction with this placement, warrants were issued to the placement agent to purchase 410,000 common shares at an exercise price of $0.60 per share until January 25, 2016.

~~YEAR~~On ~~ENDED~~February 28, ~~OCTOBER~~2011, 31the Company completed a closing of a private placement under which the Company sold 500,000 ~~2010~~common ~~AND~~shares ~~2009~~at a price $0.50 per share and received net proceeds of $216,000 after payment of agent fees and costs. In addition, the Company issued 500,000 warrants to purchase 500,000 common shares at an exercise price of $ 0.75 per share until January 25, 2014 and 50,000 warrants to the placement agent to purchase 50,000 common shares at an exercise price of $0.60 per share until January 25, 2016.

2.On ~~Summary~~May of26, ~~significant~~2011, ~~accounting~~the ~~policies~~Company ~~(continued):~~issued 500,000 common shares for consulting services valued at $75,000.

~~Net~~At ~~loss~~October ~~per~~31, ~~share:~~2011, 6,147,095 warrants were issued and outstanding.

~~Basic net loss per share is computed by dividing the net loss applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period~~12. Related ~~Diluted~~Party net loss per share reflects the potential dilution that could occur if the preferred shares were converted into common stock. For each of the periods presented, the effect of the inclusion of the dilutive shares (including 1,430,428 and 627,095 common shares as of October 31, 2010 and 2009, respectively, issued under outstanding warrants, and 617,283 and 17,333,333 common shares as of October 31, 2010 and 2009, respectively, issuable under convertible debt and equity instruments) in which would have resulted in a decrease in loss per share and have been excluded from the calculation of diluted loss per common share. Transactions:

~~Segment~~Allocation ~~information:~~of expenses:

~~Prior~~Many tooperating ~~October 29~~expenses, ~~2010~~primarily ~~the~~salary ~~Company~~costs ~~operated~~and inrent ~~one~~of ~~segment,~~Mr. ~~however~~Prepaid, ~~with~~were ~~the~~incurred ~~acquisition~~and ofpaid ~~the~~by ~~technology assets from Yak America on October 29~~Blackbird, ~~2010~~a ~~(Note~~company ~~14)~~under wecommon ~~began~~control. In ~~operating~~accordance ~~our business~~with inSEC ~~two~~Staff ~~segments:~~Accounting ~~our~~Bulletin MrNo. ~~Prepaid~~ ~~retail~~55, ~~segment~~these ~~which~~financial ~~markets~~statements ~~and~~reflect ~~distributes~~all ~~electronic~~of ~~prepaid~~the ~~telecommunication~~costs ~~products~~associated ~~through~~with ~~independent~~the ~~retailers;~~operations ~~and~~of ~~our~~the ~~Spot~~Company. While ~~Mobile~~certain ~~MVNO~~costs ~~offering~~incurred ~~prepaid~~by ~~mobile~~Blackbird ~~telephones~~are ~~and~~directly ~~SIM~~attributable ~~cards~~to ~~and airtime~~the ~~utilizing~~Company, ~~our~~other ~~telecommunications~~costs ~~assets.~~were ~~These~~shared ~~two~~between ~~segments~~the ~~are~~two ~~reviewed on a regular basis by our chief operating decision makers~~organizations. In ~~All~~situations ~~our~~where ~~operations are in~~ the ~~United~~costs ~~States~~were ~~and~~shared, ~~no customers are individually material to our operations.~~ expense

~~Long-lived assets:~~ 34

~~Long-lived assets, including the Company’s customer lists and intellectual property related to the Mr~~12. ~~Prepaid~~ Related ~~operations,~~Party ~~arising~~Transactions from business combinations, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does not perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if an impairment is indicated by its carrying value not being recoverable through undiscounted cash flows. The impairment loss is the difference between the carrying amount and the fair value of the asset estimated using discounted cash flows. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell. (continued):

~~During~~has ~~2010~~been ~~and~~allocated ~~2009,~~between ~~the~~Blackbird ~~Company completed goodwill~~ and ~~long-lived~~Mr. ~~asset impairment analyses~~Prepaid. Management ~~Based~~believes ~~upon~~that the ~~analysis~~ ~~performed,~~methodologies ~~management~~used ~~concluded~~are ~~that~~reasonable. Salaries, antaxes ~~impairment~~and ~~loss~~benefits ~~existed~~were onallocated ~~its~~based ~~goodwill.~~upon ~~Accordingly,~~functions ~~the~~of ~~Company~~employees. Rent ~~recorded~~and ~~non-cash~~occupancy ~~impairment~~costs ~~charges~~were ~~for~~allocated ~~goodwill~~based inon ~~2010~~space ~~and 2009~~utilized. ~~The~~Total ~~impairment~~allocated ~~charges~~expenses ~~resulted~~charged ~~primarily~~to ~~from~~the ~~declines~~Company inwere ~~the customer~~approximately ~~base.~~$582,000 ~~Management~~and ~~estimated~~$204,000, for the ~~impairment~~years ~~charges~~ended byOctober ~~cash~~31, ~~flow~~2011 ~~analyses~~ and by2010, ~~consideration~~respectively. Movement of ~~current~~due ~~market~~to ~~conditions~~related ~~and~~parties ~~transactions~~balance inis ~~the~~as ~~prepaid telecommunications industry.~~ follows:

Balance at November 1, 2009	$	1,056,861

2010 allocated expenses		204,000
Advances to related parties		(389,016	)

Balance at October 31, 2010		871,845

2011 allocated expenses		582,000
Service fee income, related parties		(281,074	)
Reclassified to note payable		(269,900	)
Advance from related parties		55,668

Balance at October 31, 2011	$	958,539

~~Table~~Use of ~~Contents~~Premises:

~~SPOT~~The ~~MOBILE~~Company ~~INTERNATIONAL~~currently ~~LTD~~operates from office space leased by Yak America Inc. and leased by Cipher Networks Inc. at their monthly cost of approximately $5,000. Yak America Inc. and Cipher Networks Inc. are principally owned and controlled by Charles Zwebner, our chief executive officer.

~~NOTES~~13. Commitments TOand ~~CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~ contingencies:

~~YEAR~~On ~~ENDED~~June ~~OCTOBER~~10, 2010, Coastline Capital Partners was awarded $300,000 as its arbitration award in its proceeding against the Company. This matter related to Rapid Link and arose before the closing of the transactions contemplated by the Share Exchange Agreement. Coastline Capital Partners has since obtained a judgment in California against the Company in the amount of $434,000 inclusive of attorney fees and costs and is currently seeking to have the judgment enforced in Florida. A full provision for this amount is included in the October 31, 2010 ~~AND~~statement ~~2009~~of operations as loss on legal settlement.

2On July 28, 2010, the Company entered into a settlement agreement with Matthew Liotta and other parties in which 350,000 shares of the Company were issued. This ~~Summary~~matter related to Rapid Link and arose before closing of ~~significant~~the ~~accounting~~transactions ~~policies~~contemplated by the Share Exchange Agreement. The Company estimated the value of these shares to be approximately $525,000 (~~continued~~$0.05 per share): and a provision for this amount is included in the year ended October 31, 2010 as loss on legal settlement. As the current trading volume of the Company’s listed shares is limited, management estimated the

~~Fair~~ value of ~~financial~~the ~~instruments:~~shares based on the July 2010 private placement transaction. The settlement agreement also included a full release of all liabilities, damages and obligations relating to this matter as well as a dismissal of the lawsuit and also related to the litigation. Matthew Liotta became a Director of the Company on June 2, 2011.

The ~~carrying~~company ~~amount~~has ofreceived ~~financial~~correspondence ~~instruments~~from ~~included~~Telenational inCommunications, ~~current~~Inc., ~~assets~~a ~~and~~former ~~liabilities~~subsidiary ~~and~~of ~~long-term~~the ~~debt~~Company isregarding ~~not~~an ~~materially~~alleged ~~different from~~breach ~~fair~~by ~~value~~the ~~because~~Company of its obligations under the ~~short~~Share ~~maturity~~Exchange Agreement of ~~the~~October ~~instruments~~13, ~~and/or~~2009 ~~their~~to ~~respective~~consummate ~~interest~~a ~~rate~~subsequent ~~amounts~~closing ~~and~~which ~~other~~was ~~terms~~to ~~have~~occur ~~been~~on ~~negotiated~~June ~~recently.~~30, ~~The~~2010 ~~fair~~upon ~~value~~the satisfaction of ~~related~~certain ~~party~~conditions. ~~notes~~Under ~~and~~such ~~advances~~subsequent ~~payable~~closing, ~~are~~the ~~not~~Company ~~practicable~~was to ~~estimate due~~acquire certain assets of Telenational and assume certain indebtedness related to such assets. The company terminated the ~~related~~share ~~party~~exchange ~~nature~~agreement ofon June 7, 2010, as the ~~underlying~~Company ~~transactions~~determined that Telenational was unable to comply with its obligations under the agreement. No formal proceedings have been commenced with respect to this matter. The Company believes that it has no further obligations in this regard and that any claim is without merit and will be defended. No provision for loss, if any, has been made in these financial statements as any claim and loss cannot be determined.

~~Income taxes:~~ 35

~~The Company utilizes the asset and liability approach to financial accounting and reporting for income taxes~~13. Commitments ~~Deferred income taxes~~ and ~~liabilities~~ ~~are~~contingencies computed for differences between the financial statement carrying amounts and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are recorded when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. For the years ended October 31, 2010 and 2009, the Company did not record any income tax benefit, because management does not believe realization of such related deferred income tax assets is more likely than not. (continued):

~~Recent~~On ~~accounting~~June ~~pronouncements:~~ 6, 2011, we received a notice from LV Administrative Services, Inc., as administrative and collateral agent for Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) (collectively, the “Creditor Parties”) under that certain Master Security Agreement, dated February 24, 2010, executed by the Company and Mr. Prepaid, our wholly-owned subsidiary, and a Secured Term Note, dated February 24, 2010, issued by the Company in favor of the Creditor Parties that we were in default under such loan documents for failure to pay scheduled interest payments

Inand ~~June~~failure ~~2009,~~to ~~the~~provide ~~Financial~~certain ~~Accounting~~financial ~~Standards~~reports. ~~Board~~On ~~(“FASB”)~~July ~~approved~~12, ~~its~~2011, ~~Accounting~~we ~~Standards~~received ~~Codification (“Codification”)~~further asnotice from the ~~single~~Creditor ~~source~~Parties regarding the acceleration of ~~authoritative~~all ~~United~~amounts ~~States~~due ~~accounting~~under their senior secured note and ~~reporting~~demanding ~~standards~~payment ~~applicable~~of ~~for~~$1,323,366. On ~~all~~July ~~non-governmental~~15, ~~entities~~2011, ~~with~~the Creditor Parties filed a lawsuit against the ~~exception~~Company and Mr. Prepaid in the Supreme Court of the ~~SEC~~State of New York seeking summary judgment due to our failure to pay the amounts due under the senior secured note and ~~its~~seeking ~~staff~~to enforce their rights and remedies under our loan documents. The ~~Codification,~~Company ~~which~~filed ~~changes~~a response setting forth various defenses and counterclaims against the ~~referencing~~ ofCreditor ~~financial~~Parties. On ~~standards~~December 6, is2011, ~~effective~~the ~~for~~trial ~~interim~~court orissued ~~annual~~a ~~financial~~judgment ~~periods~~against ~~ending~~Spot ~~after~~Mobile ~~September 15~~International, ~~2009~~Ltd. ~~Therefore~~in the amount of $1,323,366, ~~all~~which ~~references~~was ~~made~~the loan amount. The Court denied the Company’s request to USallow ~~Generally~~its ~~Accepted~~claims ~~Accounting~~to ~~Principles~~proceed ~~(“GAAP”)~~in ~~now~~that ~~use~~same case as a setoff of the ~~new Codification~~loan ~~numbering~~amount, ~~system~~but ~~prescribed~~granted byleave to file the ~~FASB~~claim separately. On AsFebruary 22, 2012, the ~~Codification~~Company isfiled ~~not~~a ~~intended~~separate suit in U.S. District Court in the Southern District of New York to ~~change~~assert orits ~~alter~~counterclaim ~~existing~~of ~~US GAAP~~damages against the Creditor Parties, ita ~~did~~principal ~~not~~of ~~have~~the ~~any~~Creditor ~~impact~~Parties onand the Company’s ~~financial~~former ~~position~~CEO. The orcomplaint ~~results~~alleges, among other things, Breach of ~~operations~~Contract, Breach of Fiduciary Duty and Fraud in the defendants’ actions leading up to, during and subsequent to, the 2009 reverse merger of Rapid Link, Blackbird and Mr. Prepaid. The Company is seeking no less than $3,000,000 in damages from the defendants in the lawsuit.

InOn ~~October~~July ~~2009~~12, ~~the~~2011, ~~FASB~~an ~~issued~~interpleader acomplaint ~~new~~was ~~accounting~~filed ~~standard~~against ~~which~~the ~~provides~~Creditor ~~guidance for arrangements with multiple deliverables. Specifically~~Parties, the ~~new~~Company ~~standard~~and ~~requires~~Mr. anPrepaid, ~~entity~~among toother ~~allocate~~parties, ~~consideration~~in at the ~~inception~~Supreme Court of anthe ~~arrangement~~State ~~to all~~ of ~~its~~New ~~deliverables based on their relative selling prices~~York. In ~~the~~connection ~~absence~~with ofa ~~the~~proposed ~~vendor-specific~~settlement ~~objective evidence or third-party evidence~~ of the ~~selling~~dispute ~~prices,~~between ~~consideration~~the ~~must~~Creditor beParties ~~allocated~~and to the ~~deliverables~~Company, ~~based on management’s best estimate of~~ the ~~selling~~Company ~~prices.~~had Inpreviously ~~addition,~~delivered ~~the~~a ~~new~~good ~~standard~~faith ~~eliminates~~deposit ~~the~~in ~~use of~~ the ~~residual~~amount ~~method~~ of ~~allocation. In October 2009~~$200,000 to the ~~FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software and hardware elements~~plaintiff. Due ~~Specifically, tangible products containing software and hardware that function together~~ to ~~deliver~~ the ~~tangible~~failure ~~products’ essential functionality are scoped out~~ of the ~~existing~~parties ~~software~~to ~~revenue~~resolve ~~recognition~~the ~~guidance~~dispute, ~~and~~the ~~will~~plaintiff beplaced ~~accounted~~such ~~for~~deposit ~~under~~with the ~~multiple-element~~court ~~arrangements~~pursuant ~~revenue~~to ~~recognition~~the ~~guidance~~interpleader ~~discussed above~~action. The ~~Both standards will be effective for the~~ Company inhas ~~the~~filed ~~first~~a ~~quarter~~response ofsetting ~~2011.~~forth ~~Early~~various ~~adoption is permitted~~defenses. This ~~The~~matter ~~Company~~ is ~~currently~~ongoing ~~evaluating~~pending ~~the~~a ~~impact~~resolution ~~that~~of the ~~adoption~~LV ofAdministrative ~~this~~Services, ~~standard~~Inc. ~~may~~lawsuit ~~have~~described ~~on its consolidated financial statements~~above.

32In November 2011, John Jenkins (“Jenkins”) filed an action against the Company’s directors, as individuals, in U.S. District Court in the Central District of California. The Company was not named as a defendant in the complaint. This matter involves claims by the Company’s former Chairman and CEO for alleged intentional interference with contract, fraud and unfair competition related to a share lock-up agreement that was executed between Jenkins and the Company in February 2010. Claimant seeks the unrestricted ability to transfer/sell his equity shares in the Company and unspecified damages. An amended complaint was received on January 19, 2012. The Company’s directors believe the lawsuit is without merit and on February 15, 2012 we filed a defense and a Motion to Dismiss the claim. No provision for loss, if any, has been made in these financial statements as any claim and loss cannot be determined.

~~Table~~14. Telecommunications ofSwitching ~~Contents~~Platform:

~~SPOT~~Until ~~MOBILE~~October ~~INTERNATIONAL~~29, ~~LTD~~2010, Spot Mobile had an agreement to utilize a telecommunications switching platform ("technology assets” or, "the platform") to rout its calls and in connection with its cellular business. The agreement was with, and the platform was owned by Yak America, Inc., an entity controlled by the Company's CEO and majority shareholder.

~~NOTES~~On TOOctober ~~CONSOLIDATED~~29, ~~FINANCIAL~~2010, ~~STATEMENTS~~the Company acquired these technology assets from Yak. These technology assets had an historical carrying cost to Yak of $1,175,000, and Spot Mobile acquired the technology assets in exchange for Spot Mobile's assumption of certain secured indebtedness of Yak's parent, Blackbird, in the amount of $1,175,000 (~~CONTINUED~~Note 10). The Company determined that there were no indications of impairment of the historical carrying costs of the technology assets as of October 31, 2011. Spot Mobile plans to use the platform's capacity to offer mobile virtual network services. Spot Mobile has entered into an agreement with Yak whereby Yak will be able to use any excess capacity not utilized by the Company.

~~YEAR ENDED OCTOBER 31, 2010 AND 2009~~ 36

314. Telecommunications ~~Equipment~~Switching Platform (continued):

	2010		2009
Computer equipment	$	3,251	$	1,775
Furniture and fixtures		3,122		2,106
Point of sale activation terminals		126,362		170,434
Telecommunications switching platform (Note 14)		1,175,000		—
		1,307,735		174,315
Less accumulated depreciation and amortization		103,539		98,877
	$	1,204,196	$	75,438

The Company did not acquire any of Yak's business operations related to the technology assets, including any customers or revenues, or any of Yak's receivables, payables or employees related to the technology assets acquired. Effective November 1, 2010, Yak is entitled to use the platform until June 20, 2012 for a service fee equal to 8% of Yak's net revenue from the use off the platform for its customers ($281,000 in 2011). Based upon Yak's historical use of the technology assets, these service fees are not expected to be significant to the Company's 2012 consolidated financial statements.

415. Income ~~Goodwill and other intangible assets~~Taxes:

~~The~~At ~~following~~October ~~sets~~31, ~~forth~~2011, ~~information~~the ~~for~~Company ~~intangible~~has ~~assets~~U.S. ~~subject~~net tooperating ~~amortization~~loss ~~and~~carry forwards for ~~intangible~~federal ~~assets~~income ~~not~~tax purposes of approximately $ 39 million (2010 - $ 35 million), which expire in 2012 through 2031. The tax effect of these carry forwards is approximately $ 15 million (2010- $ 17 million), which represents the Company's only significant deferred tax asset. Utilization of U.S. net operating losses is subject to ~~amortization~~annual limitations provided for the Internal Revenue Code. The annual limitation may also result in the expiration of net operating losses before utilization.

	2010			2009
Customer lists:
Gross carrying amount	$	750,000		$	750,000
Accumulated amortization		(537,500	)		(387,500	)
	$	212,500		$	362,500
	2010			2009
Intellectual property:
Gross carrying amount	$	500,000		$	500,000
Accumulated amortization		(358,333	)		(258,333	)
	$	141,667		$	241,667
Unamortized intangible asset
Goodwill	$	400,000		$	600,000

During 2011, $1 million of losses expired ($11 million in 2010). The effective tax rate does not equal the statutory tax rate due to our losses. Realization of tax benefits depends on having sufficient taxable income within the carry back and carry forward periods. The Company continually reviews the adequacy of the valuation allowance and recognizes these

~~During~~benefits ~~2010~~as reassessments indicates that it is more likely than not that the ~~Company~~benefits ~~recorded~~will anbe ~~impairment~~realized. Based ~~charge~~on ofpretax ~~$200,000~~losses ~~(2009~~incurred -in ~~$300~~prior years,~~000).~~ management has established a valuation allowance against the entire net deferred asset balance.

~~Amortization of intangibles is expected to be $250,000 and $104,000 in years 2011 and 2012 respectively~~16. Segment Information

33Prior to October 29, 2010, the Company operated in one segment, however, with the acquisition of the technology assets from Yak America on October 29, 2010 we began operating our business in two segments: Mr. Prepaid and Spot Mobile Corp. The Mr. Prepaid segment markets and distributes electronic prepaid telecommunication products through independent retailers. The Spot Mobile Corp MVNO segment offers prepaid mobile telephones, SIM cards and airtime utilizing our telecommunication assets. The operations of our segments are managed separately and each has unique technology and services. Relevant segment financial information is as follows:

	October 31, 2011			October 31, 2010
Spot Mobile Corp.:
Revenue		171,000			57,000
Gross Loss		(1,046,000	)		(163,000	)
Loss from Operations		(2,805,000	)		(875,000	)
Interest Expense		133,000			-
Amortization & Impairment		534,000			-
Segment Assets		1,236,000			1,310,000
Mr. Prepaid:
Revenue		10,797,000			16,021,000
Gross Profit		234,000			432,000
Loss from Operations		(715,000	)		(766,000	)
Amortization & Impairment		576,000			496,000
Segment Assets		227,000			1,009,000
Spot Mobile International (Corporate):
Loss from Operations		(928,000	)		(1,772,000	)
Interest Expense		236,000			142,223
Segment Assets		200,000			-
Company totals:
Revenue		10,968,000			16,078,000
Gross Loss		(812,000	)		269,000
Loss from Operations		(4,448,000	)		(3,413,000	)
Interest Expense		369,000			142,223
Amortization & Impairment		1,110,000			496,000
Segment Assets		1,663,000			2,319,000

~~SPOT MOBILE INTERNATIONAL LTD.~~ 37

~~NOTES~~17. Subsequent ~~TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~ Event:

~~YEAR~~ On ~~ENDED~~February ~~OCTOBER~~14, 312012, ~~2010~~Spot ~~AND~~Mobile ~~2009~~Corp. finalized a new carrier and network agreement. In anticipation of executing the agreement with the new carrier, and after negotiating a 180 day wind-down period with the old carrier, Spot Mobile Corp. terminated its existing carrier contract on February 9, 2012. It is anticipated that the new carrier arrangement will not be functional until the third quarter of 2012. To implement the new carrier agreement, Spot Mobile Corp. needed to secure further working capital commitments to finance its operations. Spot Mobile Corp. worked with the existing Secured Note lender to obtain additional necessary funding.

5Concurrent with the signing of the new carrier agreement on February 14, 2012, Spot Mobile Corp, executed a Secured Convertible Note financing agreement (the “Convertible Notes”) in the principal amount of up to $2,000,000 in favor of an affiliate of the existing Secured Note lender. The ~~Due~~Convertible Notes have a term of 24 months and outstanding principal is to ~~related~~accrue ~~parties:~~interest at the rate of 8.00% per year. Principal and interest owed under the Convertible Notes is convertible at any time into a combination of voting preferred and voting common shares of Spot Mobile Corp. at a conversion ratio to be fixed within 90 days of the issuance of the Convertible Notes based on the equity value of the Company, measured just prior to the issuance of the Convertible Notes, as determined by an independent business valuation. Based on the valuation, the Convertible Notes are convertible into equity constituting up to 95% of the capital stock of Spot Mobile Corp. Principal in the amount of $500,000 was outstanding and owed to the lender under the Secured Convertible Note at March 20, 2012.

The ~~amounts~~Secured ~~due~~Note tolender ~~related~~notified ~~parties~~Spot ~~represent~~Mobile ~~cash~~Corp. ~~advances~~that ~~made~~as toof ~~the~~February ~~Company~~14, ~~from~~2012 ~~other~~it ~~companies~~would ~~under~~not ~~common~~provide ~~control~~additional ~~and~~debt afunding ~~Director. These~~under ~~amounts~~the ~~are~~terms ~~unsecured~~of the Secured Note and ~~non-interest~~that ~~bearing~~all ~~with~~future nofunding ~~specific~~only would be made under the terms of ~~repayment~~the Convertible Note financing agreement. Principal in the amount of $1,290,000 was outstanding and ~~payable~~owed ~~upon~~to ~~demand.~~the lender under the Secured Note at March 20, 2012.

6ITEM 9. CHANGES ~~Note~~IN ~~payable:~~AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~The note payable with a third party is non-interest bearing and is secured by a priority claim on all assets of the Company~~None. ~~This note was originally due in June 2008, and extended to December 2009. The note remains unpaid and is now due on demand.~~

7ITEM 9A. CONTROLS ~~Convertible~~AND ~~promissory note:~~PROCEDURES

During the year ended October 31, 2010, the Company entered into a note with a third party that bears interest at 3% per year commencing February 28, 2011, and is due on December 31, 2011. Prior to maturity, the note may be converted at the option of the holder into common shares at a rate of $0.81 per share. The note has a standard conversion feature. As the date of the transaction, the market price of the CompanyManagement’s ~~common stock~~Evaluation ~~was not in excess~~ of ~~the~~Disclosure ~~conversion~~Controls ~~price.~~and ~~Therefore, management determined that there was no beneficial conversion feature.~~ Procedures

8As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and our interim chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). In ~~Senior~~designing ~~secured~~and ~~note~~evaluating ~~payable:~~its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated can provide only reasonable, but not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based upon that evaluation, management concluded that our disclosure controls and procedures were ineffective as of the end of the period covered in this report because of the material weakness in internal controls over financial reporting described below.

~~Upon~~A ~~initial~~material ~~closing~~weakness ~~under~~is ~~the~~a ~~Share~~control ~~Exchange~~deficiency, ~~Agreement~~or oncombination ~~February 24,~~of ~~2010~~control deficiencies, ~~the~~that ~~Company~~results ~~assumed~~in amore ~~senior~~than ~~secured~~a ~~note~~remote ~~payable~~likelihood ofthat ~~$1,250,000.~~a ~~The~~material ~~terms~~misstatement of ~~this~~the ~~secured~~annual ~~note~~or ~~provide~~interim ~~for~~consolidated ~~interest~~financial ~~only payments~~statements ~~monthly~~will atnot ~~the~~be ~~rate~~prevented ofor ~~8% per year~~detected. ~~The~~Management ~~principal~~identified ~~amount~~the offollowing ~~$1,250,000~~control isdeficiencies ~~due~~which onrepresent ~~February 28,~~material ~~2013.~~weaknesses ~~This~~in ~~note~~our isinternal ~~collateralized~~control byover ~~all~~financial ~~assets of the Company.~~ reporting:

9.● ~~Secured~~We ~~notes~~did ~~payable:~~not maintain a sufficient depth of personnel with clearly delineated and fully documented responsibilities and with an appropriate level of accounting expertise.

On October 29, 2010, the Company assumed certain secured indebtedness of Blackbird in the amount of $ 1,175,000 in exchange for the technology assets acquired from Yak America Inc. a wholly owned subsidiary of Blackbird. These notes are secured by the telecommunications switching platform and are payable interest only at 10% per annum and are due on demand. 38

~~10.~~● ~~Secured~~We ~~note~~have ~~payable,~~insufficient ~~related~~documented ~~party:~~procedures to identify and prepare a conclusion on matters involving material accounting issues and to independently review conclusions as to the application of generally accepted accounting principles.

On● ~~November 1,~~We ~~2009,~~did ~~the~~not ~~Company~~have ~~had~~sufficient aentity ~~$2,000,000~~level ~~note~~controls ~~payable~~at toour ~~Blackbird~~subsidiaries. ~~Interest~~These onweaknesses ~~this~~included: ~~note~~lack ~~was~~of atsufficient ~~6% per~~formalized ~~annum,~~and consistent finance and ~~was~~accounting ~~due~~policies ~~September 30,~~and ~~2017.~~procedures; ~~The~~lack ~~note~~of ~~was~~adequate ~~collateralized~~communication byand ~~all assets~~division of ~~the~~employees’ ~~Company.~~duties ~~Blackbird~~which ~~waived~~includes ~~all~~the ~~interest~~lack of ~~$70,000~~delegation toof ~~June 14,~~authority ~~2010~~guidelines; ~~and~~authority $granted ~~120,000~~to ~~for~~our ~~the~~officers ~~year~~without ~~ended~~sufficient ~~October 31,~~controls; ~~2009.~~lack ~~The~~of ~~Company~~adequate ~~has~~mechanisms ~~accounted~~ for ~~this~~anticipating ~~waived~~and ~~interest~~identifying asfinancial areporting ~~contribution~~risks, particularly the lack of ~~capital~~risk ~~from~~assessment ~~the~~processes ~~shareholder.~~used ~~On June 14,~~in ~~2010,~~reacting to changes in the ~~Company~~operating ~~and~~environment ~~Blackbird~~that ~~agreed~~could tohave ~~convert~~a ~~the~~potential ~~note~~effect toon ~~1,333,333~~financial ~~shares~~reporting; and lack of ~~common~~controls ~~stock.~~to ~~The~~provide ~~conversion~~reasonable ~~rate~~assurance ofthat $accounts ~~1.50 per~~were ~~share~~complete ~~was~~and ~~consistent~~accurate ~~with~~and ~~the~~agreed ~~share~~to ~~price~~detailed ~~per~~support ~~share~~and that reconciliations of ~~the~~accounts ~~Company’s~~were ~~July~~properly ~~2010~~performed, ~~private placement~~reviewed ~~(Note~~and ~~12)~~approved.

34These control deficiencies could result in material misstatements of significant accounts and disclosures that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that these control deficiencies constitute material weaknesses.

~~Table~~Due to the material weaknesses described above, our management performed additional analyses and other post-closing procedures to ensure that our unaudited interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of ~~Contents~~America (“GAAP”). Accordingly, our management believes that the audited condensed consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

~~SPOT~~Management’s ~~MOBILE~~Annual ~~INTERNATIONAL~~Report ~~LTD.~~on Internal Control Over Financial Reporting

~~NOTES~~Management TOis ~~CONSOLIDATED~~responsible ~~FINANCIAL~~for ~~STATEMENTS~~establishing and maintaining adequate “internal control over financial reporting” (~~CONTINUED~~as defined in Rule 13a-15(f) under the Exchange Act) for the company. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

~~YEAR~~As ~~ENDED~~required ~~OCTOBER~~by 31Rule 13a-15(b) under the Exchange Act, ~~2010~~our ~~AND~~management ~~2009~~evaluated the effectiveness of our internal controls and procedures (as defined by Rule 13a-15(e) and 15d-15(e) under the Exchange Act). In making this assessment, our management used the criteria for effective internal control over financial reporting described in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

~~11.~~Based ~~Capital~~upon ~~stock:~~that evaluation and criterion, and the material weaknesses in the controls noted above, we concluded that as of October 31, 2011, our internal control over financial reporting was ineffective.

	October 31,2010		October 31,2009
Authorized
Preferred stock:
Series A preferred stock, no par value; authorized 100,000,000 shares and 10,000,000 at October 31, 2010 and 2009, respectively
Common stock, $0.001 par value, authorized 1,000,000,000 shares and 175,000,000 at October 31, 2010 and 2009, respectively
Issued
10,000,000 shares of Series A preferred stock	$	—	$	10
24,153,594 shares of common stock		819,100		—
	$	819,100	$	10

Changes in Internal Control Over Financial Reporting

OnThere ~~June 7,~~were ~~2010,~~no ~~the~~changes ~~Company’s~~in ~~shareholders approved the amended and restated certificate of incorporation which includes the following amendments: (i) an amendment to change~~ our ~~corporate~~internal ~~name~~controls toover ~~Spot~~financial ~~Mobile~~reporting ~~International~~that ~~Ltd;~~occurred ~~(ii) an~~during ~~amendment to increase~~ the ~~number~~fourth ofquarter ~~authorized shares~~ of ~~our~~fiscal ~~common~~2011 ~~stock~~that ~~available~~have ~~for~~materially ~~issuance from 175~~affected,~~000,000~~ toor ~~1,000,000,000~~are ~~and~~reasonably likely to ~~increase~~materially ~~the~~affect, ~~number of authorized shares of~~ our ~~preferred~~internal ~~stock~~control ~~available~~over ~~for~~financial ~~issuance~~reporting. It ~~from~~is ~~10,000,000~~important to ~~100,000,000;~~note ~~and~~that ~~(iii) a~~although ~~restatement~~no ofchanges ~~our~~were ~~certificate~~made ~~of incorporation~~ to ~~incorporate~~internal ~~all~~controls ~~prior amendments,~~in ~~including~~the ~~those~~fourth ~~mentioned~~quarter ~~above.~~of Infiscal ~~this respect~~2011, ~~effective~~our ~~June 7,~~management ~~2010,~~intends weto ~~filed~~implement ~~our~~enhancements ~~amended~~ and ~~restated~~changes ~~certificate~~to ofinternal ~~incorporation~~control ~~with~~over ~~the~~financial ~~Secretary~~reporting ofto ~~State~~provide ofreasonable ~~Delaware.~~assurance ~~Upon~~that ~~the~~errors ~~filing of the amended~~ and ~~restated certificate~~control ofdeficiencies ~~incorporation,~~will ~~all~~not ~~of the outstanding shares of our Series A Convertible Preferred Stock were automatically converted into 17,333,333 shares of our common stock~~recur.

In Prior ~~July~~to February 24, 2010, ~~the~~Mr. ~~Company~~Prepaid ~~completed~~was a ~~private~~privately ~~placement~~held ofcompany ~~803~~and prior to June 7,~~333~~ ~~shares~~2010, ofSpot ~~common~~Mobile ~~stock~~Corp. atwas a ~~price~~privately ofheld ~~$1.50~~company ~~per~~and ~~share.~~neither ~~Each~~subsidiary ~~share included~~had aan ~~warrant~~appropriate internal control structure designed for ~~one~~external ~~share~~reporting purposes. These enhancements will include the hiring of ~~common~~additional ~~stock~~personnel ~~exercisable~~with atappropriate ~~$2.70~~skills and aexperience ~~warrant~~in ~~for~~the ~~one~~application ~~share~~ of ~~common~~GAAP ~~stock~~commensurate ~~exercisable~~with atour ~~$4.50.~~financial ~~These~~reporting ~~warrants~~requirements, ~~are~~ongoing ~~exercisable~~training, ~~immediately~~and development and ~~will~~communication ~~expire~~of ona ~~October 31,~~delegation ~~2011.~~of authority policy and other process enhancements.

On October 27, 2010, the Company filed an amendment to our certificate of incorporation to effect a reverse stock split of our common stock on the basis of one post split share for every thirty pre-split shares. All references to shares and earnings per share have been retroactively restated to reflect the reverse stock split. 39

~~At October~~ITEM ~~31, 2010, an additional 627,095 warrants exercisable at $0~~9B.30 OTHER ~~for shares of common stock were outstanding. These warrants were issued by Rapid Link prior to the Share Exchange Agreement.~~ INFORMATION

35 None.

~~Table~~PART ~~of Contents~~III

~~SPOT~~ITEM 10. DIRECTORS, ~~MOBILE~~EXECUTIVE ~~INTERNATIONAL~~OFFICERS ~~LTD.~~AND CORPORATE GOVERNANCE

~~NOTES~~Officers TOand ~~CONSOLIDATED~~Directors ~~FINANCIAL~~of ~~STATEMENTS~~the ~~(CONTINUED)~~ Company

~~YEAR~~The ~~ENDED~~following ~~OCTOBER~~table ~~31,~~sets ~~2010~~forth ~~AND~~certain ~~2009~~information regarding the Company’s directors and executive officers. Such officers hold identical positions at each of the Company’s operating subsidiaries. The Company’s officers are elected by the Board of Directors and shall serve at the discretion of the Board of Directors. All of the current directors serve until the next annual shareholders’ meeting or until their successors have been duly elected and qualified.

12. Related Party Transactions:

Name	Age	Position

Charles Zwebner	53	Chief Executive Officer, Interim Chief Financial Officer
Jeffery Kapner	47	President, Spot Mobile Corp.
Valerie Ferraro	60	Vice President and Director
Matthew Liotta	33	Director

~~Allocation~~Charles Zwebner; Chief Executive Officer and Chairman of ~~expenses:~~the Board of Directors

~~Many~~Charles ~~operating~~Zwebner ~~expenses,~~has ~~primarily~~served ~~salary~~as ~~costs~~ our Chief Executive Officer and ~~rent~~Chairman of ~~Mr. Prepaid,~~the ~~were~~Board ~~incurred~~of ~~and~~Directors ~~paid~~since byFebruary ~~Blackbird~~2010. He awas ~~company~~named ~~under~~Interim ~~common~~Chief ~~control.~~Financial InOfficer ~~accordance~~in ~~with~~October ~~SEC~~2011 ~~Staff~~when ~~Accounting~~the ~~Bulletin~~former NoCFO resigned. 55 Mr. Zwebner founded, ~~these~~and ~~financial~~is ~~statements~~currently ~~reflect~~the ~~all~~sole officer and director of, ~~the~~Blackbird ~~costs~~Corporation ~~associated~~which ~~with~~acquired the ~~operations~~business of ~~the Company~~Yak America, Inc. ~~While~~and certain ~~costs~~telecommunications ~~incurred~~assets byfrom Yak Communications, Inc. in December 2006. In March 2007, Blackbird ~~are~~Corporation ~~directly~~acquired ~~attributable~~Mr. toPrepaid, ~~the~~Inc. ~~Company~~and in February 2010, ~~other~~Blackbird ~~costs~~Corporation ~~were~~acquired ~~shared~~an ~~between~~80% ~~the~~interest ~~two~~in ~~organizations~~the Company. From In1998 ~~situations~~to ~~where~~2006 Mr. Zwebner was the ~~costs~~President, ~~were~~Chief ~~shared~~Executive Officer, ~~expense~~and ~~has~~Chairman ~~been~~of ~~allocated~~the ~~between~~Board ~~Blackbird~~of ~~and Mr~~Directors of Yak Communications Inc., a long distance telecommunications services provider ~~Prepaid~~(NASD:YAKC), a company he founded in December 1998. In ~~Management~~November ~~believes~~2006 ~~that~~Yak ~~the~~Communications ~~methodologies~~was ~~used~~sold ~~are~~to ~~reasonable~~Globalive Communications Corp. From ~~Salaries,~~1992 ~~taxes~~to 1998 Mr. Zwebner served as the President and ~~benefits~~a ~~were~~member ~~allocated~~of ~~based~~the ~~upon~~Board ~~functions~~of Directors of ~~employers~~CardCaller Canada, Inc. Mr. ~~Rent~~Zwebner ~~and~~founded ~~occupancy~~CardCaller ~~costs~~Canada ~~were~~in ~~allocated~~1992, ~~based~~which ondeveloped ~~space~~the ~~utilized.~~first ~~Total~~Canadian ~~allocated expenses~~fixed amount prepaid, ~~including~~multilingual ~~rent~~telephone ~~charged~~calling tocard. In June 1997, the ~~Company~~shareholders, ~~were~~including ~~approximately~~Mr. ~~$204~~Zwebner,~~000~~ ~~and~~of ~~$189~~CardCall International Holdings,~~000,~~ ~~for~~Inc. (“CIH”), the ~~year~~parent ~~ended~~of ~~October 31~~CardCaller Canada, ~~2010~~sold all of their shares in CIH to a U.S. public corporation. Mr. Zwebner holds a BA in Business Management and ~~2009~~Computer Science, ~~respectively.~~from York University and has completed several additional professional technical and management courses.

~~Use~~Jeffrey Kapner; President of ~~Premises:~~Spot Mobile Corp.

~~The~~Jeffrey ~~Company~~Kapner ~~currently~~has ~~operates~~served ~~from~~as ~~office~~President of our subsidiary, Spot Mobile Corp., since May 2010. Mr. Kapner is responsible for managing the daily operations of Spot Mobile as well as developing sales, marketing and ~~other space~~distribution ~~leased~~for bythe ~~Yak~~company. Mr. ~~America~~Kapner ~~Inc~~has over 25 years of experience in the telecommunications and technology industries. He has served in various functional roles overseeing marketing, sales, customer service and ~~Cipher~~operations ~~Networks~~teams. From ~~Inc~~2005 to April 2010, Mr. ~~The~~Kapner ~~Company~~served ~~subleases~~as the ~~space~~Senior Vice President of Marketing, Sales and Support for Total Call International, where he launched and established Total Call Mobile, a prepaid wireless MVNO on the Sprint network. Total Call International is a ~~month-~~nationally recognized provider of International long distance, one plus long distance, dial around, prepaid calling cards and prepaid wireless services. In January of 2010 Total Call Mobile and Total Call International were acquired by KDDI. From 2003 to~~-month~~ ~~basis~~2005 atMr. Kapner served as Regional Director of Marketing and Strategy for Adelphia Communications Corporation (NASDAQ: ADELQ), where he managed the ~~actual~~programming, ~~cost~~and the development of ~~$23~~new technologies including HDTV,~~000~~ Video on Demand, and Digital Video Recorders. From 2000 to 2002, Mr. Kapner served as Senior Director Market Development and Services Strategy for Keen Personal Media, a subsidiary of Western Digital Corporation (NYSE: WDC). While there he oversaw the strategic development of Digital Video Recorder technology and services and established Personal Video Recorder integration strategy for Digital Cable, IPG, VOD, SVOD and HDTV. From 1998 to 2000, Mr. Kapner served as Senior Manager Broadband Strategic Marketing at EarthLink, Inc. (NASDAQ: ELNK), developing EarthLink’s high speed cable modem and DSL services. Mr. Kapner holds an MBA and a BA in Business and Communications from the University of Southern California, Marshall School of Business.

~~13. Commitments and contingencies:~~40

OnValerie ~~June 10,~~Ferraro; ~~2010,~~Vice ~~Coastline~~President ~~Capital Partners was awarded $300,000 as its arbitration award in its proceeding against the Company. This matter related to Rapid Link~~ and ~~arose before the closing of the transactions contemplated by the Share Exchange Agreement. Coastline Capital Partner has since obtained~~ a ~~judgment~~member ~~in California against the Company in the amount~~ of ~~$434,000~~our ~~inclusive~~Board of attorney fees and costs and is currently seeking to have the judgment enforced in Florida. A full provision for this amount is included in these financial statements as loss on legal settlement. The Company is in settlement negotiations with respect to this matter. Directors

OnValerie ~~July 28,~~Ferraro ~~2010,~~has ~~the~~served ~~Company~~as ~~entered~~Vice ~~into~~President and a ~~settlement~~member ~~agreement~~of ~~with~~our ~~Matthew~~Board ~~Liotta~~of ~~and~~Directors ~~other~~since ~~parties~~February in2010. From ~~which~~2007 ~~350,000~~to ~~shares~~November ~~of the~~2010 ~~Company~~Ms. ~~were~~Ferraro ~~issued.~~served ~~This~~as ~~matter~~Vice ~~related~~President toand ~~Rapid~~Director ~~Link~~of ~~and~~Blackbird ~~arose~~Corporation. From ~~before~~2004 ~~closing~~to of2007 ~~the~~Ms. ~~transactions~~Ferraro ~~contemplated~~served byas ~~the~~President ~~Share~~of ~~Exchange~~Yak ~~Agreement~~Communications, Inc. ~~The~~following ~~Company~~a ~~estimated~~30-year ~~the~~career ~~value~~with ofBell ~~these~~Canada. She ~~shares~~has toextensive beexperience ~~approximately~~leading ~~$525,000~~multi-discipline ~~($1.50~~organizations ~~per~~in ~~share)~~the small/medium and a ~~provision~~Enterprise-level ~~for~~business ~~this~~markets, ~~amount~~and ishas ~~included~~directed inSales, ~~the~~Engineering ~~year~~and ~~ended~~Project ~~October 31,~~Management ~~2010~~organizations asin ~~loss~~Voice, onData ~~legal~~and ~~settlement.~~Internet Asbased ~~the~~technologies. ~~current~~A ~~trading~~multi-year ~~volume~~member of ~~the~~Bell ~~Company~~Canada’s ~~listed~~“President’s ~~shares is limited~~Club”, ~~management~~she ~~estimated~~pioneered the ~~value~~development of the ~~shares~~company’s ~~based~~Wholesale ondivision – the ~~July 2010~~Carrier ~~private~~Services ~~placement~~Group ~~transaction~~(CSG). ~~The~~As ~~settlement~~the ~~agreement~~Sr. ~~also~~Director, ~~included~~CSG, aMs. ~~full~~Ferraro ~~release~~held ofprimary ~~all~~responsibility ~~liabilities,~~for ~~damages~~the ~~and~~organizational ~~obligations~~design, ~~relating~~marketing toand ~~this~~sales ~~matter~~strategy, asregulatory ~~well~~compliance, ascustomer aand ~~dismissal~~employee ofsatisfaction, ~~the~~revenue ~~lawsuit~~growth and ~~also~~financial ~~related~~controls toof the ~~litigation~~organization.

36Matthew Liotta; a member of our Board of Directors

~~Table~~Matthew Liotta has been a member of ~~Contents~~our Board of Directors since June 2011. Mr. Liotta currently serves as Chief Executive Officer for PodPonics, LLC, a company he founded in 2010. Mr. Liotta was the Chief Technology Officer and a director of Rapid Link Incorporated (our predecessor) from October 2008 through August 2009. In 2004, Mr. Liotta founded One Ring Networks, Inc. (“One Ring”), a hybrid fiber and fixed access carrier and an alternative access provider in the U.S. In 2008, Rapid Link Incorporated acquired One Ring. Prior to founding One Ring, Mr. Liotta was the chief executive officer of Montara Software, a content management and portal software company, from 2002 through 2004. Prior to that, Mr. Liotta was the portal engineering manager for DevX. Mr. Liotta has also served as a software architect for a variety of companies in San Francisco and Atlanta.

~~SPOT~~As ~~MOBILE~~previously ~~INTERNATIONAL~~disclosed, ~~LTD~~Mr. Liotta commenced litigation against Telenational Communications, Inc., our former subsidiary in November 2009, alleging wrongful termination and damages for unpaid compensation. Mr. Liotta was also involved in a separate lawsuit against Telenational Communications and Rapid Link Incorporated claiming certain contingent purchase price payments under a stock purchase agreement with Rapid Link Incorporated. Both of these claims arose prior to the closing of the Share Exchange Agreement transaction, and the resulting change in control of the Company, in February 2010. On July 28, 2010, we entered into a settlement agreement with Mr. Liotta and other plaintiffs in both of these proceedings pursuant to which we agreed to issue an aggregate of 350,000 shares of our common stock to the plaintiffs in exchange for a full release of all liabilities, damages and obligations relating to these matters.

~~NOTES~~Committees TOof ~~CONSOLIDATED~~the ~~FINANCIAL~~Board ~~STATEMENTS~~of ~~(CONTINUED)~~ Directors

~~YEAR~~We ~~ENDED~~have ~~OCTOBER~~not 31established any committees including an Audit Committee, ~~2010~~a ~~AND~~Compensation ~~2009~~Committee or a Nominating Committee, or any committee performing a similar function. Our Board of Directors consists of only three members, which are also executive officers of the Company, and has not delegated any of its functions to committees. The members of our Board of Directors do not qualify as “independent” under any exchange or SEC standard. The entire Board of Directors acts as our audit committee as permitted under Section 3(a)(58)(B) of the Exchange Act. Our Board of Directors reviews the professional services provided by our independent auditors, the independence of our auditors from our management, our annual financial statements and our system of internal accounting controls. Further, as we are currently quoted on the OTC Pink Sheets, we are not subject to any exchange rule which includes qualitative requirements mandating the establishment of any particular committees or that a majority of our Board of Directors be independent. We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our Board of Directors has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors. Given the nature of our operations and lack of directors and officers insurance coverage, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board of Directors will participate in the consideration of director nominees.

~~13.~~None ~~Commitments~~of ~~and~~our ~~contingencies~~directors is considered an “audit committee financial expert” within the meaning of Item 407(~~continued~~d) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:

~~The~~- ~~Company~~understands ~~has~~generally ~~received~~accepted ~~correspondence~~accounting ~~from~~principles Telenational Communications, Inc., a former subsidiary of the Company regarding an alleged breach by the Company of its obligations under the Share Exchange Agreement of October 13, 2009 to consummate a subsequent closing which was to occur on June 30, 2010 upon satisfaction of certain conditions. Under such subsequent closing, the Company was to acquire certain assets of Telenational and assume certain indebtedness related to such assets. The Company terminated the Share Exchange Agreement on June 7, 2010 as the Company determined that Telenational was unable to comply with its obligations under the agreement. No formal proceedings have been commenced with respect to this matter. The Company believes that it has no further obligations in this regard and that any claim is without merit and will be defended. No provision for loss, if any, has been made in these financial statements ~~as any claim and loss is cannot be determined.~~ ;

~~14. Telecommunications Switching Platform:~~41

~~Until~~- ~~October 29,~~is ~~2010,~~able ~~Spot Mobile had an agreement~~ to ~~utilize~~assess ~~a telecommunications switching platform (“technology assets,” or “~~the ~~platform”)~~general inapplication ~~order~~of tosuch ~~route~~principles ~~its calls and~~ in connection with ~~its~~accounting cellular business. The agreement was with, and the platform was owned by Yak America, Inc (“Yak”), an entity controlled by the Company’s CEO and majority shareholder. Spot Mobile incurred expense in 2010 of $40,000, related to the use of the platform. On October 29, 2010, the Company acquired these technology assets from Yak. These technology assets had an historical carrying cost to Yak of $1,175,000 and Spot Mobile acquired the technology assets in exchange for ~~Spot Mobile’s assumption of certain secured indebtedness of Yak’s parent~~estimates, ~~Blackbird,~~accruals in the amount of $1,175,000 (Note 9). The Company obtained a valuation of the technology assets by a third party that indicated there was no impairment of the historical carrying costs of the technology assets as of October 31, 2010. This switch has current capacity to route 75 million minutes each month and is scalable up to 250 million minutes each month. For the year ended October 31, 2010, Spot Mobile used 218,000 minutes. Spot Mobile plans to use the platform’s capacity to offer mobile virtual network services. Spot Mobile has entered into an agreement with Yak whereby Yak will be able to use any excess capacity not utilized by the Company. reserves;

~~The~~- ~~Company~~has ~~did~~experience ~~not acquire any of Yak’s business operations related to the technology assets~~preparing, ~~including any customers or revenues~~auditing, oranalyzing ~~any of Yak’s receivables, payables~~ or ~~employees~~evaluating ~~related~~financial tostatements ~~the~~comparable ~~technology assets acquired. Effective November 1, 2010, Yak will be entitled~~ to ~~use~~ the ~~platform~~breadth ~~until~~and ~~June 20, 2012~~complexity ~~for a service fee equal~~ to 8%our of Yak’s net revenue from the use of the platform for its customers. Based upon Yak’s historical use of the technology assets, these service fees are not expected to be significant to the Company’s consolidated financial statements ~~for the year ended October 31, 2011.~~ ;

~~15.~~- ~~Income~~understands ~~Taxes:~~internal controls over financial reporting; and

~~At October 31, 2010, the Company has U.S. net operating loss carry forwards for federal income tax purposes of approximately $35 million (2009~~ - ~~$43~~understands ~~million),~~audit ~~which~~committee ~~expire in 2011 through 2030~~functions. The tax effect of these carry forwards is approximately $12 million (2009- $17 million), which represents the Company’s only significant deferred tax asset. Utilization of U.S. net operating losses is subject to annual limitations provided for the Internal Revenue Code. The annual limitation may also result in the expiration of net operating losses before utilization.

37Director Compensation

~~Table~~None of ~~Contents~~our directors receive any compensation for their services as a member of the Board of Directors.

~~SPOT~~Code ~~MOBILE~~of ~~INTERNATIONAL LTD.~~ Ethics

~~NOTES~~The TOBoard ~~CONSOLIDATED~~of ~~FINANCIAL~~Directors ~~STATEMENTS~~adopted ~~(CONTINUED)~~a Code of Business Conduct and Ethics which is applicable to all employees of the Company, including all of our officers and directors. The code reflects our commitment to the conduct of our business affairs in accordance with not only the requirements of the law but also standards for ethical conduct that will maintain and foster our reputation for honest business dealings.

~~YEAR~~Family ~~ENDED OCTOBER 31, 2010 AND 2009~~ Relationships

~~15.~~There ~~Income~~are ~~Taxes~~no ~~(continued):~~family relationships among any of our executive officers or directors.

~~During~~Involvement ~~2010, $11 million of net operating losses expired. The effective tax rate does not equal the statutory tax rate due to increases~~ in ~~the~~Certain ~~valuation~~Legal allowance to record the allowance at an amount equal to total deferred tax assets. Realization of tax benefits depends on having sufficient taxable income within the carry back and carry forward periods. The Company continually reviews the adequacy of the valuation allowance and will recognize these benefits when it is more likely than not that the benefits will be realized. Based on pretax losses incurred in prior years, management has established a valuation allowance against the entire net deferred asset balance. Proceedings

16To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

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