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

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended ~~April~~October 3031, 2010

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____ to _____

Commission File Number: 000-52827

OMNICITY CORP.
(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	98-0512569 (I.R.S. Employer Identification No.)
Nevada	98-0512569
807 S State Rd 3, Rushville, Indiana, U.S.A. (Address of Principal Executive Offices)	46173 (Zip Code)
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
(317) 903-8178 (Registrant's telephone number, including area code)
807 S State Rd 3, Rushville, Indiana, U.S.A.	46173
N/A (Former name, former address and former fiscal year, if changed since last report)
(Address of Principal Executive Offices)	(Zip Code)
(765) 570-4221
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Web site~~filer, ifa non-accelerated ~~any~~filer, ~~every~~or ~~Interactive~~a ~~Data~~smaller ~~File~~reporting ~~required~~company. toSee bedefinitions ~~submitted~~of “large ~~and~~accelerated ~~posted~~filer,” ~~pursuant~~“accelerated tofiler,” ~~Rule~~and ~~405~~“smaller ofreporting ~~Regulation~~company” in SRule 12b-T2 ~~(Section 232.405~~ of ~~this chapter) during~~ the ~~preceding~~Exchange 12Act. ~~months~~ (orCheck ~~for such shorter period that the registrant was required to submit and post such files~~one). :

Yes [ ] No [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)

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

~~Yes~~Indicate ~~[ ] No [X]~~ the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: As of December 15, 2010, there were 43,745,414 shares of common stock, par value $0.001, outstanding.

Indicate the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: As of June 14, 2010, there were 43,795,895 shares of common stock, par value $0.001, outstanding.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Omnicity Corp. Consolidated Balance Sheets As at ~~April~~October 3031, 2010 (Unaudited) and July 31, ~~2009~~2010

	April 30, 2010 $	July 31, 2009 $
		October 31, 2010 $		July 31, 2010 $
Assets
Current Assets:
Cash	~~52,992~~	~~159~~1,~~119~~246		39,405
Accounts receivable, net	~~106,293~~	78283,~~007~~870		273,387
Other receivable	-	5,000
Prepaid expenses and deposits		4,722		14,409
Prepaid expenses and deposits	101,033	114,173
Total Current Assets		289,838		327,201
Total Current Assets	260,318	356,299
Property and Equipment (Note 3)		2,454,197		2,425,092
Property and Equipment (Note 3)	2,242,923	1,022,675
Deposits and Other Assets (Note 4)		125,094		125,094
Deposits and Other Assets (Note 4)	124,894	129,886
Customers’ Relationships (Note 5)		2,882,523		2,973,713
Customers' Relationships (Note 5)	3,109,665	1,841,247
Total Assets		5,751,652		5,851,100
Total Assets	5,737,800	3,350,107
Liabilities and Stockholders' Deficit
Liabilities and Stockholders' Deficit
Current Liabilities:
Current Liabilities:
Accounts payable		1,325,327		1,267,413
Accounts payable	1,003,891	838,336
Accrued liabilities (Note 6)		492,651		398,410
Accrued liabilities (Note 7)	165,982	213,431
Short-term notes payable (Note 7)		1,096,805		942,050
Short-term notes payable (Note 8)	636,095	1,222,716
Current portion of long-term debt (Note 8)		1,441,333		1,455,137
Current portion of long-term debt (Note 9)	1,045,340	511,521
Current portion of capital lease obligations (Note 12)		56,654		74,569
Current portion of capital lease obligations (Note 13)	84,708	50,147
Total Current Liabilities		4,412,770		4,137,579
Deferred revenue	42,000	42,000
Capital Lease Obligations (Note 12)		22,586		25,929
Other liabilities	-	63,132
Long-term Debt (Note 8)		2,930,577		2,931,844
Total Current Liabilities	2,978,016	2,941,283
Total Liabilities		7,365,933		7,095,352
Capital Lease Obligations (Note 13)	39,868	46,868
Nature of Operations and Continuance of Business (Note 1)
Long-term Debt (Note 9)	3,397,410	1,436,053
Legal Proceedings (Note 13)
Total Liabilities	6,415,294	4,424,204
Stockholders' Deficit:
Nature of Operations and Continuance of Business (Note 1)
Common Stock, par value $.001, 1,540,000,000 shares authorized, 43,745,414 and 43,445,418 issued and outstanding, respectively (Note 10)		43,745		43,445
Commitments (Note 13)
Common Stock Subscribed and/or Reserved (Note 11)		232,500		232,500
Stockholders' Deficit:
Additional Paid-in Capital		8,679,851		8,650,151
Common Stock, par value $.001, 1,540,000,000 shares authorized, 43,278,751 and 38,018,382 issued and outstanding, respectively (Note 11)	43,278	38,018
Deficit		(10,570,375	)	(10,170,348	)
Common Stock Subscribed and/or Reserved (Notes 6 and 11)	392,500	641,594
Total Stockholders' Deficit		(1,614,279	)	(1,244,252	)
Additional Paid-in Capital	8,590,317	5,929,479
Total Liabilities and Stockholders' Deficit		5,751,653		5,851,100
Deficit	(9,703,589)	(7,683,188)
Total Stockholders' Deficit	(677,494)	(1,074,097)
Total Liabilities and Stockholders' Deficit	5,680,800	3,350,107

(See accompanying notes to these consolidated financial statements)

~~-2-~~Consolidated Statements of Operations For the Three Months Ended October 31, 2010 and 2009 (Unaudited)

Omnicity Corp. Consolidated Statements of Operations (Unaudited)

	$	2010		$	2009

Sales, net		1,261,861			617,000

Expenses:
Service costs		87,905			14,098
Plant and signal delivery		439,036			338,270
Marketing and sales		1,762			2,276
General and administration		171,421			293,694
Salaries and benefits		523,302			410,835
Depreciation and amortization		315,677			170,258

Total Expenses		(1,539,103	)		(1,229,431	)

Loss from Operations		(277,242	)		(612,431	)

Other Income (Expense):
Other income		603			46,728
Gain on sale of assets, net		5,500			-
Financing expense		(10,505	)		-
Interest		(118,303	)		(78,433	)

Total Other Income (Expense)		(122,785	)		(31,705	)

Net Loss		(400,027	)		(644,136	)

Net Loss per Share – Basic and Diluted		(.01	)		(.02	)

Weighted Average Shares Outstanding – Basic and Diluted		43,279,000			38,256,000

	Three Months Ended April 30, 2010 $	Three Months Ended April 30, 2009 $	Nine Months Ended April 30, 2010 $	Nine Months Ended April 30, 2009 $
Sales, net	837,486	424,766	2,090,432	1,033,696
Expenses:
Service costs	16,389	8,399	43,307	21,139
Plant and signal delivery	363,802	225,835	1,019,808	585,925
Marketing and sales	3,444	21,372	11,104	27,227
General and administration	119,864	226,142	643,270	489,538
Salaries and benefits	625,714	345,829	1,536,370	874,330
Stock based compensation	-	-	-	289,629
Depreciation and amortization	233,279	132,381	550,646	340,780
Total Expenses	1,362,492	959,958	3,804,504	2,628,568
Loss from Operations	(525,006)	(535,192)	(1,714,072)	(1,594,872)
Other Income (Expense):
Other income	32	-	49,330	-
Gain on sale of assets, net	40,719	-	30,719	-
Financing expense	(131,479)	-	(140,517)	-
Interest	(126,740)	(64,232)	(245,660)	(132,723)
Total Other Income (Expense)	(217,468)	(64,232)	(306,128)	(132,723)
Net Loss	(742,474)	(599,424)	(2,020,200)	(1,727,595)
Net Loss per Share - Basic and Diluted	(.02)	(.02)	(.05)	(.05)

(See accompanying notes to these consolidated financial statements)

~~(See~~ ~~accompanying~~Omnicity ~~notes~~Corp. to Consolidated ~~these~~Statements ~~consolidated~~of ~~financial~~Cash ~~statements~~Flows For the Three Months Ended October 31, 2010 and 2009 (Unaudited)

-3-

	$	2010		$	2009

Cash flows from (to) operating activities:
Net loss		(400,027	)		(644,136	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		315,677			170,258
Interest expense accreted		26,680			-
Expenses settled with equity		30,000			-
Interest and expenses capitalized to long-term debt		12,851			-
(Increase) decrease in:
Accounts and other receivable		(10,483	)		13,227
Prepaid expenses		9,687			108,883
Increase (decrease) in:
Accounts payable and accrued liabilities		152,848			63,675

Net cash from (used in) operating activities		137,233			(288,093	)

Cash flows from (to) investing activities:
Increase in deposits		-			(4,007	)
Increase in cost of customers’ relationships		(30,827	)		-
Acquisition of property and equipment		(222,765	)		(122,405	)

Net cash used in investing activities		(253,592	)		(126,412	)

Cash flows from (to) financing activities:
Proceeds from short-term notes		165,000			148,871
Repayment of short-term notes		(10,938	)		(63,307	)
Related party repayment (advance)		-			(4,100	)
Proceeds from long-term debt		-			37,399
Repayment of long-term debt and capital lease obligations		(75,862	)		(123,529	)
Proceeds from common stock subscriptions		-			1,020,000

Net cash provided by financing activities		78,200			1,015,334

(Decrease) increase in cash		(38,159	)		600,829
Cash, beginning of period		39,405			159,119

Cash, end of period		1,246			759,948

Supplemental cash flow information:
Cash paid for interest		51,202			48,433
Cash paid for income taxes		-			-

Supplemental disclosure of non-cash investing and financing activities:
Warrants issued pursuant to a financing arrangement		-			63,132

~~Omnicity~~(See ~~Corp.~~accompanying notes to these consolidated financial statements)

~~Consolidated~~Omnicity ~~Statements~~Corp. Notes ofto ~~Cash~~the ~~Flows~~Consolidated Financial Statements

~~(Unaudited)~~1. Nature of Operations and Continuance of Business

	Nine Months Ended April 30, 2010 $	Nine Months Ended April 30, 2009 $
Cash flows from (to) operating activities:
Net loss	(2,020,200)	(1,727,595)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	550,646	340,780
Stock based compensation	-	289,629
Gain on sale of assets, net	(30,719)	-
Financing expense paid with common stock	5,000	-
Interest expense accreted	34,649	-
Expenses settled through common stock subscriptions	-	19,740
Expenses settled through short-term borrowings	-	18,996
(Increase) decrease in:
Accounts and other receivable	(23,285)	(42,332)
Prepaid expenses	83,140	(6,932)
Increase (decrease) in:
Accounts payable and accrued liabilities	222,888	333,468
Net cash used in operating activities	(1,177,882)	(774,246)
Cash flows from (to) investing activities:
(Increase) in deposits	(5,008)	46,408
Proceeds from sale leaseback of property and equipment	225,000	489,368
Customers' relationships acquired	(475,733)	-
Acquisition of property and equipment	(1,645,185)	(684,588)
Net cash used in investing activities	(1,900,926)	(148,812)
Cash flows from (to) financing activities:
Proceeds from short-term notes	1,017,000	370,000
Repayment of short-term notes	(195,017)	(33,500)
Repayment of bank borrowings	-	(909)
Proceeds from long-term debt	1,510,000	145,000
Repayment of long-term debt and capital lease obligations	(479,302)	(50,587)
Proceeds from issuance of common stock	1,020,000	5,500
Proceeds from common stock subscriptions	100,000	571,310
Common stock issuance costs	-	(13,747)
Net cash provided by financing activities	2,972,681	993,067
(Decrease) increase in cash	(106,127)	70,009
Cash, beginning of period	159,119	-
Cash, end of period	52,992	70,009
Supplemental cash flow information:
Cash paid for interest	156,718	70,517
Cash paid for income taxes	-	-
Supplemental disclosure of non-cash investing and financing activities:
Net liabilities assumed in corporate reorganization	-	(168,352)
Current liabilities transferred to long-term debt	961,416	369,631
Equipment acquired pursuant to capital leases and issuance of stock	91,295	6,800
Conversion of debt into common stock and common stock subscriptions	80,000	621,162
Warrants issued pursuant to a financing arrangement	61,132	-
Customer relationships acquired in exchange for debt and common stock	1,021,380	1,118,700

On February 17, 2009, the Company acquired all of the issued and outstanding shares of Omnicity, Incorporated. Omnicity, Incorporated (incorporated on August 13, 2003) provides broadband access, including advanced services of voice, video and data, in un-served and underserved small and rural markets and is planning to be a consolidator of rural market broadband nationwide.

~~(See~~These financial ~~accompanying~~statements ~~notes~~have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated substantial revenues but has sustained losses since inception and has never paid any dividends and is unlikely to pay dividends in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary debt and/or equity financing to fund its growth strategy, pay debt when due, to continue operations, and to attain profitability. As at October 31, 2010, the Company had a working capital deficit of 4,122,932 and a stockholders’ deficit of $1,614,279. All of these ~~consolidated~~factors combined raises substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements) do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Although the Company is operationally cash flow positive as at October 31, 2010, the Company must continue to address its liquidity and working capital issues. The Company continues to raise additional capital through the issuance of short-4term and long-term debt and equity to private investors to maintain its aggressive acquisition strategy, increase its organic growth and to repay principal and interest when due. Management believes this additional capital and the expanded customer base through acquisitions and organic growth will provide the Company the opportunity to increase its operational cash flow and ultimately to be profitable over the next twelve months.

~~Omnicity Corp~~2. Significant ~~Notes~~Accounting toPolicies ~~Consolidated Financial Statements (Unaudited)~~

~~1. Nature~~Interim ofUnaudited ~~Operations and Continuance of Business~~Financial Statements

~~The~~These ~~Company~~interim unaudited ~~was~~consolidated ~~incorporated~~financial asstatements ~~Bear~~have ~~River~~been ~~Resources,~~prepared ~~Inc.~~in accordance with accounting principles generally accepted in the ~~State~~United States for interim financial information and with the instructions for SEC Form 10-Q. They do not include all of ~~Nevada~~the oninformation ~~October~~and 12footnotes required by generally accepted accounting principles for complete financial statements. Therefore, ~~2006~~these financial ~~and~~statements ~~was~~should ~~registered~~be asread anin ~~extra-provincial~~conjunction ~~company~~with ~~under~~the Company’s audited financial statements and notes thereto for the ~~Business~~years ~~Corporations~~ended ~~Act~~July of31, ~~British~~2010 ~~Columbia~~and 2009 included in the Company’s Form 10K filed on November 617, ~~2006~~2010 with the SEC. OnThe ~~October~~consolidated 21financial statements included herein are unaudited; however, ~~2008~~they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial ~~changed~~position at October 31, 2010, and the results of its ~~name~~operations for the three months ended October 31, 2010 and 2009 and the results of its cash flows for the three months ended October 31, 2010 and 2009. The results of operations for the three months ended October 31, 2010 are not necessarily indicative of the results to ~~Omnicity~~be ~~Corp~~expected for future quarters or the full year.

OnUse ~~February 17, 2009, the Company acquired all~~ of the issued and outstanding shares of Omnicity, Incorporated. Omnicity, Incorporated (incorporated on August 13, 2003) provides broadband access, including advanced services of voice, video and data, in un-served and underserved small and rural markets and is planning to be a consolidator of rural market broadband nationwide. The total purchase price was 23,000,000 common shares of the Company. Estimates

~~These~~The preparation of financial statements ~~have~~in ~~been~~accordance ~~prepared~~with onUnited aStates ~~going~~generally ~~concern~~accepted accounting ~~basis,~~principles ~~which~~requires ~~implies~~management ~~the Company will continue~~ to ~~realize~~make ~~its~~estimates ~~assets~~ and ~~discharge~~assumptions that ~~its~~affect ~~liabilities in~~ the ~~normal~~reported ~~course~~amounts of ~~business.~~assets ~~The~~and ~~Company~~liabilities ~~has~~at ~~generated~~the ~~substantial~~date ~~revenues~~of ~~but~~the financial ~~has~~statements ~~sustained losses since inception~~ and ~~has~~the ~~never~~reported ~~paid~~amounts ~~any~~of ~~dividends~~revenue and isexpenses ~~unlikely to pay dividends~~ in the reporting ~~immediate or foreseeable future~~period. The ~~continuation~~Company ofregularly ~~the~~evaluates ~~Company~~estimates asand aassumptions related ~~going~~to ~~concern~~the isuseful ~~dependent~~life ~~upon~~and ~~the~~recoverability ~~ability~~ of ~~the~~long-lived ~~Company~~assets, tostock-based compensation, ~~obtain~~and ~~necessary~~deferred ~~debt~~income ~~and/or~~tax ~~equity~~asset ~~financing~~valuation toallowances. ~~fund~~The Company bases its ~~growth~~estimates ~~strategy,~~and ~~pay~~assumptions ~~debt~~on ~~when~~current ~~due~~facts, tohistorical ~~continue~~experience ~~operations,~~ and various toother ~~attain~~factors ~~profitability.~~that Asit atbelieves ~~April~~to ~~30,~~be ~~2010~~reasonable under the circumstances, the ~~Company~~results ~~had~~of awhich ~~working~~form ~~capital~~the ~~deficit~~basis offor ~~$2,717,698~~making ~~and~~judgments aabout the ~~stockholders'~~carrying ~~deficit~~values of ~~$677,494.~~assets ~~All~~and ofliabilities ~~these~~and ~~factors~~the ~~combined~~accrual ~~raises~~of ~~substantial~~costs ~~doubt~~and expenses ~~regarding~~that ~~the~~are ~~Company's~~not ~~ability~~readily toapparent ~~continue~~from asother ~~a going concern~~sources. ~~These~~The ~~financial~~actual ~~statements~~results experienced doby ~~not~~the ~~include~~Company ~~any~~may ~~adjustments~~differ tomaterially ~~the recoverability~~ and ~~classification~~adversely offrom ~~recorded~~the Company’s ~~asset~~estimates. ~~amounts~~To ~~and~~the ~~classification~~extent ofthere ~~liabilities~~are ~~that~~material ~~might~~differences bebetween ~~necessary~~the estimates ~~should~~and the ~~Company~~actual beresults, ~~unable~~future toresults ~~continue~~of asoperations awill ~~going concern~~be affected.

~~Although~~Fair the Company is operationally cash flow positive as at April 30, 2010, the Company must continue to address its liquidity and working capital issues. The Company continues to raise additional capital through the issuance of short-term and long-term debt and equity to private investors to maintain its aggressive acquisition strategy, increase its organic growth and to repay principal and interest when due. Management believes this additional capital and the expanded customer base through acquisitions and organic growth will provide the Company the opportunity to increase its operational cash flow and ultimately to be profitable over the next twelve months.Value

2The Company’s financial instruments consist principally of notes payable and convertible debentures. ~~Significant~~ Notes payable ~~Accounting~~and ~~Policies~~convertible debentures are financial liabilities with carrying values that approximate fair value. The Company determines the fair value of notes payable and convertible debentures based on the effective yields of similar obligations. The Company believes all of the financial instruments’ recorded values approximate fair market value because of their nature and respective durations.

~~Interim~~The ~~Unaudited~~Company ~~Financial~~complies ~~Statements These~~with ~~interim~~the ~~unaudited~~provisions ~~consolidated~~of ~~financial~~ASC ~~statements~~820, ~~have~~“Fair Value ~~been~~Measurements ~~prepared~~and inDisclosures” ~~accordance~~(“ASC ~~with~~820”), ~~accounting~~previously ~~principles~~referred ~~generally~~to ~~accepted~~as SFAS inNo. ~~the~~157. ASC ~~United~~820 ~~States~~defines ~~for~~fair ~~interim~~value, ~~financial~~establishes ~~information~~a ~~and with the instructions~~ framework for ~~SEC~~measuring ~~Form 10-Q.~~fair ~~They~~value doand ~~not~~expands ~~include~~disclosures ~~all~~about offair ~~the~~value ~~information and footnotes~~ measurements required byunder ~~generally~~other ~~accepted~~ accounting ~~principles for complete financial statements~~pronouncements. ~~Therefore~~ASC 820-10-35, ~~these~~“Fair ~~financial~~Value Measurements ~~statements~~and ~~should~~Disclosures be- ~~read~~Subsequent inMeasurement” ~~conjunction~~(“ASC ~~with~~820-10-35”), clarifies ~~the~~that ~~Company's~~fair ~~audited~~value ~~financial~~is ~~statements~~an ~~and~~exit ~~notes~~price, ~~thereto~~representing ~~for~~ the ~~years~~amount ~~ended~~that ~~July~~would be ~~31,~~received ~~2009~~from ~~and 2008 included in~~ the ~~Company's~~sale ~~Form~~of ~~10K~~an ~~filed~~asset onor ~~October~~paid ~~23,~~to ~~2009~~transfer ~~with~~a ~~the~~liability ~~SEC.~~in ~~The~~an orderly ~~consolidated~~transaction ~~financial~~between ~~statements~~market ~~included~~participants. ~~herein~~ASC ~~are~~820-10-35 ~~unaudited;~~also ~~however,~~requires that ~~they~~a ~~contain~~fair ~~all~~value ~~normal~~measurement ~~recurring~~reflect ~~accruals and adjustments that, in~~ the ~~opinion~~assumptions ofmarket ~~management,~~participants ~~are~~would use ~~necessary~~in topricing ~~present~~an ~~fairly~~asset ~~the~~or ~~Company's~~liability ~~financial~~based ~~position~~on ~~at April 30, 2010, and~~ the ~~results~~best ofinformation ~~its~~available. Assumptions ~~operations~~include ~~for~~ the ~~three~~risks ~~months~~inherent ~~and~~in ~~nine~~a ~~months~~particular ~~ended~~valuation ~~April~~technique (such ~~30,~~as ~~2010~~a ~~and~~pricing ~~2009~~model) and/or the ~~results~~risks ofinherent ~~its~~in ~~cash flows for~~ the ~~nine~~inputs ~~months~~to ~~ended April 30, 2010 and 2009~~the model. The ~~results~~Company ofalso ~~operations~~follows ~~for~~ASC ~~the~~825 ~~three~~“Interim ~~months~~Disclosures ~~and~~about Fair ~~nine~~Value ~~months~~of ~~ended~~Financial ~~April 30~~Instruments”, ~~2010~~previously ~~are~~referred ~~not~~to ~~necessarily~~as ~~indicative~~FAS ~~of the results~~ 107-1 to beexpand ~~expected~~required ~~for future quarters or the full year~~disclosures.

~~Fair~~ASC ~~Value~~820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820-10-35 are described below:

~~The~~Level ~~Company's~~1 ~~financial~~- Valuations instruments consist principally of notes payable, convertible debentures and a derivative warrant liability. Notes payable and convertible debentures are financial liabilities with carrying values that approximate fair value. The Company determines the fair value of notes payable and convertible debentures based on ~~the~~quoted ~~effective yields of similar obligations. The Company determines the fair value of its derivative warrant liability based upon the trading~~ prices ofin active ~~its~~markets ~~common~~for ~~stock~~identical onassets ~~the~~or ~~date~~liabilities ofthat ~~issuance~~an ~~and~~entity ~~when~~has ~~applicable, on~~ the ability ~~last~~to ~~day of the quarter~~access. ~~The Company uses the Black-Scholes Option Model in valuing the fair value of its derivative warrant liability.~~

~~The~~Level ~~Company~~2 ~~believes~~- Valuations ~~all~~based ofon ~~the~~quoted ~~financial~~prices ~~instruments'~~for similar ~~recorded~~assets ~~values~~or ~~approximate~~liabilities, ~~fair~~quoted ~~market~~prices ~~value~~for ~~because~~identical ofassets ~~their~~or liabilities ~~nature~~in ~~and~~markets ~~respective~~that ~~durations.~~are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 -5- Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

~~The~~Property ~~Company complies with the provisions of ASC 820, "Fair Value Measurements~~ and Disclosures" ("ASC 820"), previously referred to as SFAS No. 157. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements required under other accounting pronouncements. ASC 820-10-35, "Fair Value Measurements and Disclosures - Subsequent Measurement" ("ASC 820-10-35"), clarifies that fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820-10-35 also requires that a fair value measurement reflect the assumptions market participants would use in pricing an asset or liability based on the best information available. Assumptions include the risks inherent in a particular valuation technique (such as a pricing model) and/or the risks inherent in the inputs to the model. The Company also follows ASC 825 "Interim Disclosures about Fair Value of Financial Instruments", previously referred to as FAS 107-1 to expand required disclosures. Equipment

~~ASC~~Property ~~820-10-35~~and ~~establishes~~equipment ais ~~fair~~stated ~~value~~at ~~hierarchy~~cost, less ~~that~~accumulated ~~prioritizes~~depreciation ~~the~~based ~~inputs~~on toestimated ~~valuation~~useful ~~techniques~~lives ~~used~~utilizing tothe straight-line ~~measure fair value~~method. The ~~hierarchy~~Company ~~gives~~capitalizes costs associated with the construction ~~highest~~of ~~priority~~new totransmission ~~unadjusted~~facilities. ~~quoted~~Capitalized ~~prices~~construction incosts include ~~active~~materials, ~~markets~~labor ~~for~~and ~~identical~~interest. ~~assets~~The orCompany’s ~~liabilities~~methodology ~~(level~~for capitalization 1of ~~measurement)~~internal construction labor and ~~the~~internal ~~lowest~~and ~~priority~~contracted tothird party ~~unobservable~~installation ~~inputs~~costs (~~level~~including ~~3 measurements~~materials). ~~The~~utilizes ~~three~~actual ~~levels~~costs. ofMaterials and ~~the~~external ~~fair~~labor ~~value~~costs ~~hierarchy~~associated ~~under~~with ~~ASC~~construction ~~820-10-35~~activities are capitalized ~~described~~based ~~below:~~on amounts invoiced to the Company by third parties.

~~Level~~Computers ~~1. Valuations~~and ~~based~~wireless equipment onalso ~~quoted~~consists ~~prices~~of spare equipment and supplies not put in ~~active~~use ~~markets~~such ~~for~~as radios, ~~identical~~antennas, ~~assets~~cable and wire and is stated at the lower of cost (first-in, first-out basis) or ~~liabilities~~market. The ~~that~~spare anelectronic ~~entity~~equipment ~~has~~is maintained to provide replacement parts when and if needed in a short time period to provide minimal service disruption to customers in the ~~ability~~event of a parts failure and to install ~~access~~new customers’ premises equipment timely when ordered. Spare equipment and supplies are not depreciated until put into use.

~~Level~~Improvements ~~2. Valuations~~that ~~based~~extend onasset ~~quoted~~lives ~~prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that~~ are ~~not~~capitalized. ~~active,~~Other repairs orand ~~other~~maintenance ~~inputs~~costs ~~that~~ are ~~observable~~charged orto ~~can~~operations beas ~~corroborated~~incurred. byEstimated useful ~~observable~~lives ~~data~~ for ~~substantially~~property ~~the~~and ~~full~~equipment ~~term~~are ofas ~~the assets or liabilities.~~follows:

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Description	Life

Computer and wireless equipment	3 years
Towers and infrastructures	5 years
Furniture and fixtures	7 years
Vehicles	5 years
Software	3 years

~~Recently~~The ~~Issued~~Company periodically evaluates the useful lives of its property and equipment. The Company’s property and equipment is reviewed for impairment whenever events or ~~Adopted~~changes ~~Accounting~~in circumstances ~~Pronouncements~~indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net undiscounted cash flows expected to be generated by the related assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount the carrying value exceeds the fair market value of the assets. No impairment was recorded at October 31, 2010 or July 31, 2010.

OnCustomers’ July 1, 2009, the Financial Accounting Standards Board ("FASB") officially launched the FASB ASC 105 -- Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification ("the Codification"), as the single official source of authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission. The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the Codification carries an equal level of authority. The Codification is effective for interim and annual periods ending after September 15, 2009. Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as "FASB ASC". Implementation of the Codification did not have any impact on the Company's consolidated financial statements.Relationships

~~The~~Customers’ ~~following~~relationships ~~FASB~~represent ~~pronouncements~~the ~~have~~value attributed ~~been~~to ~~adopted~~customers’ byrelationships ~~the~~acquired ~~Company~~in ~~during~~asset ~~the~~acquisitions ~~nine~~and ~~months~~are amortized ~~ended~~over ~~April~~a ~~30,~~7-year ~~2010:~~period.

InLong-lived April 2009, FASB issued an update to FASB ASC 805, "Business Combinations", that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies. This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination. The Company adopted this Statement on August 1, 2009. Implementation of this update to FASB ASC 805 did not have any impact on the Company's consolidated financial statements.Assets

InThe ~~April~~Company ~~2009,~~evaluates ~~FASB~~property ~~issued~~and ~~FSP~~equipment ~~FAS 157-4, "Determining Fair Value When the Volume~~ and ~~Level~~amortizable ofintangible assets ~~Activity~~ for ~~the~~impairment ~~Asset~~whenever orcurrent ~~Liability~~events ~~Have Significantly Decreased~~ and ~~Identifying~~circumstances ~~Transactions~~indicate ~~That~~the carrying ~~Are~~amounts ~~Not~~may ~~Orderly",~~not tobe ~~address~~recoverable. ~~challenges~~The inevaluation ~~estimating fair value when the volume and level~~ of ~~activity~~long-lived assets for animpairment ~~asset~~requires ~~or liability have significantly decreased. This pronouncement emphasizes that even if there has been~~ a ~~significant~~high ~~decrease~~degree inof ~~the~~judgment ~~volume~~ and ~~level~~involves ~~of activity for~~ the ~~asset~~use orof significant ~~liability~~estimates and ~~regardless~~assumptions. ofIf the ~~valuation~~carrying ~~technique(s)~~amount ~~used,~~is ~~the~~greater ~~objective of a fair value measurement remains~~ than the ~~same.~~expected ~~Fair~~future ~~value~~undiscounted iscash ~~the~~flows ~~price~~to ~~that would~~ be ~~received~~generated, tothe ~~sell~~Company recognizes an ~~asset~~impairment orloss ~~paid~~equal to ~~transfer~~the aexcess, ~~liability~~if ~~in an orderly transaction (that is~~any, ~~not~~of athe ~~forced~~carrying ~~liquidation~~value over orthe ~~distressed~~fair ~~sale)~~value ~~between~~of ~~market participants at~~ the ~~measurement date under current market conditions~~asset. ~~This FSP is effective for interim and annual reporting periods ending after June 15, 2009.~~ The Company ~~adopted~~generally ~~this~~measures ~~Statement~~fair onvalue based ~~August~~upon 1,the ~~2009.~~present ~~Implementation~~value of ~~this~~estimated ~~Standard~~future ~~did~~net ~~not~~cash ~~have~~flows ~~any~~of ~~impact~~an onasset group ~~the~~over ~~Company's~~its ~~consolidated~~remaining ~~financial~~useful ~~statements~~life.

InRevenue June 2009, FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140". SFAS No. 166 amends SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" by eliminating the concept of special-purpose entities, requiring the reporting entity to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets, changes the requirements for the de-recognition of financial assets, and provides for the sellers of the assets to make additional disclosures. The Company adopted this Statement on August 1, 2009. Implementation of this Standard did not have any impact on the Company's consolidated financial statements.Recognition

The Company charges a recurring subscription fee for providing wireless broadband services to its subscribers. Revenue from service is recognized as monthly services are rendered in accordance with individual customer arrangements. Credit risk is managed by disconnecting services to customers whose accounts are delinquent for a specified number of days. Consistent with SFAS No. 51, installation revenue obtained from the connection of subscribers to the system is recognized in the period installation services are provided to the extent of related direct selling costs. Any remaining amount is deferred and recognized over the estimated average period that customers are expected to remain connected to the system. From time to time, the Company enters into barter arrangements whereby it provides certain customers with wireless broadband services in exchange for use of towers and equipment owned by customers. Revenue and expenses recorded under barter arrangements was $31,674 (2009 -6- $22,554).

InBasic June 2009, FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)". SFAS No. 167 addresses the effect on FASB Interpretation 46(R), "Consolidation of Variable Interest Entities" of the elimination of the qualifying special-purpose entity concept of SFAS No. 166, "Accounting for Transfers of Financial Assets". SFAS No. 167 also amends the accounting and ~~disclosure~~Diluted ~~requirements~~Net ofIncome ~~FASB Interpretation 46~~(RLoss) to enhance the timeliness and usefulness of information about an enterprise's involvement in a variable interest entity. The Company adopted this Statement on August 1, 2009. Implementation of this Standard did not have any impact on the Company's consolidated financial statements. Per Share

OnBasic ~~June~~loss ~~30,~~per ~~2009,~~share ~~FASB~~is ~~issued~~computed ~~Accounting~~by dividing ~~Standard~~net ~~Update~~loss ~~(ASU)~~by ~~No.~~the ~~2009-01~~weighted ~~(Topic~~average ~~105)~~number -of ~~Generally~~common ~~Accepted~~shares ~~Accounting~~outstanding for ~~Principles~~the -year. ~~amendments~~Diluted ~~based~~loss onper -share ~~Statement~~is ofcomputed ~~Financial~~by ~~Accounting~~dividing ~~Standards~~net ~~No.~~loss ~~168~~by ~~"The~~the weighted ~~FASB~~average ~~Accounting~~number ~~and~~of ~~Standards~~common ~~Codification~~shares ~~and~~outstanding ~~the~~plus ~~Hierarchy~~common ofstock equivalents ~~Generally~~(if ~~Accepted~~dilutive) ~~Accounting~~related ~~Principles".~~to ~~Beginning~~stock ~~with~~options ~~this~~and ~~Statement~~warrants ~~FASB~~for ~~will~~each noyear. There ~~longer~~were ~~issue~~no ~~new~~stock ~~standards~~options inor ~~the~~common ~~form~~equivalent ofshares ~~Statements,~~outstanding ~~FASB~~at ~~Staff Positions~~October 31, or2010 ~~Emerging~~and ~~Issues~~2009 ~~Task~~that ~~Force~~have ~~Abstracts.~~been ~~Instead,~~included itin ~~will~~dilutive ~~issue~~loss ~~Accounting~~per ~~Standard~~share calculation ~~Updates.~~as ~~This~~the ~~ASU~~effects ~~includes~~would ~~FASB~~have ~~Statement~~been Noanti-dilutive. ~~168~~Total inpotentially dilutive ~~its~~common ~~entirety.~~shares, ~~While~~relating ~~ASU's~~to ~~will~~stock ~~not~~purchase bewarrants ~~considered~~issuable ~~authoritative~~ in ~~their own right~~the future, ~~they~~as ~~will~~at ~~serve~~October to31, ~~update~~2010 ~~the~~totals ~~Codification~~10,666,730 ~~provide~~including ~~the~~5,614,929 ~~bases~~common shares ~~for~~issuable ~~conclusions~~on ~~and~~the ~~changes~~exercise inof ~~the~~warrants, ~~Codification~~4,285,714 ~~and~~common ~~provide~~shares ~~background~~issuable if ~~information about~~ the ~~guidance.~~$1,500,000 ~~The~~convertible ~~Codification~~debenture ~~modifies~~is ~~the~~converted ~~GAAP~~into ~~hierarchy~~common toshares ~~include~~at $0.35 ~~only~~per ~~two~~share ~~levels of GAAP: authoritative~~ and ~~non-authoritative. ASU No. 2009-01 became effective for the Company's quarter ended October 31~~766,087 ~~2009.~~common ~~Implementation~~shares ofto ~~this~~be ~~Standard~~issued ~~did~~in ~~not~~connection ~~have~~with ~~any impact on~~ the completion ~~Company's~~of ~~consolidated~~two ~~financial~~asset ~~statements~~purchase agreements.

~~In August 2009, FASB issued ASU No~~3. Property ~~2009-05 - Fair Value Measurements~~ and Disclosures (Topic 820) - Measuring Liabilities at Fair Value. This ASU clarifies the fair market value measurement of liabilities. In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach. ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.Equipment

InProperty ~~September 2009, FASB issued ASU No. 2009-12 - Fair Value Measurements~~ and ~~Disclosures~~equipment ~~(Topic~~consists ~~820) - Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent). This ASU permits use~~ of ~~a practical expedient, with appropriate disclosures, when measuring~~ the fair value of an alternative investment that does not have a readily determinable fair value. ASU No. 2009-12 became effective for the Company's quarter ended January 31, 2010. Since the Company does not currently have any such investments, the adoption of the ASU did not have any significant financial impact on the Company's financial statements.following:

In January 2010, FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU; however, the Company does not expect the adoption of this ASU to have a material impact on its financial statements.

	October 31, 2010 $		July 31, 2010 $

Computer and wireless equipment	1,190,047		1,094,215
Tower equipment, infrastructures and house drops	1,546,614		1,441,707
Fiber build-out and test equipment	142,560		121,601
Furniture and fixtures	75,075		74,562
Vehicles	168,629		168,629
Software	78,841		78,841

	3,201,766		2,979,555
Less: accumulated depreciation	(1,155,255	)	(961,595	)

	2,046,511		2,017,960
Land	15,553		15,000
Network replacement parts not put in use	392,132		392,132

Property and equipment, net	2,454,196		2,425,092

~~In February 2010, the FASB issued ASU No~~4. Deposits ~~2010-09 regarding subsequent events~~ and ~~amendments~~Other to certain recognition and disclosure requirements. Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU. The adoption of this ASU did not have a material impact on its financial statements.Assets

InDeposits April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 - Receivable - Loans and ~~Debt~~other ~~Securities~~assets ~~Acquired~~consist ~~with Deteriorated Credit Quality ("Subtopic 310-30"). Furthermore, the amendments clarify guidance about maintaining the integrity~~ of ~~a pool as~~ the unit of accounting for acquired loans with credit deterioration. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables--Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of this ASU; however, the Company does not expect the adoption of this ASU to have a material impact on its financial statements.following:

-7-

35. ~~Property~~ Customers’ ~~and Equipment~~Relationships

~~Property~~The ~~and~~carrying ~~equipment~~value ~~consists~~ of ~~the~~customers’ ~~following~~relationships acquired consists of:

	April 30, 2010 $	July 31, 2009 $
		October 31, 2010 $		July 31, 2010 $
Land	15,000	-
Capitalized value		3,436,993		3,406,167
Computer and wireless equipment including spare parts	1,254,465	554,908
Less: accumulated amortization		(554,470	)	(432,454	)
Towers, infrastructures and house drops	1,370,336	768,643
Customers’ relationships, net		2,882,523		2,973,713
Fiber build-outs	66,831	-
Furniture and fixtures	74,562	44,959
Vehicles	168,629	74,529
Software	76,342	42,183
	3,026,165	1,485,222
Less: accumulated depreciation	(783,242)	(462,547)
Property and equipment, net	2,242,923	1,022,675

46. ~~Deposits~~ Accrued ~~and Other Assets~~Liabilities

Deposits and other assets consist of the following:

	October 31, 2010 $	July 31, 2010 $

Accrued interest	242,445	184,838
Payroll and severance liabilities	212,777	177,090
Real property and sales taxes and other accruals	37,429	36,482

	492,651	398,410

	April 30, 2010 $	July 31, 2009 $
Non-refundable deposits	-	10,000
Operating lease deposits	86,682	86,682
Other long-term deposits	38,212	33,204
	124,894	129,886

7. Short-term Notes Payable

5. Customers' Relationships

	October 31, 2010 $	July 31, 2010 $

Notes payable, due on demand, unsecured and bearing interest at rates between 8% and 9.5% per annum (a $20,000 note does not bear interest).	330,000	340,000

Notes payable to the Chairman of the Board of the Company and a company beneficially owned bearing interest at 8% per annum.	49,755	35,000

Notes payable due to a director and a company controlled by a director. A $150,000 note is due January 1, 2011, unsecured and bearing interest at 9% per annum with interest payable quarterly. A note for $50,000 has no terms of repayment.	200,000	150,000

Notes payable due to a director, unsecured, $30,000 note due on March 27, 2011 and bearing interest at 8% per annum. A note for $100,000 has no terms of repayment and is due on demand.	130,000	30,000

Vendor Note, unsecured and bearing interest at 5% per annum. See Note 15 for legal proceedings.	326,000	326,000

Vendor Note, unsecured, bearing interest at 5% and repayable in 4 quarterly instalments of $2,762 plus interest with first payment due September 28, 2010.	11,050	11,050

Vendor Note, unsecured, non-interest bearing and due on August 20, 2010. See Note 13 for legal proceedings.	50,000	50,000

	1,096,805	942,050

~~The~~8. Long-term ~~carrying value of customers' relationships acquired as at April 30, 2010 and July 31, 2009 consists of:~~Debt

	April 30, 2010 $	July 31, 2009 $
		October 31, 2010 $	July 31, 2010 $
Capitalized value	3,426,813	1,939,700
Notes payable to Jay County Development Corporation. Non-interest bearing, repayable monthly based on the number of subscribers in Jay County, Indiana. Collateralized by certain equipment located in Jay County. Principal is currently repayable at $500 per month.		290,911	291,411
Less: accumulated amortization	(317,148)	(98,453)
Notes payable to Wabash Rural Electric Membership Cooperative (“Wabash”). Six separate notes were renewed pursuant to a Memorandum of Understanding effective September 24, 2009. Interest rates are between 5.7% and 7.45% annually and are collateralized by certain equipment in Wabash County, Indiana.		599,038	590,247
Customers' relationships, net	3,109,665	1,841,247
Note payable to Muncie Industrial Revolving Loan Fund Board. Repayable in monthly instalments of principal and interest of $4,570, matures on December 13, 2011, at which time the loan will be reviewed by Muncie’s Board of Directors. This note is collateralized by certain equipment in Muncie County and Delaware County, Indiana.		249,225	249,225
Note payable to Star Financial Bank. Interest is paid monthly at 8.6% per annum. This note was due February 1, 2010. This loan is collateralized by certain equipment and is guaranteed by the State of Indiana as to 80% of the loan.		179,749	187,846
Unsecured notes payable to the Chairman of the Company, the son of the Chairman of the Company and to companies controlled by the Chairman. (See Note 9 (d) for repayments over the next five years).		198,925	210,755
Convertible 8% debenture having a face value of $1,500,000 issued to a director including warrants to acquire up to 1,500,000 common shares at $0.50 per share expiring December 24, 2014. The debenture is convertible into common shares at a price of $0.35 per common share up to December 24, 2014.		927,369	900,689
Unsecured notes payable to a director of the Company, interest only at 8% and maturing April 2012.		470,000	470,000
Unsecured notes payable to a director of the Company. Repayable in monthly instalments of principal and interest totalling $4,613. Interest is 10% per annum.		48,594	59,644
Debentures, 8% interest paid quarterly of which $20,000 is due to a director of the Company. Various maturities between January, 2011 and June, 2012.		190,000	190,000
Unsecured vendor and investor notes payable with monthly or quarterly payments of principal and interest ranging from 5% to 10%. (See Note 13 for two long-term vendor notes that are subject to legal proceedings).		1,218,098	1,237,164
Total		4,371,909	4,386,981
Less: current portion		1,441,333	1,455,137
Long-term portion		2,930,576	2,931,844

~~6. Acquisition~~Long-term ofdebt ~~Assets~~principal repayments due over the next five years are as follows:

a) Rushville Internet Services LLC (Indiana)


Year	$	Year	$

2011	1,441,333	2014	166,898
2012	1,114,789	2015	1,050,895
2013	184,971	Thereafter	409,289

~~On May 23, 2009 the shareholders of Rushville Internet Services LLC ("RIS") agreed to wind-up RIS and sell its assets to the Company for $125,000~~9. Related ~~The~~Party ~~Company received their assets, being wireless equipment~~ Transactions and tower infrastructures, having a fair value of $68,706, and to settle inter-company debt of $56,294. On October 13, 2009 the Company issued 268,818 restricted common shares to the shareholders of RIS at a fair value of $0.465 per common share.Balances

ba) ~~AAA~~ The ~~Wireless~~Company’s capital lease obligations relate to assets leased from the Chairman of the Company or a company beneficially owned by the Chairman of the Company, ~~Inc.~~totalling $48,087 (~~Indiana~~July 31, 2010 - $58,186 (See Note 12).

Onb) Unsecured ~~January~~notes 7,payable ~~2010~~to the Chairman ~~Company~~of ~~acquired~~ the ~~telecommunication~~Company ~~network~~ and ~~system~~the ~~assets~~son of ~~AAA~~the ~~Wireless,~~Chairman ~~Inc.~~of ~~The~~the ~~total~~Company ~~purchase~~and ~~price~~to companies ~~was~~controlled ~~$493,545,~~by ~~which~~the ~~was paid in cash. The purchase price was allocated as follows: land - $15~~Chairman,~~000;~~ ~~towers,~~total ~~infrastructures and house and school drops -~~ $~~315~~248,~~232;~~680 ~~automobiles~~(July ~~- $16~~31,~~500;~~ ~~and~~2010 ~~computer and wireless equipment including spare parts~~ - $~~146~~245,~~813~~755). No value was placed on customers' relationships as these relationships had to be renewed through the efforts of the Company. The purchase price allocation was based on relative fair market values of all of the assets acquired.

~~-8-~~10. Common Stock

ca) ~~Clinton~~ The ~~County~~Company ~~Wireless~~issued 299,996 ~~LLC~~common ~~(Indiana)~~shares at $0.15 per share to settle an amount owing of $30,000 pursuant to a Services Agreement dated June 29, 2010;

~~On January 14, 2010 the Company acquired the customers' relationships and telecommunication network and system assets of Clinton County Wireless, LLC, located in Clinton County, Indiana.~~ b) The ~~total purchase price was $60,000 to be paid in common shares. The number of common shares was determined based on the 15 trading day average closing price of the~~ Company's ~~common~~is ~~shares~~committed ~~prior~~ to issue ~~March 15~~766,087 ~~2010, being $0.36. The total number of~~ common shares pursuant to betwo ~~issued~~completed isasset ~~176,667; these shares have not yet been issued. The~~ purchase ~~price was allocated $10,000~~ agreements to ~~property~~settle ~~and equipment and~~ $50232,~~000~~500 ~~to customers' relationships based on the relative fair values~~ of ~~the~~common ~~assets~~share ~~acquired~~commitments.

~~d) USppp, Inc~~11. Warrants ~~(Indiana)~~and Other Potentially Dilutive Securities

OnAs ~~March~~at 23October 31, 2010 the Company ~~acquired~~has common ~~the~~share ~~customers'~~purchase ~~relationships~~warrants ~~and~~issued ~~telecommunication network~~ and ~~system~~outstanding ~~assets~~to ~~of USppp, Inc., located in Decatur, Indiana. The total~~ purchase ~~price~~up ~~was $225,000. Consideration was $55,000 cash, $20,000 payable upon receiving certain deliverables, a long-term~~ to 5~~% note for $67~~,~~500 and $82~~614,~~500~~929 ~~to be paid in~~ common shares~~. The~~ ~~number~~at ofan ~~common shares was determined based on the 15 trading day~~ average ~~closing~~exercise price of ~~the Company's common shares prior to May 22, 2010, being~~ $0.~~3167.~~50 ~~The~~per ~~total number of~~ common ~~shares~~share having toan beaverage ~~issued~~remaining islife ~~260,526;~~of ~~these shares have not yet been issued~~2.29 ~~The~~years ~~purchase~~as ~~price was allocated $140,000 to telecommunication network assets and $85,000 to customers' relationships based on the relative fair values of the assets acquired.~~follows:

e) Bright Choice, Inc. (Ohio)

	Exercise Price	Expiry Date
#	$

1,199,408	.50	May 8, 2011
100,000	.50	June 24, 2011
4,287	.50	September 17, 2011
2,000,000	.50	November 10, 2011
139,420	.50	November 13, 2011
155,556	.45	December 1, 2011
77,569	.51	February 17, 2019
184,914	.58	March 27, 2019
139,490	.56	July 14, 2019
114,285	.50	April 29, 2011
1,500,000	.50	December 24, 2014

5,614,929

OnPursuant ~~March~~to ~~31,~~an ~~2010~~8% ~~the~~convertible debenture ~~Company~~having ~~acquired~~a ~~the~~face ~~customers'~~value ~~relationships and telecommunication network and system assets~~ of ~~Bright Choice, Inc., a subsidiary of Consolidated Electric Cooperative, a rural electric cooperative located in North Central Ohio. The total purchase price was~~ $~~267~~1,~~850. Consideration was $220~~500,000, ~~cash~~interest ~~and~~payable ~~a 5% note for $47~~quarterly,~~850.~~ ~~The~~the Company ~~purchase~~has ~~price~~reserved ~~was~~up ~~allocated $126,400~~ to ~~telecommunication network and system assets~~4, ~~$48~~285,~~600~~714 tocommon ~~vehicles~~shares ~~and $92,850~~ to ~~customers'~~be ~~relationships~~issued ~~based~~upon onconversion at ~~the~~$0.35 ~~relative~~per ~~fair values of the assets acquired~~share.

~~f) Lightspeed~~The ~~Wireless~~Company ~~(Ohio)~~is committed to issue 766,087 common shares pursuant to two completed asset purchase agreements to settle $232,500 of common share commitments. These shares will be issued upon receipt of required documents from the vendors.

~~On April 22, 2010 the Company acquired the customers' relationships and telecommunication network and system assets of Lightspeed Wireless, located in Berlin, Ohio~~12. ~~The total purchase price was $1,400,000. Consideration was $700,000 cash, a short-term 5% note of $50,000, a long-term 6% note for $500,000 and $150,000 to be paid in common shares.~~ ~~The~~Lease number of common shares will be determined based on the 15 trading day average closing price of the Company's common shares prior to June 21, 2010. The purchase price was allocated $237,000 to telecommunication network and system assets, $13,000 to vehicles and $1,150,000 to customers' relationships based on the relative fair values of the assets acquired.Obligations

~~7. Accrued~~Future ~~Liabilities~~minimum lease payments for equipment acquired under non-cancellable capital leases and operating leases with initial terms of more than one year are as follows:

	April 30, 2010 $	July 31, 2009 $
Accrued interest	119,783	65,822
Due to Rushville Internet Services, LLC (Note 6 (a))	-	56,294
Payroll and severance liabilities	33,105	55,486
Other current liabilities	13,094	35,829
		-
	165,982	213,431

The principal portion of capital lease obligations is to be repaid as follows:

-9-

	Capital Leases	Operating Leases
Year ending July 31,	$	$

2011	62,760	375,963
2012	17,829	195,673
2013	6,814	-

Total minimum lease payments	87,403

Less: amounts representing interest	8,163

Present value of net minimum lease payments	79,240
Less: current portion	56,654

Long-term capital lease obligations	22,586

8. Short-term Notes Payable

		$

2011		56,654
2012		16,089
2013		6,497

	April 30, 2010 $	July 31, 2009 $
Notes payable, due on demand, unsecured and bearing interest at rates between 8% and 9.5% per annum	310,000	203,500
Notes payable due to the Chairman of the Board of the Company and a company beneficially owned. These notes were re-negotiated into long-term notes (See Note 9)	-	8,416
Note payable due to a company controlled by a director, due January 1, 2011, unsecured and bearing interest at 9% per annum with interest payable quarterly	150,000	-
Note payable due to a director, unsecured, due on September 27, 2010 and bearing interest at 8% per annum	30,000	-
Notes payable, unsecured, due on demand and bearing interest at 10% per annum	10,000	10,000
Vendor Notes, unsecured, due on demand having had an interest rate of 5%. These notes were renegotiated into long-term notes (See Note 9)	-	944,800
Vendor Note, unsecured, bearing interest at 5% and repayable $5,000 per month plus interest with final payment due December, 2010	38,245	46,000
Vendor Note, unsecured, bearing interest at 5% and repayable in 4 quarterly instalments of $11,963 plus interest with first payment due September, 2010	47,850	-
Vendor Note, unsecured, non-interest bearing and due on demand	50,000	-
	636,095	1,222,716

13. Legal Proceedings

9The Company has been served with two Complaints filed with the Rush Circuit Court in the State of Indiana dated August 25, 2010 and September 1, 2010 and one Complaint filed with the Holmes County Court in the State of Ohio dated September 16, 2010. ~~Long~~ The plaintiffs have made claims against the Company for failure to make required instalment payments that were due pursuant to promissory notes. The Company has recorded all debt relating to these claims as current liabilities under current portion of long-term ~~Debt~~debt. On September 14, 2010 the Company filed an Appearance and Notice of Extension of Time to answer the Complaints. On November 8, 2010 the Company filed an Answer and Counterclaim with the Holmes County Court. This Answer and Counterclaim includes counterclaims for various damages, including punitive damages, suffered by the Company and also seeks an injunction. Also on November 8, 2010 the Company filed an Answer to one of the Rush Circuit Court Complaints and is in the process of filing the second Answer. As the Company has recorded all amounts owing as current liabilities the Company expects to receive favourable outcomes on all three legal proceedings mentioned above.

	April 30, 2010 $	July 31, 2009 $
Notes payable to Jay County Development Corporation. Non-interest bearing, repayable monthly based on the number of subscribers in Jay County, Indiana. Collateralized by certain equipment located in Jay County. Principal currently repayable at $500 per month	292,411	296,911
Notes payable to Wabash Rural Electric Membership Cooperative ("Wabash"). Six separate notes were renewed pursuant to a Memorandum of Understanding effective September 24, 2009. Accrued interest and penalties to this date, totalling $115,111, were added to the principal amounts outstanding. Interest rates are between 5.7% and 7.45% annually and are collateralized by certain equipment in Wabash County, Indiana. Monthly payments of $448 begin on January 31, 2010 on one note with final payment due December 31, 2015. Quarterly payments of $23,469 began on December 31, 2009 on three notes with final payments due between September, 2016 and August, 2017. Quarterly payments of $945 begin on December 31, 2009 on one note with final payment due July 31, 2014 and quarterly payments of $835 on one note begins on January 31, 2010 with final payment due July 31, 2017	587,756	629,388
Note payable to Muncie Industrial Revolving Loan Fund Board. Interest of 5% only was paid to July 13, 2009. Monthly principal and interest of $4,570 payments started August 13, 2009 and will end December 13, 2011, at which time the loan will be reviewed by Muncie's Board of Directors. This note is collateralized by certain equipment in Muncie County and Delaware County, Indiana	252,741	283,741
Note payable to Star Financial Bank. Interest is paid monthly at 8.6% per annum. This note was due February 1, 2010. The Company has received a notice of default. This loan is collateralized by certain equipment.	190,581	193,170
Notes payable to First Farmers Trust & Bank. These notes were repaid in full	-	43,076
Unsecured notes payable to the, Chairman of the Company, the son of the Chairman of the Company and to companies controlled by the Chairman. Repayable in monthly instalments of principal and interest at 8%, totalling $5,199, to December, 2010, $4,845 from January, 2010 to May, 2012 and $3,492 from June, 2012 to April 2014	225,101	217,663

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

~~-10-~~FORWARD LOOKING STATEMENTS

Senior subordinated convertible debenture having a face value of $1,500,000 issued to a director including warrants to acquire up to 1,500,000 common shares at $0.50 per share expiring December 24, 2014. This convertible debenture bears interest at 8% per annum and is convertible into common shares at a price of $0.35 per common share up to December 24, 2014. This debenture was discounted by $659,873 due to the beneficial conversion feature and the value of warrants. The discounted value, of $840,127, is being accreted up to its face value of $1,500,000 over the term of the debenture	874,776	-
Unsecured notes payable to a director of the Company, interest only at 8% and maturing April 2012	470,000	-
Unsecured notes payable to a director of the Company with monthly payments of principal and interest ranging from 8% to 10%	70,444	102,733
Senior subordinated redeemable debentures, 8% interest paid quarterly of which $20,000 is due to a director of the Company	30,000	20,000
Unsecured vendor and investor notes payable with monthly or quarterly payments of principal and interest ranging from 5% to 10%	1,448,940	160,892
Total long-term debt	4,442,750	1,947,574
Less: current portion	1,045,340	511,521
Long-term portion	3,397,410	1,436,053

This report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this report under “Risk Factors”. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this report. Forward-looking statements in this report include, among others, statements regarding:

~~Long-term~~our ~~debt~~capital ~~principal~~needs; ~~repayments due over the next five years are as follows:~~

Year	$	Year	$
2011	1,045,340	2014	391,801
2012	1,054,438	2015	1,063,102
2013	445,317	Thereafter	442,751

business plans; and
10expectations. ~~Related Party Transactions and Balances~~

~~a) Included~~While inthese ~~accrued~~forward-looking ~~liabilities at July 31~~statements, ~~2009~~and ~~was~~any assumptions ~~$56,294~~upon ~~owing~~which tothey ~~Rushville~~are ~~Internet Services~~based, ~~LLC~~are ~~("RIS")~~made ~~which represented amounts due to RIS under certain lease agreements. The Company and RIS have shareholders~~ in ~~common.~~good ~~The~~faith ~~shareholders of RIS agreed to wind-up RIS~~ and ~~sell~~reflect ~~its~~our current ~~assets~~judgment toregarding ~~the~~future ~~Company for $125~~events,~~000.~~ ~~The~~our ~~Company~~actual ~~received~~results ~~their~~will ~~assets,~~likely ~~being wireless equipment and tower infrastructures~~vary, sometimes ~~having a fair value of $68~~materially,~~706,~~ ~~and~~from toany ~~settle inter-company debt of $56~~estimates,~~294.~~ ~~All shareholders of RIS accepted to receive restricted common shares of the Company. On October 13~~predictions, ~~2009 the Company issued 268~~projections,~~818~~ ~~restricted~~assumptions or ~~common~~other ~~shares~~future toperformance ~~the~~suggested ~~shareholders~~herein. Some of ~~RIS~~the atrisks aand assumptions ~~fair value of $0.465 per common share.~~include:

~~b) The~~our ~~Company's~~need ~~capital~~for ~~lease~~additional financing; ~~obligations relate to assets leased from the Chairman of the Company or a company beneficially owned by the Chairman of the Company, totalling $71,379 (July 31, 2009 - $97,015 (See Note 13).~~
~~c) The~~ ~~Wabash~~our ~~Rural~~limited ~~Electric~~operating history; ~~Membership Cooperative's ("Wabash") Chief Executive Officer is a director of the Company. See Note 9 for notes owing to Wabash.~~
~~d) Unsecured~~our ~~notes~~history ~~payable to the Chairman~~ of operating ~~the~~losses; Company and the son of the Chairman of the Company and to companies controlled by the Chairman, totalling $225,101 (July 31, 2009 - $217,663), are repayable in monthly instalments of principal and interest at 8% with final payment due April, 2014.
~~e) On~~ ~~October 20, 2009~~ the ~~Company~~competitive ~~received $1,000,000 from a director and major shareholder~~ environment in ~~addition~~which towe ~~$400,000~~operate; received on July 3, 2009. On October 20, 2009 the director subscribed for 4,000,000 units at $0.35 per unit. These units were issued on November 10, 2009. Each unit contained one common share and one half of one common share purchase warrant. Each whole warrant is exercisable into one common share at an exercise price of $0.50 per share expiring November 10, 2011.
~~f) On~~changes November 23, 2009 the Company received $150,000 from a company controlled by a director of the Company and issued a promissory note due January 1, 2011, which is unsecured and bears interest at 9% per annum with interest payable quarterly. The Company is also indebted to the director in ~~the~~governmental regulation ~~amount of $20,000 which is secured by a senior subordinated debenture which bears interest at 8% per annum, interest paid quarterly~~ and ~~due~~administrative ~~January~~practices; ~~2, 2011.~~
~~-11-~~ our dependence on key personnel;
~~g) On~~conflicts ~~December 24, 2009 the Company received $1,500,000 from a director and major shareholder~~ of ~~the Company and issued a senior subordinated convertible debenture having a face value~~ interest of ~~$1,500,000,~~our ~~plus~~directors ~~warrants to acquire up to 1,500,000 common shares at $0.50 per share expiring December 24, 2014. This convertible debenture accrues interest at 8% per annum~~ and ~~principal~~officers; and interest is convertible into common shares at a price of $0.35 per common share up to December 24, 2014 being the maturity date. The Company discounted this debenture by $222,794 being the relative fair market value of the beneficial conversion feature. The Company also valued the warrants at $437,079 being the relative fair value of the warrants. The value of the warrants were discounted from the face value of the debenture. The total discounted value of the debenture, being $840,127, is being accreted up to its face value to maturity, being December 24, 2014. Total accreted interest expense for the period ended April 30, 2010 is $34,649.
~~h) In~~our ~~April,~~ability ~~2010 the Company received $500,000 from a director~~ to ~~close~~fully implement ~~two~~our ~~acquisitions.~~business ~~Two~~plan; ~~notes, totalling $470,000 are unsecured, bear interest at 8% per annum and mature in April 2012. A $30,000 note is unsecured, bears interest at 8% per annum and is due September 27, 2010.~~
~~i) On~~ ~~April~~our ~~20,~~ability ~~2010 the Company received $225,000 from a director of the Company pursuant~~ to effectively amanage ~~sale~~our ofgrowth; ~~towers to the director. The towers had a net book value of $184,281~~ and ~~the Company recorded a gain on sale of assets of $40,719.~~
~~11. Common~~other ~~Stock~~regulatory, legislative and judicial developments.

~~a) On~~We ~~June~~advise ~~1, 2009~~ the ~~Company~~reader ~~entered~~that ~~into~~these ancautionary ~~agreement~~remarks expressly ~~with~~qualify ~~Onyx~~in ~~Consulting~~their ~~Group,~~entirety ~~LLC ("Onyx") to manage~~ all ~~aspects~~forward-looking ofstatements ~~the~~attributable to ~~Company's~~us ~~investor~~or ~~and~~persons ~~media~~acting ~~relations~~on ~~program~~our behalf. Important ~~The~~factors ~~Company~~that ~~paid~~you ashould ~~fee~~also consider, ~~to Onyx in the amount of $40~~include,~~000~~ ~~for~~but ~~the~~are ~~period~~not ~~June~~limited ~~1, 2009~~ to ~~November 30~~, ~~2009 and issued 350,000 restricted common shares of~~ the ~~Company~~factors ~~having~~discussed aunder ~~fair~~“Risk Factors” ~~value of $0.355 per common share or $124,250~~ in ~~total.~~this ~~The Company is seeking an injunction on these shares issued due to non performance of their contract~~report. ~~The expense and prepaid expense previously recorded has been reversed and additional paid in capital has been reduced accordingly.~~

~~b) On~~The ~~August~~forward-looking ~~18,~~statements ~~2009,~~in ~~pursuant~~this report toare ~~two~~made ~~completed~~as ~~Asset~~of ~~Purchase~~the ~~Agreements,~~date ~~the~~of ~~Company~~this ~~issued~~report ~~229,855~~and ~~common~~we ~~shares~~do ~~having~~not aintend ~~fair~~or ~~value~~undertake to ofupdate ~~$0.71~~any ~~per~~of ~~share,~~the ~~totalling~~forward-looking ~~$164,000,~~statements to ~~acquire~~conform ~~tower~~these ~~infrastructures,~~statements ~~wireless~~to actual ~~equipment~~results, ~~and~~except ~~customers'~~as ~~relationships.~~required ~~This~~by ~~amount~~applicable ~~was~~law, ~~recorded~~including asthe ~~common~~securities laws ~~stock~~of ~~reserved~~the asUnited ~~at July 31, 2009~~States.

c) On October 13, 2009 the Company acquired tower infrastructures and tower and customer premises equipment and settled an inter-company liability. The Company issued, as consideration, 268,818 common shares at $0.465 per share. REFERENCES

~~d) The~~As ~~Company~~used ~~received~~in ~~$197,594~~this ~~pursuant~~quarterly toreport: ~~Unit~~(i) ~~Private~~the ~~Placement~~terms ~~Subscription~~“we”, “us”, ~~Agreements~~“our”, ~~with~~“Omnicity” ~~certain~~and ~~private~~the ~~investors. The~~ “Company” ~~issued~~mean ~~278,840~~Omnicity ~~units at $0~~Corp.35; ~~per~~(ii) ~~unit~~“SEC” refers onto ~~November~~the ~~13,~~Securities ~~2009~~ and isExchange ~~committed~~Commission; to(iii) ~~issue~~“Securities aAct” ~~further~~refers to ~~285,714~~the ~~Units.~~United ~~Each~~States Securities ~~contains~~Act ~~one common share and one half~~ of ~~one~~1933, ~~common~~as ~~share~~amended; ~~purchase~~(iv) ~~warrant.~~“Exchange Act” ~~Each~~refers ~~whole~~to ~~warrant~~the isUnited ~~exercisable~~States ~~into~~Securities ~~one~~Exchange ~~common~~Act ~~share~~of at1934, ~~$0.50~~as amended; ~~per~~and ~~share~~(v) ~~expiring~~all ~~November~~dollar ~~13,~~amounts ~~2011~~refer as to ~~139,420~~United ~~warrants~~States ~~and~~dollars ~~June,~~unless otherwise ~~2012 as to 142,857 warrants~~indicated.

~~e) The~~Plan Company received $1,000,000 from a director and major shareholder on October 20, 2009. These funds plus $400,000 received on July 3, 2009 were combined and a subscription agreement for 4,000,000 units at $0.35 per unit was executed on October 20, 2009. These units were issued on November 11, 2009. Each unit contained one common share and one half of ~~one common share purchase warrant. Each whole warrant is exercisable into one common share at an exercise price of $0.50 per common share expiring November 11, 2011.~~Operations

~~f) See~~Our ~~Note~~business 6plan ~~for~~is ~~common~~to ~~shares~~be ~~committed~~a torural bewireless ~~issued.~~internet service ~~The~~provider ~~Company~~in isthe ~~committed~~United States through a consolidation strategy and organic growth of all acquired business units and to ~~issuing~~partner ~~437~~with REMCs,~~193~~ ~~common~~Telcos and ~~shares~~local ~~pursuant~~governments tofor ~~two~~nationwide ~~completed~~marketing. ~~asset~~We ~~purchase~~also ~~agreements~~plan to ~~settle~~partner ~~$142,850~~with regional and national telecommunication companies for the delivery of ~~common~~voice ~~share~~services and ~~commitments.~~complete ~~The~~negotiations ~~Company~~and islogistics ~~also~~of ~~committed~~DirecTV resell agreements. We further plan to ~~issuing~~partner ~~common~~with ~~shares~~local governments to ~~settle~~provide ~~$150~~essential services,~~000.~~ including ~~The~~mobile ~~number~~internet offor ~~common~~emergency ~~shares~~mobile ~~will~~communications, befire ~~determined~~and ~~based~~police and onto ~~the~~establish 15new ~~trading~~utility ~~day~~applications ~~average~~such ~~closing~~as ~~price~~automated ofmeter ~~the~~reading. ~~Company's~~We plan ~~common~~to ~~shares~~bring ~~prior~~WISP based services to ~~June~~rural 21America through three distinct market channels: (1) Telco and Electric partnerships, ~~2010~~(2) strategic acquisitions and (3) local government and private enterprise partnerships.

~~g) The~~Utilizing ~~Company~~our ~~issued~~relationship ~~254,285~~with ~~common~~the ~~shares~~REMCs asand "value ~~follows:~~added" 5institutional services and facilities we provide for municipalities and local governments,~~000~~ ~~common~~we ~~shares~~plan to ~~acquire~~organize aand ~~vehicle~~consolidate within ~~valued~~the atrural ~~$1,500;~~broadband ~~14,285~~market ~~common~~initially ~~shares~~in ~~valued~~Indiana atand ~~$5,000~~then toin ~~settle~~the Midwestern aUnited ~~financing~~States ~~obligation;~~and ultimately nationwide. Collaborations with both the REMCs and ~~issued~~municipalities ~~235~~may act as effective barriers for competition and provide additional sources of revenue and customer service for the REMCs and municipalities as well as income and cash flow for our company. The bundling of broadband services,~~000~~ ~~common~~including ~~shares~~internet, ~~valued~~voice, atand ~~$70~~video,~~000~~ ~~pursuant~~in topartnership ~~two~~with rural ~~consulting~~electric ~~contracts~~and/or ~~that~~municipal ~~began~~services ~~after~~provides ~~April~~an 30opportunity to imbed, cross ~~2010.~~promote, ~~This~~and ~~amount~~extend ~~was~~services ~~recorded~~in ascollaboration awith ~~prepaid~~these ~~expense~~institutional providers.

~~h) On~~Our ~~April~~plan ~~26, 2010 the Company settled $80,000~~ of ~~short-term~~operations ~~debt by issuing 228,571 Units at $0.35 per Unit pursuant to two Unit~~ for ~~Debt~~the ~~Private~~next ~~Placement~~twelve ~~Subscription~~months ~~Agreements. Each unit contained one common share and one half of one common share purchase warrant. Each whole warrant~~ is ~~exercisable into one common share at an exercise price of $0.50 per common share expiring April 29, 2012.~~ to:

~~-12-~~Future Financing Requirements

~~12. Warrants~~develop and ~~Capital~~expand, ~~Stock~~through ~~Issuable~~organic ~~Upon~~growth, ~~Conversion~~the subscriber base through our sales and marketing programs, to increase our number of sales ~~Debentures~~teams in the field, and to launch new marketing initiatives tailored to specific markets;
a)acquire, ~~Warrants~~and transition into our operations assets of competing WISP operators and expand our network in Indiana , Ohio, and other states, and continue expansion into all of Midwest USA by identifying strategic regional acquisitions;
~~Pursuant~~launch ~~to a Master Lease Agreement with Agility Venture Fund II, LLC ("Agility II") dated December 24, 2008,~~ the ~~Company~~next ~~and~~generation ~~Agility~~of ~~agreed~~WiMax toequipment ~~provide~~in all ~~funding under~~ new ~~sale~~builds ~~lease back arrangements totalling $1,000,000. This new facility is in addition to~~ and in ~~conjunction~~all ~~with~~rebuild aopportunities ~~November 6, 2006 agreement. On February 17, 2009, March 27, 2009, July 9, 2009 and July 14, 2009 the Company received an aggregate of $749,749 pursuant~~ to ~~four~~standardize ~~sale~~Omnicity networks ~~leaseback schedules completed - $689,368 in connection~~ with ~~sale~~carrier ~~leaseback~~grade ~~arrangements~~deployments; ~~pursuant to the Master Lease Agreements and an aggregate of $60,381 in connection with sale leaseback arrangements for assets purchased from various unrelated vendors.~~
~~Each~~increase ~~sale~~operational ~~leaseback~~cash ~~transaction~~flow ~~requires~~to aover ~~10%~~$250,000 per ~~deposit~~month ~~as additional security for the stream of lease payments~~ and ~~30%~~build ~~warrant coverage as~~ a ~~financing~~liquidity ~~expense. Each~~floor ~~lease~~under ~~agreement~~operations ~~is for a period~~ of 36$200,000 ~~months~~minimum by July ~~with~~31, a2011; buy-out at the end of the lease equal to the fair value of the equipment at that time. Our Chief Executive Officer and Chairman of the Board of the Company have provided personal guarantees for all remaining lease payments.
~~Pursuant~~continue to ~~Warrant~~partner ~~Agreements appended to the Master Lease Agreements~~ with ~~Agility~~Rural ~~and~~Electric Membership ~~Agility~~Cooperatives II"REMCs", ~~the~~local ~~Company was obligated to provide the lessor with 30% warrant coverage. On June 24, 2009, the Company settled the commitment to issue warrants under the November 6, 2006 Master Lease Agreement~~ and ~~issued~~State ~~155~~governments,~~556~~ Rural ~~warrants~~Telcos exercisable at $0.45 per common share expiring December 1, 2011. Also on June 24, 2009 the Company settled the commitments to issue warrants on the first two of four sale leaseback schedules. The Company issued 77,569 warrants exercisable at $0.51 per common share expiring February 17, 2019 and ~~issued~~Original ~~184,914~~Equipment ~~warrants~~Manufacturers ~~exercisable~~"OEMs" ~~at $0.58 per common share expiring March 27, 2019. These warrants were valued at $126,907 and charged as a financing expense. The Company was committed~~ to efficiently ~~issuing 139,490 share purchase warrants to acquire 139,490 common shares at an exercise price of $0.56 per common share expiring July 14, 2019 pursuant to the July 9, 2009~~ and ~~July~~cost ~~14,~~effectively ~~2009~~expand ~~sale~~our ~~leaseback~~network ~~arrangements.~~across ~~These~~rural ~~warrants were issued on October 13, 2009.~~America; and
~~See~~develop ~~Note 11 (d) (e)~~ and ~~(h)~~expand ~~for~~our ~~2,253,705~~service ~~share~~offerings ~~purchase~~to become ~~warrants issued in connection with~~ a ~~$0.35~~total ~~per~~broadband ~~Unit~~solution ~~private~~including ~~placements.~~VOIP ~~See~~and ~~Note 10 (g) for 1,500,000 share purchase warrants issued in connection with a senior subordinated convertible debenture agreement~~video. ~~These warrants are exercisable at $0.50 per share.~~

AsAt atOctober ~~April 30~~31, 2010, we had cash of $1,000 and a working capital deficit of $4,123,000. A total of $165,000 was loaned to the Company by ~~has~~related ~~common~~parties ~~share~~during ~~purchase~~the ~~warrants~~three ~~issued~~months ended October 31, 2010. We estimate that approximately $6 million will be required during the remainder of the year ended July 31, 2011 to finance our short-term working capital deficit and ~~outstanding~~to finance the expansion of, and the addition of subscribers through acquisition to, ~~purchase~~our upexisting and to be acquired network infrastructures. A total of $1 million will be required for working capital purposes, $1.5 million for organic growth and $3.5 million for acquisitions. Upon closing our second large acquisition in Ohio at the end of March,~~614~~ 2010,~~929~~ ~~common~~and ~~shares~~with ata anreduction ~~average~~of employees, ~~exercise~~we ~~price~~became operationally cash flow positive and will require no additional funds to finance operational deficits. We will continue to seek a combination of $equity and long-term debt financing as well as other traditional cash flow and asset backed financing to meet our financing needs and to reduce our overall cost of capital.50 ~~per~~Additionally, ~~common~~in ~~share~~order ~~having~~to anaccelerate ~~average~~our ~~remaining~~growth rate ~~life~~and to finance general corporate activities, we may supplement our existing sources of 2funds with financing arrangements at the operating system level or through additional borrowings, joint ventures or other off balance sheet arrangements.8 ~~years~~As a further capital resource, we may sell or lease certain wireless rights or assets from our portfolio as ~~follows:~~appropriate opportunities become available. However, there can be no assurance that we will be able to obtain any additional financing, on acceptable terms or at all.

~~1,199,408~~Current ~~warrants~~Financing ~~exercisable at $0.50 expiring May 8, 2011;~~Arrangements

~~100~~We are currently in negotiations to raise $1 million to $3 million under a capital lease program with private investors to fund our acquisitions and organic growth. We expect to close this financing by December 31,~~000~~ ~~warrants~~2010. ~~exercisable~~We atare also in negotiations to raise $02.505 ~~expiring~~million ~~June~~in 24equity with private investors. In addition to the proposed equity injection of $2.5 million, ~~2011;~~expected to complete by December 31, 2010, a commitment for three additional tranches of $2. 5 million, $7.5 million in total, will be made. These additional financings will be in the form of convertible debentures to be funded when the Company needs the funds.

4We will continue to seek traditional cash flow and asset backed financing to supplement our efforts discussed above and to reduce our overall cost of capital. Additionally,~~287~~ ~~warrants~~in ~~exercisable~~order to accelerate our growth rate and to finance general corporate activities, we may supplement our existing sources of funds with financing arrangements at $0the operating system level or through additional borrowings, joint ventures or other off balance sheet arrangements.50 ~~expiring~~As ~~September~~a 17further capital resource, ~~2011;~~we may sell or lease certain wireless rights or assets from our portfolio as appropriate opportunities become available. However, there can be no assurance that we will be able to obtain any additional financing, on acceptable terms or at all.

~~2,000,000~~Results ~~warrants~~of ~~exercisable at $0.50 expiring November 10, 2011;~~Operations

~~139,420~~Three ~~warrant~~months ~~exercisable~~ended atOctober ~~$0.50~~31, ~~expiring~~2010 ~~November~~and ~~13, 2011;~~2009

~~155~~The following table sets forth certain financial information relating to the Company for the three months ended October 31,~~556~~ ~~warrants~~2010 (“2010”) ~~exercisable~~and atOctober $031, 2009 (“2009”).46 ~~expiring~~The ~~December~~financial information presented has been rounded to the nearest thousand $ and is derived from the unaudited interim consolidated financial statements included under Item 1, ~~2011;~~in this Form 10-Q.

77,569 warrants exercisable at $0.51 expiring February 17, 2019;

	Three Months Ended October 31, 2010 $		Three Months Ended October 31, 2009 $

Sales, net	1,262,000		617,000

Expenses:
Service costs	88,000		14,000
Plant and signal delivery	439,000		338,000
Marketing and sales	2,000		2,000
General and administration	171,000		294,000
Salaries and benefits	523,000		411,000
Depreciation and amortization	316,000		170,000

Total Expenses	1,539,000		1,229,000

Loss from Operations	(277,000	)	(612,000	)

Other Income (Expense):
Other income	1,000		47,000
Gain on sale of assets, net	5,000		-
Financing expense	(11,000	)	-
Interest expense	(118,000	)	(79,000	)

Total Other Income (Expense)	(123,000	)	(32,000	)

Net Loss	(400,000	)	(644,000	)

Net Loss per Share – Basic and Diluted	(.01	)	(.02	)

~~184,914~~The ~~warrants~~following discussion ~~exercisable~~should atbe ~~$0.58~~read ~~expiring~~in ~~March~~conjunction ~~27,~~with ~~2019;~~the unaudited interim consolidated financial statements (including the notes thereto) included under Item 1 in this Form 10-Q.

~~139,490 warrants exercisable at $0.56 expiring July 14, 2019;~~Revenues

~~114~~The Company's revenues for 2010 increased by $645,~~285~~000 to ~~warrants~~$1,262,000 ~~exercisable~~(2009 at- $0617,000) an increase of 105%.50 ~~expiring~~These ~~April~~significant increases 29were achieved mainly through our Lightspeed and BrightChoice Ohio acquisitions and through organic growth. The number of subscribers stayed constant at 11,500 ~~2011;~~during the three months ended October 31, 2010. This subscriber count does not differentiate a subscriber, for example, one school, hospital or business subscriber is counted as one subscriber. On an equivalent subscriber unit basis we stayed constant at 12,350 during the three months ended October 31, 2010. This is important to note because going forward the Company will be adding schools, hospitals and business accounts at an accelerated rate. The Company receives revenue mainly from monthly service and modem rental fees collected from its subscribers. The Company’s installation revenue, while representing 6% of revenues currently, is expected to increase rapidly as we complete current financing arrangements and, as a result, we expand our marketing efforts. The Company also receives web hosting fees, fiber construction project fees and late fees which together represent less than 1% of total revenue. The Company expects revenues to increase rapidly as a result of organic growth, planned acquisitions and increase in average revenue per unit (“ARPU”).

~~1,500,000~~Operational ~~warrants exercisable at $0.50 expiring December 24, 2014.~~Expenses

b)Operational ~~Capital~~expenses ~~Stock~~include ~~Issuable~~service ~~upon~~costs, ~~Conversion~~plant ofand signal ~~Convertible~~delivery, ~~Securities~~marketing and sales, general and administration and salaries and benefits, stock based compensation and depreciation and amortization.

~~Pursuant~~Service tocosts aninclude 8%the ~~senior~~cost ~~subordinated~~of ~~convertible~~billing ~~debenture~~and ~~with~~collection, ~~interest~~the ~~accruing~~cost of tobuying ~~maturity~~DSL service and the ~~Company~~cost ~~has~~of ~~reserved~~providing upLifeline and satellite services in Ohio. During 2010, service costs increased by $74,000 to 4$88,~~405~~000 (2009 - $14,~~009~~000). This ~~common~~increase ~~shares~~was due mainly to the acquisition of Bright Choice, Inc. in Ohio. Approximately two-thirds of Bright Choice revenue comes from satellite and Lifeline services which started in April, 2010. The increase also comes from an increase in the number of customers accounts offset by a decrease in the cost of collection.

Plant and signal delivery expenses include the rental of towers, the cost of internet transmission (“backhaul”) the cost of installing equipment on the towers and at customers’ premises (“housedrops”) and the operating lease costs of housedrop or tower equipment. We currently have a portfolio of transmission rights covering 452 tower sites located principally in Indiana and Ohio. These markets represent approximately 434,000 households, approximately 369,000 of which are believed to be serviceable by line-13of-sight transmissions from Omnicity antenna locations. During 2010, plant and signal delivery expenses increased by $101,000 to $439,000 (2009 - $338,000), an increase of 30%. The increase in revenues was 105% during this period. As subscribers are added to the network the incremental cost of providing our signal to that subscriber is lower. This increase was due mainly to the increase in the number of towers under rental arrangements, the amount of backhaul needed to service the increase in subscribers, the increase in tower and customer premises equipment being leased pursuant to operating lease arrangements and the increase in customer installations. Plant and signal delivery costs per customer will significantly decrease as the Company populates its towers with customers. The Company, on average, has a penetration of approximately 4% of homes passed whereas the minimum target penetration is at least 20% (>74,000 subscribers) which is the penetration rate in the Wabash REMC coverage area.

13Marketing and sales expenses include REMC fees, advertising and preparation of marketing materials. ~~Lease~~ ~~Obligations~~During 2010, marketing and sales expenses stayed constant at $2,000. Marketing and sales expenses are expected to significantly increase during 2011 as the Company increases its marketing plan to significantly increase organic growth. The Company now has four full-time sales people, which costs are included in salaries and benefits.

~~Future~~General ~~minimum~~and ~~lease~~administration expenses include professional fees (legal, audit, accounting and outside professional consulting), investor relations consulting fees, office expenses (including rent, property tax, utilities, telephone and insurance), travel and automobile, software fees and fees associated with late payments ~~for~~and ~~equipment~~bank ~~acquired~~charges. ~~under~~During ~~non~~2010, general and administration expenses decreased by $122,000 to $171,000 (2009 -~~cancellable~~ ~~capital~~$294,000), ~~leases~~a decrease of 42%. Travel and automobile ~~operating~~expenses ~~leases~~decreased by $7,000 to $13,000 (2009 - $20,000); fees associated with ~~initial~~late ~~terms~~payments ofand ~~more~~bank ~~than~~charges ~~one~~increased ~~year~~by $7,000 to $21,000 (2009 - $14,000); telephone costs increased by $7,000 to $28,000 (2009 - $21,000); rent increased by $6,000 to $26,000 (2009 - $20,000); investor relations expenses decreased by $105,000 to $5,000 (2009 - $110,000) and professional fees decreased by $20,000 to $14,000 (2009 - $34,000). General and administration expenses are asnot ~~follows:~~expected to increase significantly in 2011 in relation to increased revenue. As the Company grows, general and administration expenses become significantly lower on a percentage of revenue basis.

	Capital Leases	Operating Leases
Twelve months ending April 30,	$	$
2011	46,798	391,963
2012	19,738	330,034
2013	12,015	20,875
2014	1,649	-
2015	-	-
Total minimum lease payments	136,999
Less: amounts representing interest	12,423
Present value of net minimum lease payments	124,576
Less: current portion	84,708
Long-term capital lease obligations	39,868

Salaries and benefits for 2010 have increased by $112,000 to $523,000 (2009 - $411,000) an increase of 27% while revenue increased by 105%. This increase is mainly due to the additional costs associated with hiring of senior and middle management to oversee the acquisition, marketing, financial reporting and operations teams. Our staff has been rationalized during the quarter ended July 31, 2010 and staffing levels have remained constant at 49 full-time employees as at October 31, 2010. The Company does not expect to increase its number of employees significantly during 2011, except for certain key people to be brought on as a result of acquisitions and increasing the number of marketing teams we have in current and new regions brought on through acquisitions. Installations are now contracted out to an independent contractor. The Company continues to upgrade its employees as better trained personnel become available through acquisitions.

~~The~~Depreciation ~~principal~~and ~~portion~~amortization for 2010 increased by $145,000 to $316,000 (2009 - $170,000). This increase was attributed to an increase in amortization of ~~capital~~customers’ ~~lease~~relationships ~~obligations~~of is$53,000 to be$122,000 ~~repaid~~(2009 as- ~~follows:~~$69,000) and an increase in depreciation of our network system, automobiles, software and office equipment of $92,000 to $193,000 (2009 - $101,000).

Twelve Months Ended April 30,	$
2011	94,313
2012	28,939
2013	13,747

Other Income and Expense

14Interest expense for 2010 increased by $40,000 to $118,000 (2009 - $78,000). ~~Restatement~~ The increase was a result of ~~Prior~~increased ~~Periods~~short-term ~~due~~and long-term debt levels. Interest expense will increase in 2010 as the Company plans to ~~Correction~~finance a portion of its growth through the issuance of debt instruments. The Company will also issue short-term and long-term notes as part consideration of planned acquisitions.

~~The~~Financing ~~Company~~expenses ~~has~~are ~~restated~~costs ~~previously~~associated ~~issued~~with ~~financial~~consultants ~~statements~~hired ~~pursuant~~ to ~~two~~secure additional ~~error~~debt ~~corrections.~~and/or ~~Pursuant~~equity tofinancing ~~SFAS~~for Nothe Company. ~~154,~~Once ~~"Accounting~~equity ~~Changes~~financing is ~~and~~secured ~~Error~~the ~~Corrections",~~related ~~previously~~cost ~~issued~~will ~~financial~~reduce ~~statements~~the ~~and~~proceeds ~~comparative~~of ~~financial~~the ~~statements~~equity instrument issued. ~~currently~~Financing ~~are~~expense tofor be2010 ~~restated~~increased ~~for~~by ~~correction~~$11,000 ofto ~~errors.~~$11,000 ~~Cumulative~~(2009 ~~effects~~- of$nil). The ~~errors~~increase ~~are~~was ~~reflected~~a inresult ~~beginning~~of ~~balances~~the ofCompany ~~assets~~hiring ~~and~~financial ~~liabilities~~consultants ~~with~~to assist the ~~offsetting~~Company ~~adjustment reflected~~ in ~~the~~raising ~~beginning deficit balance~~capital.

AnNet error in the recording of a stock subscription in April, 2009 resulted in a net increase to stock subscriptions of $4,594 and an increase to deficit of $4,594 for that period. There is no effect of this error on previously issued statements of operations. The effect of this error on the balance sheet as at July 31, 2009 is as follows:Loss

	Previously Reported $	Error Correction $	Restated $
Balance Sheet:
Common Stock Subscribed	637,000	4,594	641,594
Deficit	7,678,594	4,594	7,683,188

The net loss for 2010 decreased by $244,000 to $400,000 (2009 - $644,000). This decrease in loss was due to the 105% increase in revenues while expenses increased at a lower rate and will continue to increase at an incrementally lower rate, as a percentage of revenue, as we expand through acquisitions and organic growth. To highlight this trend our first quarter earnings before interest, income taxes, depreciation and amortization (“EBITDA”) was positive $40,000 as compared to a negative $17,000 fourth quarter 2010.

~~-14-~~Liquidity and Capital Resources

~~Item~~The 2Company completed its acquisition of Omnicity, Incorporated on February 17, 2009. ~~Management~~Prior to this the Company was a dormant early exploration stage company with no operations. Since then, the Company's acquisition ~~Discussion~~ and ~~Analysis~~transition ofteams ~~Financial~~have ~~Condition~~acquired and ~~Results~~folded ofin ~~Operations~~ten WISP's increasing its subscriber base from 1,800 to 11,500 as at October 31, 2010. See discussion under “Revenues” above for our increase in cash flow from our customers.

FORWARD LOOKING STATEMENTS

	October 31, 2010		July 31, 2010
	$		$

Cash	1,000		39,000
Working Capital (Deficiency)	(4,123,000	)	(3,810,000	)
Total Assets	5,752,000		5,851,000
Total Liabilities	7,366,000		7,095,000
Stockholders’ Deficit	(1,614,000	)	(1,244,000	)

~~This~~Cash ~~report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed~~ to beOperating forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this report under "Risk Factors". These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this report. Forward-looking statements in this report include, among others, statements regarding:Activities

~~our~~During ~~capital~~2010, ~~needs~~operating activities generated cash of $137,000 (2009 – used cash of $288,000). Our loss for 2010 was $400,000 (2009 - $644,000), which included: a non-cash outlay for interest expense accreted of $27,000 (2009 - $nil); expenses settled with equity or debt $43,000 (2009 - $nil); depreciation and amortization of $316,000 (2009 - $170,000); for a net cash outflow of $15,000 (2009 - $474,000) before changes in working capital items. Our accounts receivable have increased by $10,000 (2009 – decreased by $13,000) due to our increase in customer base in Indiana during 2009 and Indiana and Ohio during 2010. Prepaid expenses decreased by $9,000 (2009 – $109,000). Our accounts payable and accrued liabilities have increased by $153,000 (2009 - $64,000) due to our operations being partially financed by our creditors. We plan to decrease our reliance on creditor support as we secure additional financing.

~~business~~Cash ~~plans;~~to Investing ~~and~~ Activities

~~expectations~~Our business is a capital intensive business. Since inception, the Company has expended funds to lease or otherwise acquire transmission site rights in various locations and markets, to construct the existing network tower infrastructures and house drops to the customers’ premises and to finance initial operating losses. The Company intends to expand the existing systems and launch additional wireless systems and will require additional funds. The Company estimates that a launch by it of a wireless internet provider system in a typical new tower location will involve the expenditures for wireless internet system transmission equipment and incremental installation costs per subscriber for customer premise equipment. As a result of these costs, operating losses are likely to be incurred by a system during the roll-out period.

~~While~~During ~~these forward-looking statements~~2010, ~~and~~investing ~~any~~activities ~~assumptions~~used ~~upon~~net ~~which~~cash ~~they~~of ~~are based~~$254,000 (2009 ~~are~~- ~~made~~$126,000). inWe ~~good~~acquired ~~faith~~tower and ~~reflect~~customers’ ~~our~~premises ~~current~~equipment ~~judgment~~totalling $223,000 ~~regarding~~(2009 ~~future~~- ~~events~~$122,000). ~~our~~We ~~actual~~increased ~~results~~our ~~will~~cost ~~likely~~of ~~vary,~~customers’ ~~sometimes~~relationships by ~~materially~~$31,000 ~~from~~(2009 ~~any~~- ~~estimates, predictions, projections, assumptions or other future performance suggested herein~~$nil). ~~Some of the risks and assumptions include:~~

~~our~~Cash ~~need~~from Financing ~~for additional financing;~~Activities

~~our~~During ~~limited~~2010, financing ~~operating~~activities ~~history;~~provided cash of $78,000 (2009 - $1,015,000). Proceeds of nil (2009 - $1,020,000) was received from common stock subscriptions. During 2010, proceeds of $165,000 (2009 - $149,000) were received from short-term loans and $nil (2009 - $37,000) from long-term debt. We repaid $87,000 (2009 - $191,000) of short-term debt, long-term debt and capital lease obligations.

~~our~~Item ~~history~~3. ofQuantitative ~~operating~~and ~~losses;~~Qualitative Disclosures About Market Risk.

~~the~~ Not ~~competitive~~required because ~~environment~~we inare ~~which~~a wesmaller ~~operate;~~reporting company.

~~changes~~Item in4. ~~governmental~~Controls ~~regulation~~ and ~~administrative practices;~~Procedures.

Greg Jarman our ~~dependence~~principal executive officer and Don Prest, our principal financial officer, have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report, based on ~~key~~their ~~personnel;~~evaluation of these controls and procedures required by paragraph (b) of Rules 13a-15 and 15d-15, due to the deficiencies in our internal control over financial reporting as described below.

~~conflicts~~Our ofmanagement ~~interest~~is ofresponsible ~~our~~for establishing ~~directors~~ and ~~officers;~~maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act.

The management of the Company assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on this assessment, management determined that, during the quarter ended October 31, 2010, our ~~ability~~internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules, as more fully ~~implement~~described ~~our~~below. This ~~business~~was ~~plan;~~due to deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls and that may be considered to be material weaknesses.

~~our~~Management identified ~~ability~~the tofollowing ~~effectively~~material ~~manage~~weaknesses ~~our~~in ~~growth;~~internal ~~and~~control over financial reporting:

~~other~~1. The ~~regulatory,~~Company ~~legislative~~has ~~and~~limited ~~judicial~~segregation ~~developments~~of duties which is not consistent with good internal control procedures.

We2. The ~~advise~~Company ~~the~~does ~~reader~~not ~~that~~have ~~these~~a ~~cautionary~~written ~~remarks~~internal ~~expressly~~control ~~qualify~~procedurals inmanual ~~their~~which ~~entirety~~outlines ~~all~~the ~~forward-looking~~duties ~~statements~~and ~~attributable~~reporting torequirements usof orthe ~~persons~~Directors ~~acting~~and onany ~~our~~staff ~~behalf~~to be hired in the future. ~~Important~~ This ~~factors~~lack ~~that~~of ~~you~~a ~~should~~written ~~also~~internal ~~consider,~~control ~~include,~~procedurals ~~but~~manual ~~are~~does not ~~limited~~meet ~~to,~~ the ~~factors~~requirements ~~discussed~~of ~~under~~the ~~"Risk~~SEC ~~Factors"~~or ingood ~~this~~internal ~~report~~controls.

~~The~~Management ~~forward-looking~~believes ~~statements~~that inthe material ~~this~~weaknesses ~~report~~set ~~are~~forth ~~made~~in asitems of1 ~~the date of this report~~ and we2 doabove did not ~~intend~~have oran ~~undertake~~affect ~~to update any of~~ on the ~~forward-looking~~Company’s ~~statements~~financial ~~to conform these statements to actual~~ results~~, except as required by applicable law, including the securities laws of the United States~~.

The Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so.

~~REFERENCES~~Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

AsChanges ~~used~~ in ~~this~~Internal quarterly report: (i) the terms "we", "us", "our", "Omnicity" and the "Company" mean Omnicity Corp.; (ii) "SEC" refers to the Securities and Exchange Commission; (iii) "Securities Act" refers to the United StatesControl ~~Securities~~over ~~Act~~Financial ~~of 1933, as amended; (iv) "Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.~~Reporting

~~Plan~~There ofwere ~~Operations~~no changes to our internal control over financial reporting that occurred during the quarter ended October 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Our~~PART ~~business~~II ~~plan~~- OTHER is to be a rural wireless internet service provider in the United States through a consolidation strategy and organic growth of all acquired business units and to partner with REMCs, Telcos and local governments for nationwide marketing. We also plan to partner with regional and national telecommunication companies for the delivery of voice services and complete negotiations and logistics of DirecTV resell agreements. We further plan to partner with local governments to provide essential services, including mobile internet for emergency mobile communications, fire and police and to establish new utility applications such as automated meter reading. We plan to bring WISP based services to rural America through three distinct market channels: (1) REMC partnerships, (2) strategic acquisitions, (3) local government and private enterprise partnerships.INFORMATION

~~-15-~~Item 1. Legal Proceedings.

~~Utilizing~~The ~~our~~Company ~~relationship~~has ~~with~~been ~~the~~served ~~REMCs~~with ~~and~~a Complaints ~~"value~~filed ~~added"~~with ~~institutional~~the ~~services~~Rush ~~and~~Circuit ~~facilities~~Court wein ~~provide~~the ~~for~~State ~~municipalities~~of ~~and~~Indiana ~~local~~dated August ~~governments~~25, we2010. ~~plan~~The toplaintiff ~~organize~~has ~~and~~made ~~consolidate~~claims ~~within~~against the ~~rural~~Company ~~broadband~~for ~~market~~failure to ~~initially~~make inrequired ~~Indiana~~instalment ~~and~~payments ~~then~~that inwere ~~the~~due ~~Midwestern~~pursuant ~~United~~to ~~States and ultimately nationwide~~promissory notes. ~~Collaborations~~The ~~with~~Company ~~both~~has ~~the~~recorded ~~REMCs~~all ~~and~~debt ~~municipalities~~relating ~~may~~to ~~act~~this claim as ~~effective~~a ~~barriers~~current liability. ~~for~~On ~~competition~~September ~~and~~14, ~~provide~~2010 ~~additional~~the ~~sources~~Company offiled ~~revenue~~an ~~and~~Appearance ~~customer service for the REMCs~~ and ~~municipalities~~Notice asof Extension ~~well~~of asTime ~~income~~to ~~and~~answer ~~cash~~the ~~flow for our company~~Complaint. ~~The~~On ~~bundling~~November of8, ~~broadband~~2010 ~~services,~~the ~~including~~Company filed ~~internet,~~an ~~voice,~~Answer ~~and~~to ~~video,~~this inComplaint. ~~partnership~~This ~~with~~Answer ~~rural~~denied ~~electric~~certain ~~and/or~~allegations ~~municipal~~due to ~~services~~breach ~~provides~~by anthe ~~opportunity~~vendor toof ~~imbed,~~the ~~cross~~Asset ~~promote,~~Purchase ~~and~~Agreement ~~extend~~entered ~~services~~into. inThe Company ~~collaboration~~expects ~~with~~to ~~these~~receive ~~institutional~~a ~~providers~~favourable outcome.

~~Our~~The ~~plan~~Company has been served with a Complaint filed with the Rush Circuit Court in the State of ~~operations~~Indiana dated September 1, 2010. The plaintiff has made claims against the Company for failure to make required instalment payments that were due pursuant to promissory notes. The Company has recorded all debt relating to this claim as a current liability. On September 14, 2010 the ~~next~~Company ~~twelve~~filed ~~months~~an Appearance and Notice of Extension of Time to answer the Complaints. The Company is in the process of filing an Answer to: this Complaint which will include a denial of certain allegations due to breach by the vendor of the Asset Purchase Agreement and expects to receive a favourable outcome.

~~develop~~The ~~and~~Company ~~expand~~has been served with a Complaint filed with the Holmes County Court in the State of Ohio dated September 16, ~~through~~2010. The ~~organic~~plaintiff ~~growth~~has made claims against the Company for failure to make required instalment payments that were due pursuant to promissory notes. The Company has recorded all debt relating to this claim as a current liability. On November 8, 2010 the ~~subscriber~~Company ~~base~~filed ~~through~~an ~~our~~Answer ~~sales~~and Counterclaim with the Holmes County Court. This Answer and ~~marketing~~Counterclaim includes ~~program~~counterclaims for various damages, including punitive damages, suffered by the Company and toalso ~~increase~~seeks ~~our~~an ~~number~~injunction. ofThe ~~marketing~~Company ~~teams;~~expects to receive a favourable outcome.

~~acquire,~~Item ~~and~~1A. ~~transition~~Risk into our operations assets of competing WISP operators and expand our network in Indiana and Ohio and connecting these two network clusters by July 31, 2010 and continue expansion into all of Midwest USA by identifying strategic regional acquisitions;Factors.

~~Launch~~ Not ~~the~~required ~~next~~because ~~generation~~we ofare ~~Motorola~~a smaller ~~Canopy~~reporting ~~equipment in all new builds and in all rebuild opportunities to standardize Omnicity networks with carrier grade deployments;~~ company.

~~increase~~Item ~~operational~~2. ~~cash~~Unregistered ~~flow~~Sales ~~to over $100,000 per month and build a liquidity floor under operations~~ of ~~$200,000~~Equity ~~minimum by October 31, 2010;~~ Securities.

~~continue~~On toAugust ~~partner~~16 ~~with~~and ~~Rural~~October ~~Electric~~31, 2010 ~~Membership~~we ~~Cooperatives~~issued ~~"REMCs"~~an aggregate of 299,996 ~~local~~common ~~and~~shares ~~State~~to ~~governments,~~three ~~Rural~~individuals ~~Telcos~~pursuant to ~~and~~an ~~Original~~Agreement ~~Equipment~~for ~~Manufacturers~~services ~~"OEMs"~~rendered. We torelied ~~efficiently~~on ~~and~~exemptions ~~cost~~from registration ~~effectively~~under ~~expand~~the ~~our~~Securities ~~network~~Act ~~across~~provided ~~rural~~by ~~America;~~Rule ~~and~~506 for U.S. accredited investors.

~~develop~~Item ~~and~~3. ~~expand~~Defaults ~~our~~Upon ~~service~~Senior ~~offerings to become a total broadband solution including VOIP and IPTV.~~Securities

~~Future~~ Not ~~Financing~~required ~~Requirements~~because we are a smaller reporting company.

AtItem ~~April 30, 2010, we had cash of $53,000 and a working capital deficit of $2,718,000~~4. We ~~estimate~~(Removed ~~that approximately $2 million will be required during quarter four ended July 31, 2010 to finance our short-term working capital deficit~~ and ~~to finance the expansion of, and the addition of subscribers through acquisition to, our existing and to be acquired network infrastructures~~Reserved). Approximately $3.87 million has been raised during the nine months ended April 30, 2010. A portion will be used to finance our negative working capital. Upon closing our second large acquisition in Ohio we are operationally cash flow positive and will require no additional funds to finance these operational deficits. A portion of these funds will also be used to finance the acquisition of additional transmission rights, the purchase and installation of transmission and tower equipment and the cost of customer premises equipment. A portion of these funds will be used to make principal and interest payments of our long-term and short-term debts as required.

WeItem will continue to seek a combination of equity and long-term debt financing as well as other traditional cash flow and asset backed financing to meet our financing needs and to reduce our overall cost of capital5. ~~Additionally,~~Other in order to accelerate our growth rate and to finance general corporate activities, we may supplement our existing sources of funds with financing arrangements at the operating system level or through additional borrowings, joint ventures or other off balance sheet arrangementsInformation. As a further capital resource, we may sell or lease certain wireless rights or assets from our portfolio as appropriate opportunities become available. However, there can be no assurance that we will be able to obtain any additional financing, on acceptable terms or at all.

~~Results of Operations~~None.

~~Three~~Item ~~months~~6. ~~ended April 30, 2010 and 2009~~Exhibits

The following ~~table~~exhibits sets forth certain financial information relating to the Company for the three months ended April 30, 2010 ("2010") and April 30, 2009 ("2009"). The financial information presented has been rounded to the nearest thousand $ and is derived from the unaudited interim consolidated financial statements are included ~~under~~with ~~Item~~this 1Quarterly inReport ~~this~~on Form 10-Q.:

-16-

Exhibit Number	Description of Exhibit

31.1	Rule 13a-14(a)/15(d)-14(a) Certification of Principal Executive Officer

31.2	Rule 13a-14(a)/15(d)-14(a) Certification of Principal Financial Officer

32.1	18 U.S.C. Section 1350 Certification of Principal Executive Officer and Principal Financial Officer

	Three Months Ended April 30, 2010 $	Three Months Ended April 30, 2009 $
Sales, net	837,000	425,000
Expenses:
Service costs	16,000	8,000
Plant and signal delivery	364,000	226,000
Marketing and sales	4,000	21,000
General and administration	120,000	226,000
Salaries and benefits	626,000	346,000
Stock based compensation	-	-
Depreciation and amortization	233,000	132,000
Total Expenses	(1,363,000)	(960,000)
Loss from Operations	(526,000)	(535,000)
Other Income (Expense):
Other income	-	-
Gain on sale of assets, net	41,000	-
Financing expense	(131,000)	-
Interest expense	(127,000)	(64,000)
Total Other Income (Expense)	(217,000)	(64,000)
Net Loss	(743,000)	(599,000)
Net Loss per Share - Basic and Diluted	(.02)	(.02)

SIGNATURES

~~The~~In ~~following~~accordance ~~discussion~~with ~~should~~the berequirements ~~read~~of inthe ~~conjunction~~Securities ~~with~~Exchange Act of 1934, the ~~unaudited~~registrant ~~interim~~has ~~consolidated~~duly ~~financial~~caused ~~statements~~this ~~(including~~report ~~the~~to ~~notes~~be ~~thereto)~~signed ~~included~~on ~~under~~its behalf ~~Item~~by 1the inundersigned ~~this~~thereunto ~~Form~~duly ~~10-Q~~authorized.

Revenues

	OMNICITY CORP.
By:	/s/ Greg Jarman Greg Jarman Chief Executive Officer and a Director (Principal Executive Officer) Date: December 15, 2010

	/s/ Don Prest Don Prest Chief Financial Officer and a Director (Principal Financial Officer and Principal Accounting Officer) Date: December 15, 2010

The Company's revenues for 2010 increased by $412,000 to $837,000 (2009 - $425,000) an increase of 97%. This significant increase reflects an increase in installation revenues for 2010 which increased by $51,000 to $73,000 (2009 - $22,000) and an increase in recurring service revenues for 2010 which increased by $373,000 to $746,000 (2009 - $374,000) an increase of 100%. These significant increases were achieved partially through organic growth, which is increasing at a rapid rate, and mainly through our customers' relationships acquired in asset acquisitions closed between May 1, 2009 and April 30, 2010. The number of subscribers increased from 6,100 to 11,500 during the three months ended April 30, 2010. This subscriber count does not differentiate a subscriber, for example, one school, hospital or business subscriber is counted as one subscriber. On an equivalent subscriber unit basis we increased our equivalent subscribers from 6,605 at January 31, 2010 to 12,350 at April 30, 2010. This is important to note because going forward the Company will be adding schools, hospitals and business accounts at an accelerated rate. During the three months ended April 30, 2009 the Company had 1,800 subscribers. The Company receives revenue mainly from monthly service and modem rental fees collected from its subscribers. The Company's installation revenue, while representing 9% of revenues currently, is expected to increase rapidly as our marketing teams expand. The Company also receives web hosting fees, fiber construction projects fees and late fees which together represent less than 2% of total revenue. The Company expects revenues to increase rapidly as a result of organic growth, planned acquisitions and increase in average revenue per unit ("ARPU").

Operational Expenses

Operational expenses include service costs, plant and signal delivery, marketing and sales, general and administration and salaries and benefits.

Service costs include the cost of billing and collection. During 2010, service costs increased by $8,000 to $16,000 (2009 - $8,000). This increase was due mainly to the increase in the number of customers accounts offset by a decrease in the cost of collection. Service costs have not, and are not expected to increase significantly during the remainder of 2010.

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Plant and signal delivery expenses include the rental of tower infrastructures, the purchase of internet transmission (backhaul) the cost of installations at customers' premises and the customer premises equipment operating lease costs. During 2010, plant and signal delivery expenses increased by $138,000 to $364,000 (2009 - $226,000), an increase of 61%. The increase in revenues was 97% during this period and as subscribers are added to the network the incremental cost of that subscriber is lower. This increase was due mainly to the increase in the number of towers under rental arrangements, the amount of backhaul needed to service the increase in subscribers, the increase in customer premises equipment being leased pursuant to operating lease arrangements and the increase in customer installations. Plant and signal delivery costs per customer will significantly decrease once the Company populates its towers with customers. The Company, on average, has a penetration rate of approximately 4% of homes passed whereas the minimum target penetration is greater than 20% which is the penetration rate in the Wabash REMC coverage area.

In December, 2009, we upgraded our marketing and sales models which increased new installations from 155 during January, 2010 to 220 during February, 2010 to 235 during March, 2010 and 220 during April 2010. Our current growth, on a month over month basis, is 2% which is expected to increase each month.

Marketing and sales expenses include REMC fees, advertising and preparation of marketing materials. During 2010, marketing and sales expenses were $4,000 (2009- $21,000). Marketing and sales expenses are expected to significantly increase during 2010 as the Company increases its marketing plan to significantly increase organic growth. The Company now has five full-time salespeople, which costs are included in salaries and benefits.

General and administration expenses include professional fees (legal, audit, accounting and outside professional consulting), investor relations consulting fees, office expenses (including rent, telephone and insurance), software fees and fees associated with late payments and bank charges. During 2010, general and administration expenses decreased by $106,000 to $120,000 (2009 - $226,000). This decrease is mainly due to high costs associated with becoming a public company during the three months ended April 30, 2009. General and administration expenses have been reduced to a minimum and are not expected to increase significantly in 2010 in relation to increased revenue.

Salaries and benefits for 2010 have increased by $280,000 to $626,000 (2009 - $346,000). This increase is mainly due to the additional costs associated with hiring of senior and middle management to oversee the acquisition, marketing, financial reporting and operations teams. The Company went from 26 employees during the three months ended April 30, 2009 to 68 employees during the three months ended April 30, 2010. The Company does not expect to increase its number of employees significantly during 2010, except for certain key people to be brought on as a result of acquisitions and increasing the number of marketing teams we have in current and new regions brought on through acquisitions. Installations are now contracted out to an independent contractor and the Company's current number of employees is expected to be able to maintain a customer base at least double its current size. The Company continues to upgrade its employees as better trained personnel become available through acquisitions.

Depreciation and amortization for 2010 increased by $101,000 to $233,000 (2009 - $132,000). This increase was attributed to amortization of customers' relationships of $79,000 (2009 - $29). This increase was also due to more property, plant and equipment acquired over the past twelve months.

Other Income and Expense

Interest expense for 2010 increased by $63,000 to $127,000 (2009 - $64,000). The increase was a result of significant increases in short-term and long-term debt levels offset by an overall reduction in the cost of debt to 6.8% achieved through negotiations with all creditors. Interest expense will increase over each of the next few quarters as the Company plans to issue short-term and long-term debt securities.

The Company incurs financing expenses relating to hiring financial experts to assist the Company in raising capital and applying for stimulus funding. Financing expense for 2010 increased by $131,000 to $131,000 (2009 - $nil).

During 2010 the Company sold tower equipment to a related party for proceeds of $225,000 which resulted in a gain of $41,000.

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Net Loss

The net loss for 2010 increased by $144,000 to $743,000 (2009 - $599,000). This increase in loss was due to financing charges of $131,000 and an increase in depreciation and amortization and increases in the number of employees.

Nine months ended April 30, 2010 and 2009

The following table sets forth certain financial information relating to the Company for the nine months ended April 30, 2010 ("2010") and April 30, 2009 ("2009"). The financial information presented has been rounded to the nearest thousand $ and is derived from the unaudited interim consolidated financial statements included under Item 1 in this Form 10-Q.

	Nine months Ended April 30, 2010 $	Nine months Ended April 30, 2009 $
Sales, net	2,090,433	609,000
Expenses:
Service costs	43,307	13,000
Plant and signal delivery	1,019,433	360,000
Marketing and sales	10,670	5,000
General and administration	428,734	281,000
Salaries and benefits	1,451,370	528,000
Stock based compensation	-	290,000
Depreciation and amortization	530,210	208,000
Total Expenses	(3,483,724)	(1,685,000)
Loss from Operations	(1,393,291)	(1,076,000)
Other Income (Expense):
Other income	90,048	17,000
Assets written-off	(0 )	-
Financing expense	(210,481)	-
Interest expense	(169,476)	(69,000)
Total Other Income (Expense)	(289,909)	(52,000)
Net Loss	(1,683,202)	(1,128,000)
Net Loss per Share - Basic and Diluted	(.03)	(.03)

The following discussion should be read in conjunction with the unaudited interim consolidated financial statements (including the notes thereto) included under Item 1 in this Form 10-Q.

Revenues

The Company's revenues for 2010 increased by $1,481,433 to $2,090,433 (2009 - $609,000) an increase of 343%. This significant increase reflects an increase in installation revenues for 2010 which increased by $153,003 to $173,003 (2009 - $20,000) and an increase in recurring service revenues for 2010 which increased by $1,339,686 to $1,928,686 (2009 - $589,000) an increase of 327%. These significant increases were achieved partially through organic growth, which is increasing at a rapid rate, and mainly through our seven additional acquisitions folded in from August 1, 2009 through April 30, 2010. The number of subscribers increased from 5,200 to 11,500 during the nine months ended April 30, 2010. This subscriber count does not differentiate a subscriber, for example, one school, hospital or business subscriber is counted as one subscriber. On an equivalent subscriber unit basis we increased our equivalent subscribers from 5,586 at July 31, 2009 to 12,350 as at April 30, 2010. This is important to note because going forward the Company will be adding schools, hospitals and business accounts at an accelerated rate. During the Nine months ended April 30, 2009 the Company had 1,800 subscribers. The Company receives revenue mainly from monthly service and modem rental fees collected from its subscribers. The Company's installation revenue, while representing 8% of revenues currently, is expected to increase rapidly as our marketing teams expand. The Company also receives web hosting fees, fiber construction projects fees and late fees which

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together represent less than 1% of total revenue. The Company expects revenues to increase rapidly as a result of organic growth, planned acquisitions and increase in average revenue per unit ("ARPU").

Operational Expenses

Operational expenses include service costs, plant and signal delivery, marketing and sales, general and administration and salaries and benefits.

Service costs include the cost of billing and collection. During 2010, service costs increased by $30,307 to $43,307 (2009 - $13,000). This increase was due mainly to the increase in the number of customers accounts offset by a decrease in the cost of collection. Service costs have not, and are not expected to increase significantly during the remainder of 2010.

Plant and signal delivery expenses include the rental of tower infrastructures, the purchase of internet transmission (backhaul) the cost of installations at customers' premises and the customer premises equipment operating lease costs. During 2010 plant and signal delivery expenses increased by $659,433 to $1,019,433 (2009 - $360,000), an increase of 283%. The increase in revenues was 343% during this period and as subscribers are added to the network the incremental cost of that subscriber is lower. This increase was due mainly to the increase in the number of towers under rental arrangements, the amount of backhaul needed to service the increase in subscribers, the increase in customer premises equipment being leased pursuant to operating lease arrangements and the increase in customer installations. Plant and signal delivery costs per customer will significantly decrease once the Company populates its towers with customers. The Company, on average, has a penetration of approximately 4% of homes passed whereas the minimum target penetration is greater than 20% which is the penetration rate in the Wabash REMC coverage area.

In December, 2009, we upgraded our marketing and sales models which increased new installations from 50 during December, 2009 to 155 during January, 2010 and 220 during February, 2010. Our current growth, on a month over month basis, is 35% which is expected to increase each month.

Marketing and sales expenses include REMC fees, advertising and preparation of marketing materials. During 2010, marketing and sales expenses were $10,670 (2009- $5,000). Marketing and sales expenses are expected to significantly increase during 2010 as the Company increases its marketing plan to significantly increase organic growth. The Company now has five full-time sales people, which costs are included in salaries and benefits.

General and administration expenses include professional fees (legal, audit, accounting and outside professional consulting), investor relations consulting fees, office expenses (including rent, telephone and insurance), software fees and fees associated with late payments and bank charges. During 2010, general and administration expenses increased by $147,734 to $428,734 (2009 - $281,000). This increase is mainly due to being a public company during 2010 versus a private company during 2009. There are significant additional costs associated with being a public company including legal costs, auditing, investor relations and regulatory fees. General and administration expenses are not expected to increase significantly in 2010 in relation to increased revenue.

Salaries and benefits for 2010 have increased by $923,370 to $1,451,370 (2009 - $528,000). This increase is mainly due to the additional costs associated with hiring of senior and middle management to oversee the acquisition, marketing, financial reporting and operations teams. The Company went from 25 employees during the nine months ended April 30, 2009 to 68 employees during the nine months ended April 30, 2010. The Company does not expect to increase its number of employees significantly during 2010, except for certain key people to be brought on as a result of acquisitions and increasing the number of marketing teams we have in current and new regions brought on through acquisitions. Installations are now contracted out to an independent contractor and the Company's current number of employees is expected to be able to maintain a customer base at least double its current size. The Company continues to upgrade its employees as better trained personnel become available through acquisitions. Stock based compensation of $290,000 was charged to operations on January 2, 2009 with no corresponding charge during 2010.

Depreciation and amortization for 2010 increased by $322,210 to $530,210 (2009 - $208,000). This increase was attributed to amortization of customers' relationships of $219,069 (2009 - $nil). This increase was offset by a decrease of $30,000 in depreciation of our property and equipment due to assets being fully depreciated.

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Other Income and Expense

Interest expense for 2010 increased by $100,476 to $169,476 (2009 - $69,000). The increase was a result of increased short-term and long-term debt levels offset by an overall reduction in the cost of debt to 6.8% achieved through negotiations with all creditors. During the nine months ended April 30, 2010 the Company's cost of short-term and long-term debt decreased by 2% to 6.8% from 8.8%. Interest expense will increase in 2010 as the Company plans to issue senior subordinated convertible debt securities at 6% and bonds at 4% to 5%. The Company will also issue short-term notes as part consideration of planned acquisitions.

During 2010 the Company had written-off a $10,000 non-refundable deposit on a 2008 planned acquisition that did not complete. Other income included accounts payable written-off of $45,000 (2009 - $17,000).

Net Loss

The net loss for 2010 increased by $555,202 to $1,683,202 (2009 - $1,128,000). This increase in loss was due to increases in operational expenses (other than stock based compensation) of $1,798,724. These operational expense increases were mainly due to variable items such as increase in plant and delivery of $659,433 and an increase in salaries and benefits of $923,370. General and administration increased by $147,734 as a result of being a public company and depreciation and amortization increased by $322,210 due to amortization of customers' relationships. These increases to net loss were offset by a $1,481,433 increase in revenues and a one-time stock based compensation expense in 2009 of $290,000 which was not incurred during 2010.

Liquidity and Capital Resources

The Company completed its acquisition of Omnicity, Incorporated on February 17, 2009. Prior to this the Company was a dormant early exploration stage company with no operations. Since then, the Company's acquisition and transition teams have acquired and folded in ten WISP's increasing its subscriber base from 1,800 to 11,500 as at April 30, 2010. See discussion under "Revenues" above for our increase in cash flow from our customers.

	April 30, 2010 $	July 31, 2009 $
Cash	53,000	159,000
Working Capital (Deficiency)	(2,718,000)	(2,585,000)
Total Assets	6,737,000	3,350,000
Total Liabilities	6,415,000	4,424,000
Stockholders' Deficit	(677,000)	(1,074,000)

Cash to Operating Activities

During the nine months ended 2010, operating activities used cash of $1,178,000 (2009 - $774,000). Our loss for 2010 was $2,020,000 (2009 - $1,728,000), which included a non-cash outlay for interest expense accreted of $35,000, a financing charge of $5,000, an asset written-off of $10,000, a gain on sale of tower equipment of $31,000 and depreciation and amortization of $551,000 (2009 - $341,000) and, during 2009, a non-cash stock based compensation expense of $290,000 for a net cash outflow of $1,460,000 (2009 - $1,097,000) before changes in working capital items. Our accounts receivable have increased by $23,000 due to our increase in customer base. Prepaid expenses decreased by $83,000 (2009 - increase of $7,000). Our accounts payable and accrued liabilities have increased slightly by $166,000 as compared to 2009 where our operations were partially financed by our creditors totalling $333,000.

Cash to Investing Activities

The WISP business is a capital intensive business. Since inception, the Company has expended funds to lease or otherwise acquire transmission site rights in various locations and markets, to construct the existing systems and to finance initial operating losses. The Company intends to expand the existing systems and launch additional wireless systems and will require additional funds. The Company estimates that a launch by it of a wireless internet provider system in a typical new tower location will involve the expenditures for wireless internet system transmission equipment and incremental installation costs per subscriber for customer premise equipment. As a result of these costs, operating losses are likely to be incurred by a system during the roll-out period.

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During 2010, investing activities used net cash of $1,901,000 (2009 - $149,000). We acquired, through asset purchase agreements and equipment purchases, tower and customers' premises equipment totalling $1,420,000, net of sale leaseback proceeds of $225,000 (2009 - $195,000, net of sale leaseback proceeds of $489,000). We acquired customers' relationships, through asset purchase agreements, totalling $1,435,000; cash consideration was $419,000 and non-cash consideration was 1,022,000.

Cash from Financing Activities

During 2010, financing activities provided cash of $2,973,000 (2009 - $993,000). Proceeds of $1,120,000 was received from common stock subscriptions (2009 - $577,000). During 2010, proceeds of $1,017,000 (2009 - $370,000) were received from short-term loans and $1,510,000 (2009 - $145,000) from long-term debt. A total of $961,000 of short-term debt became long-term debt due to renegotiations with note holders. We repaid $674,000 (2009 - $85,000) of short-term debt, long-term debt and capital lease obligations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required because we are a smaller reporting company.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report, being April 30, 2010. This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer. Based upon that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures are effective as at the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director and officer or affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors.

Not required because we are a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities.

On March 31, 2010 we issued 5,000 common shares to one individual to complete the purchase of a vehicle pursuant to a Bill of Sale dated November 19, 2009. We relied on an exemption from registration under the Securities Act provided by Section 4(2) thereof.

Also on March 31, 2010 we issued 5,714 common shares to one individual complete a Letter Agreement to settle a claim. We relied on exemptions from registration under the Securities Act provided by Rule 506 for U.S. accredited investors.

On April 9, 2010 we issued 8,571 common shares to one individual to complete a Letter Agreement to settle a claim. We relied on exemptions from registration under the Securities Act provided by Rule 506 for U.S. accredited investors.

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On April 26, 2010 we issued an aggregate of 235,000 common shares to two entities pursuant to Agreements for services to be rendered. With respect to 165,000 of these shares, we relied on exemptions from registration under the Securities Act provided by Rule 506 for U.S. accredited investors; with respect to the remaining 70,000 shares, we relied on exemptions from registration under the Securities Act provided by Regulation S.

On April 29, 2010, we completed a non-brokered private placement pursuant to which we issued from treasury to two subscribers a total of 228,571 Units at a subscription price of $0.35 per unit to settle debt of $80,000. Each unit consisted of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire an additional share of common stock at an exercise price of $0.50 per share until April 29, 2012. We relied on exemptions from registration under the Securities Act provided by Rule 506 for U.S. accredited investors based on representations and warranties provided by the subscribers in the subscription agreements entered into between each subscriber and the Company.

Item 3. Defaults Upon Senior Securities

Not required because we are a smaller reporting company.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits

The following exhibits are included with this Quarterly Report on Form 10-Q:

Exhibit Number	Description of Exhibit
10.1	Promissory Note between Company as Borrower and Richard Reahard as Lender, dated March 26, 2010
10.2	Promissory Note between Company as Borrower and Richard Reahard as Lender, dated April 1, 2010
10.3	Promissory Note between Company as Borrower and Richard Reahard as Lender, dated April 16, 2010
10.4	Promissory Note between Company as Borrower and Richard Beltzhoover as Lender
10.5	Lease Agreement between Company as Lessee and Linda Beltzhoover as Lessor
10.6	Promissory Note between Company as Borrower and Insulreps Profit Sharing Plan as Lender
10.7	Investor Relations Services Agreement between Company and VUI Financial, LLC, as amended
10.8	Bill of Sale between Company as Seller and River Point Financial, LLC as Purchaser
10.9	Lease for Tower Space between Company as Lessee and River Point Financial, LLC as Lessor
31.1	Rule 13a-14(a)/15(d)-14(a) Certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15(d)-14(a) Certification of Principal Financial Officer
32.1	18 U.S.C. Section 1350 Certification of Principal Executive Officer and Principal Financial Officer

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OMNICITY CORP.
By:	"Greg Jarman" Greg Jarman Chief Executive Officer and a Director (Principal Executive Officer) Date: June 14, 2010
	"Don Prest" Don Prest Chief Financial Officer and a Director (Principal Financial Officer and Principal Accounting Officer) Date: June 14, 2010

__________

October 31, 2010 $

July 31, 2010 $

Operating lease deposits

Other long-term deposits

Filing Compare · OMNICITY CORP.