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<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>UNITED STATES</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>Washington, DC &nbsp;20549</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>FORM 8K</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>Pursuant to Section 13 OR 15 (d) of the Securities Exchange Act of 1934</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>Date of Report (Date of earliest event reported) <B>November 14, 2005</B></P>
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<P style="margin-top:0pt; margin-bottom:3pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unity Wireless Corporation</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(Exact name of registrant as specified in its charter)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>Delaware</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(State or other jurisdiction of incorporation)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>0-30620</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>Commission File Number)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>91-1940650</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(IRS Employer Identification No.)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>7438 Fraser Park Drive, Burnaby, BC Canada &nbsp;V5J 5B9</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(Address of principal executive offices and Zip Code)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>(800) 337-6642</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(Registrant&#146;s telephone number, including area code)</P>
<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>not applicable</B></P>
<P style="margin-top:0pt; margin-bottom:2pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>(Former name or former address, if changed since last report)</P>
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<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt"><BR></P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<I>see </I>General Instruction A.2. below):</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-15pt; text-indent:18pt; line-height:15pt; font-family:Times New Roman; font-size:8pt" align=justify><FONT FACE="Wingdings">o</FONT></P>
<P style="margin:0pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-15pt; text-indent:18pt; line-height:15pt; font-family:Times New Roman; font-size:8pt" align=justify><FONT FACE="Wingdings">o</FONT></P>
<P style="margin:0pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-15pt; text-indent:18pt; line-height:15pt; font-family:Times New Roman; font-size:8pt" align=justify><FONT FACE="Wingdings">o</FONT></P>
<P style="margin:0pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-15pt; text-indent:18pt; line-height:15pt; font-family:Times New Roman; font-size:8pt" align=justify><FONT FACE="Wingdings">o</FONT></P>
<P style="margin:0pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:8pt" align=justify>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>
<P style="margin-top:4pt; margin-bottom:4pt; font-family:Times New Roman; font-size:8pt"><BR></P>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Item 2.02 Results of Operations and Financial Condition</B></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">On November 14, 2005 the Registrant issued a press release announcing financial results for the third quarter ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this report. </P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be &#147;filed&#148; for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Item 9.01</B></P>
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<P style="margin-top:0pt; margin-bottom:-13pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(A)</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Exhibits</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-13pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">99.1 </P>
<P style="margin-top:0pt; margin-bottom:2pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Press release of Unity Wireless Corporation dated November 14, 2005.</P>
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<P style="margin-top:0pt; margin-bottom:2pt; font-family:Times New Roman; font-size:8pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>SIGNATURES</B></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Pursuant to 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 hereunto duly authorized.</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">UNITY WIRELESS CORPORATION</P>
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<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><U>By: </U><I><U>/s/ Ilan Kenig</U></I></P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">ILAN KENIG</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Chief Executive Officer and Principal Executive Officer</P>
<P style="margin-top:0pt; margin-bottom:2.75pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Date: November 14, 2005</P>
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<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>INDEX TO EXHIBITS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
<TABLE cellspacing=0><TR><TD style="border-bottom:1pt solid #000000" valign=top width=83.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Exhibit No.</B></P>
</TD><TD valign=top width=51.6><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center>&nbsp;</P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=565.267><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>Description</B></P>
</TD></TR>
<TR><TD valign=top width=83.933><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD valign=top width=51.6><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD valign=top width=565.267><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=83.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">99.1</P>
</TD><TD valign=top width=51.6><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD valign=top width=565.267><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Press release of Unity Wireless Corporation, dated November 14, 2005.</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;<BIG><BIG>Unity Wireless</BIG></BIG></P>
<P style="margin:0pt; font-family:Times New Roman"><B><I>Technology &amp; Innovation to Power a Wireless World!</I></B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">FOR IMMEDIATE RELEASE</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unity Wireless Reports Results for the Third Quarter 2005</B></P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Gross Margins Reach 21% for Third Quarter; Revenue up 20% for 9-Month Period</B></P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>November 14, 2005 - BURNABY, BC &#150; Unity Wireless Corporation (OTCBB: UTYW), a developer of integrated wireless subsystems, power amplifiers and coverage enhancement solutions, reported today summary financial results for the three and nine-month periods ended September 30, 2005. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Revenue for the third quarter ended September 30, 2005 was $949,700 compared to $1,027,160 in the same period in 2004. The gross margin of $201,865, or 21.26%, for the third quarter of 2005 declined from a gross margin of $223,590, or 21.76%, for the third quarter of 2004. &nbsp;Loss for the third quarter of 2005 was $1,017,538 compared to $605,447 for the same period in 2004. &nbsp;Net of stock based compensation and other non-cash expenses of $390,805 in the 2005 period and $165,099 in the 2004 period, loss for the third quarter of 2005 was $626,733 compared to $440,348 for the same period in 2004. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Revenue for the nine-month period ended September 30, 2005 was $4,634,158, up 20.34%, compared to $3,850,740 in the same period in 2004. The gross margin of $1,039,614, or 22.43% of net sales, for the nine month period ended of 2005 increased from a gross margin of $719,854, or 18.69% of net sales, for the nine month period ended of 2004. &nbsp;Loss for the nine-month period was $3,561,117 compared to $2,026,172 for the same period in 2004. Net of stock based compensation and other non-cash expenses of $1,562,590 in the 2005 period and $706,322 in the 2004 period, loss for the nine-month period was $1,998,527 compared to $1,319,850 for the same period in 2004. &nbsp;</P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Ilan Kenig, President and CEO of Unity Wireless, stated, &#147;Revenues were lower than anticipated because certain expected orders were postponed. We did, however, increase the scope of our potential growth as we diversified both our product portfolio and customer base. Several products are now qualified for multiple base station configurations with multiple OEM customers and are ready for ramp-up when we receive production orders. &nbsp;Our Operator Solutions Group has several evaluation and field trials underway in North America for our tower mounted amplifier (TMA) products, and the Group is also developing new coverage solutions for specific customer opportunities in North America and Europe. We feel that penetrating the operator market segment with these products in a meaningful way can be accomplished more quickly than it has taken to penetrate the OEM market.&#148; </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>The Company&#146;s Form 10Q-SB for the period ended September 30, 2005 contains additional financial information, and can be accessed at the Company&#146;s website or through the Securities and Exchange Commissions website at www.sec.gov. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><B>About Unity Wireless</B> www.unitywireless.com</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Unity Wireless is an ISO 9001:2000 certified developer of RF (radio frequency) power amplifiers, components, integrated front-ends and coverage enhancement solutions for wireless communications networks. &nbsp;Our products are an integral part of the base station and repeater infrastructure that comprise the backbone of wireless communications networks around the world. &nbsp;From analog cellular to 3G mobile and fixed wireless applications from 450 MHz to 3.5 GHz, Unity Wireless products deliver enhanced efficiency and performance with field-proven quality and reliability in tens of thousands of base stations and repeaters around the world. </P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><B>Forward Looking Statements </B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. &nbsp;The words &quot;believe,&quot; &quot;expect,&quot; &#147;feel,&#148; &quot;plan,&quot; &quot;anticipate,&quot; &#147;should&#148; and other similar expressions generally identify forward-looking statements. &nbsp;Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. &nbsp;These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, inability to raise the funds necessary for the Company&#146;s continued operations, changes in external market factors including the economy and other risks and uncertainties indicated in the Company's most recent SEC filing on form SB-2. &nbsp;Actual results could differ materially from the results referred to in the forward-looking statements.</P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><B>Non-GAAP Financial Information</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>This press release contains certain non-GAAP financial information as defined by the U.S. Securities Commission Regulation G. &nbsp;Pursuant to the requirements of this regulation, a reconciliation of this financial information to our financial statements as prepared under generally accepted accounting principles in the United States (GAAP) is included in this press release. &nbsp;Unity&#146;s management believes that the disclosure of this non-GAAP financial information is useful to our investors and the investment community since certain non-cash charges and expenses may not be reflective of future expenses.</P>
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<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>For More Information Contact:</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Dallas Pretty, Unity Wireless, (604) 267-2736 &nbsp;&nbsp;dallasp@unitywireless.com &nbsp;</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify>Mike Mulshine, Osprey Partners, (732) 292-0982 &nbsp;&nbsp;osprey57@optonline.net</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>UNITY WIRELESS CORPORATION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>CONSOLIDATED STATEMENT OF OPERATIONS</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>RECONCILIATION OF PRO FORMA RESULTS</B></P>
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<TABLE cellspacing=0><TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=224.133><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=340.733 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>Three months ended</B></P>
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<TR><TD valign=bottom width=224.133><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=340.733 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>September 30, 2005</P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Original</P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Adjustment</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Pro-Forma</P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Net sales </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;949,700 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;949,700 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Cost of goods sold </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;747,835 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(6,165) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;741,670 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;201,865 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;6,165 </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;208,030 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Expenses: </P>
</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Research and development </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;393,744 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(9,001) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;384,743 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Government grant </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;14,245 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;14,245 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Sales and marketing </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;134,573 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(9,091) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;125,482 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Depreciation and amortization </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;79,546 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(79,546) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( b )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Exchange (gain) loss </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(6,909) </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(6,909) </P>
</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Interest expense, excluding accretion of interest and debt settlement </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;72,838 </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(57,632) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( c )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;15,206 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;General and administrative </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;415,389 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(113,393) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;301,996 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=224.133><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,103,426 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(268,663) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;834,763 </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Operating loss for the period </P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(901,561) </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;274,828 </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(626,733) </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Accretion of interest and debt settlement &nbsp;</P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(115,977) </P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;115,977 </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( d )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Other income </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=224.133><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Loss for the period</P>
</TD><TD valign=bottom width=112.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($1,017,538)</P>
</TD><TD valign=bottom width=96.4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>$390,805</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($626,733)</P>
</TD></TR>
<TR><TD valign=bottom width=224.133>&nbsp;</TD><TD valign=bottom width=112.467>&nbsp;</TD><TD valign=bottom width=96.4>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=433 colspan=3><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( a ) - This represents stock-based compensation.</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( b ) - This represents costs related to the amortization of equipment and intangible assets.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( c ) - This represents shares issued in settlement of interest expense.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( d ) - This represents accretion of interest and debt settlement related to convertible debentures.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<TABLE cellspacing=0><TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=229.333><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=335.533 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>Three months ended</B></P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=335.533 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>September 30, 2004</P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Original</P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Adjustment</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Pro-Forma</P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Net sales </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ 1,027,160 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$1,027,160 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Cost of goods sold </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;803,570 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(5,608) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;797,962 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;223,590 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;5,608 </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;229,198 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Expenses: </P>
</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Research and development </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;243,524 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(8,043) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;235,481 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Government grant </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;15,407 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;15,407 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Sales and marketing </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;96,207 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;8,638 </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;104,845 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Depreciation and amortization </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;15,812 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(15,812) </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( b )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Exchange (gain) loss </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;69,628 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;69,628 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Interest expense, excluding accretion of interest and debt settlement </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;26,843 </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( c )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;26,843 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;General and administrative </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;341,651 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(124,192) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;217,459 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=229.333><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;809,072 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(139,409) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;669,663 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Operating loss for the period </P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(585,482) </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;145,017 </P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(440,465) </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Accretion of interest and debt settlement &nbsp;</P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(20,082) </P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;20,082 </P>
</TD><TD valign=bottom width=36><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( d )</P>
</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Other income </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;117 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=36><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center>&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;117 </P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=229.333><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Loss for the period</P>
</TD><TD valign=bottom width=106.467><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($605,447)</P>
</TD><TD valign=bottom width=97.2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>$165,099</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($440,348)</P>
</TD></TR>
<TR><TD valign=bottom width=229.333>&nbsp;</TD><TD valign=bottom width=106.467>&nbsp;</TD><TD valign=bottom width=97.2>&nbsp;</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=433 colspan=3><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( a ) - This represents stock-based compensation.</P>
</TD><TD valign=bottom width=36>&nbsp;</TD><TD valign=bottom width=95.867>&nbsp;</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( b ) - This represents costs related to the amortization of equipment and intangible assets.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( c ) - This represents shares issued in settlement of interest expense.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( d ) - This represents accretion of interest and debt settlement related to convertible debentures.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>UNITY WIRELESS CORPORATION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>CONSOLIDATED STATEMENT OF OPERATIONS</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>RECONCILIATION OF PRO FORMA RESULTS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<TABLE cellspacing=0><TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=345.933 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=345.933 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>September 30, 2005</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Original</P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Adjustment</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Pro-Forma</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Net sales </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ 4,634,158 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$4,634,158 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Cost of goods sold </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,594,544 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(18,153) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,576,391 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,039,614 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;18,153 </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,057,767 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Expenses: </P>
</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Research and development </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,642,193 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(46,285) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,595,908 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Government grant </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;69,512 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;69,512 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Sales and marketing </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;396,847 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;30,368 </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;427,215 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Depreciation and amortization </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;173,458 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(173,458) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( b )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Exchange (gain) loss </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;35,129 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;35,129 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Interest expense, excluding accretion of interest and debt settlement </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;203,877 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(137,159) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( c )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;66,718 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;General and administrative </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,368,517 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(506,705) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;861,812 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,889,533 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(833,239) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,056,294 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Operating loss for the period </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(2,849,919) </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;851,392 </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(1,998,527) </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Accretion of interest and debt settlement &nbsp;</P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(711,198) </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;711,198 </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( d )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Other income </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Loss for the period</P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($3,561,117)</P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>$1,562,590</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($1,998,527)</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=430.133 colspan=3><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( a ) - This represents stock-based compensation.</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( b ) - This represents costs related to the amortization of equipment and intangible assets.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( c ) - This represents shares issued in settlement of interest expense.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( d ) - This represents accretion of interest and debt settlement related to convertible debentures.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE cellspacing=0><TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=345.933 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=345.933 colspan=4><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>September 30, 2004</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Original</P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Adjustment</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Pro-Forma</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Net sales </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ 3,850,740 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;$3,850,740 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Cost of goods sold </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,130,886 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(14,728) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;3,116,158 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;719,854 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;14,728 </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;734,582 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Expenses: </P>
</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Research and development </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;891,629 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(29,616) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;862,013 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Government grant </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;57,761 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;57,761 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Sales and marketing </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;373,471 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(38,808) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;334,663 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Depreciation and amortization </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;42,374 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(42,374) </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( b )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Exchange (gain) loss </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;68,279 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;68,279 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Interest expense, excluding accretion of interest and debt settlement </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;41,366 </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( c )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;41,366 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;General and administrative </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;1,227,921 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(523,321) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( a )</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;704,600 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;2,702,801 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(634,119) </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;2,068,682 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Operating loss for the period </P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(1,982,947) </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;648,847 </P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(1,334,100) </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Accretion of interest and debt settlement &nbsp;</P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>(57,475) </P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;57,475 </P>
</TD><TD valign=bottom width=38.8><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>( d )</P>
</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">&nbsp;Other income </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;14,250 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;- </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=38.8><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;14,250 </P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=218.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Loss for the period</P>
</TD><TD valign=bottom width=110.533><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($2,026,172)</P>
</TD><TD valign=bottom width=100.667><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>$706,322</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right>($1,319,850)</P>
</TD></TR>
<TR><TD valign=bottom width=218.933>&nbsp;</TD><TD valign=bottom width=110.533>&nbsp;</TD><TD valign=bottom width=100.667>&nbsp;</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=430.133 colspan=3><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( a ) - This represents stock-based compensation.</P>
</TD><TD valign=bottom width=38.8>&nbsp;</TD><TD valign=bottom width=95.933>&nbsp;</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( b ) - This represents costs related to the amortization of equipment and intangible assets.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( c ) - This represents shares issued in settlement of interest expense.</P>
</TD></TR>
<TR><TD valign=bottom width=564.867 colspan=5><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">( d ) - This represents accretion of interest and debt settlement related to convertible debentures.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
</BODY>
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{"company-data": {"conformed-name": "UNITY WIRELESS CORP", "cik": "0001100451", "assigned-sic": "4812", "irs-number": "911940650", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-30620", "film-number": "051200352"}, "business-address": {"street1": "10900 NE 4TH STREET", "street2": "SUITE 2300", "city": "BELLEVUE", "state": "WA", "zip": "96004", "phone": "1800337664"}, "mail-address": {"street1": "10900 NE 4TH STREET", "street2": "SUITE 2300", "city": "BELLEVUE", "state": "WA", "zip": "96004"}, "former-company": {"former-conformed-name": "SONIC SYSTEMS CORP", "date-changed": "19991206"}}
FOR IMMEDIATE RELEASE
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 OR 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 14, 2005
Unity Wireless Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-30620
Commission File Number)
91-1940650
(IRS Employer Identification No.)
7438 Fraser Park Drive, Burnaby, BC Canada  V5J 5B9
(Address of principal executive offices and Zip Code)
(800) 337-6642
(Registrant's telephone number, including area code)
not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (
see
General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On November 14, 2005 the Registrant issued a press release announcing financial results for the third quarter ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01
(A)
Exhibits
99.1
Press release of Unity Wireless Corporation dated November 14, 2005.
SIGNATURES
Pursuant to 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 hereunto duly authorized.
UNITY WIRELESS CORPORATION
By:
/s/ Ilan Kenig
ILAN KENIG
Chief Executive Officer and Principal Executive Officer
Date: November 14, 2005
INDEX TO EXHIBITS
Exhibit No.
Description
99.1
Press release of Unity Wireless Corporation, dated November 14, 2005.
Unity Wireless
Technology & Innovation to Power a Wireless World!
FOR IMMEDIATE RELEASE
Unity Wireless Reports Results for the Third Quarter 2005
Gross Margins Reach 21% for Third Quarter; Revenue up 20% for 9-Month Period
November 14, 2005 - BURNABY, BC – Unity Wireless Corporation (OTCBB: UTYW), a developer of integrated wireless subsystems, power amplifiers and coverage enhancement solutions, reported today summary financial results for the three and nine-month periods ended September 30, 2005.
Revenue for the third quarter ended September 30, 2005 was $949,700 compared to $1,027,160 in the same period in 2004. The gross margin of $201,865, or 21.26%, for the third quarter of 2005 declined from a gross margin of $223,590, or 21.76%, for the third quarter of 2004.  Loss for the third quarter of 2005 was $1,017,538 compared to $605,447 for the same period in 2004.  Net of stock based compensation and other non-cash expenses of $390,805 in the 2005 period and $165,099 in the 2004 period, loss for the third quarter of 2005 was $626,733 compared to $440,348 for the same period in 2004.
Revenue for the nine-month period ended September 30, 2005 was $4,634,158, up 20.34%, compared to $3,850,740 in the same period in 2004. The gross margin of $1,039,614, or 22.43% of net sales, for the nine month period ended of 2005 increased from a gross margin of $719,854, or 18.69% of net sales, for the nine month period ended of 2004.  Loss for the nine-month period was $3,561,117 compared to $2,026,172 for the same period in 2004. Net of stock based compensation and other non-cash expenses of $1,562,590 in the 2005 period and $706,322 in the 2004 period, loss for the nine-month period was $1,998,527 compared to $1,319,850 for the same period in 2004.
Ilan Kenig, President and CEO of Unity Wireless, stated, "Revenues were lower than anticipated because certain expected orders were postponed. We did, however, increase the scope of our potential growth as we diversified both our product portfolio and customer base. Several products are now qualified for multiple base station configurations with multiple OEM customers and are ready for ramp-up when we receive production orders.  Our Operator Solutions Group has several evaluation and field trials underway in North America for our tower mounted amplifier (TMA) products, and the Group is also developing new coverage solutions for specific customer opportunities in North America and Europe. We feel that penetrating the operator market segment with these products in a meaningful way can be accomplished more quickly than it has taken to penetrate the OEM market."
The Company's Form 10Q-SB for the period ended September 30, 2005 contains additional financial information, and can be accessed at the Company's website or through the Securities and Exchange Commissions website at www.sec.gov.
About Unity Wireless
www.unitywireless.com
Unity Wireless is an ISO 9001:2000 certified developer of RF (radio frequency) power amplifiers, components, integrated front-ends and coverage enhancement solutions for wireless communications networks.  Our products are an integral part of the base station and repeater infrastructure that comprise the backbone of wireless communications networks around the world.  From analog cellular to 3G mobile and fixed wireless applications from 450 MHz to 3.5 GHz, Unity Wireless products deliver enhanced efficiency and performance with field-proven quality and reliability in tens of thousands of base stations and repeaters around the world.
Forward Looking Statements
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The words "believe," "expect," "feel," "plan," "anticipate," "should" and other similar expressions generally identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.  These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, inability to raise the funds necessary for the Company's continued operations, changes in external market factors including the economy and other risks and uncertainties indicated in the Company's most recent SEC filing on form SB-2.  Actual results could differ materially from the results referred to in the forward-looking statements.
Non-GAAP Financial Information
This press release contains certain non-GAAP financial information as defined by the U.S. Securities Commission Regulation G.  Pursuant to the requirements of this regulation, a reconciliation of this financial information to our financial statements as prepared under generally accepted accounting principles in the United States (GAAP) is included in this press release.  Unity's management believes that the disclosure of this non-GAAP financial information is useful to our investors and the investment community since certain non-cash charges and expenses may not be reflective of future expenses.
For More Information Contact:
Dallas Pretty, Unity Wireless, (604) 267-2736   dallasp@unitywireless.com
Mike Mulshine, Osprey Partners, (732) 292-0982   osprey57@optonline.net
UNITY WIRELESS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
RECONCILIATION OF PRO FORMA RESULTS
Three months ended
September 30, 2005
Original
Adjustment
Pro-Forma
Net sales
$   949,700
$           -
$   949,700
Cost of goods sold
747,835
(6,165)
( a )
741,670
201,865
6,165
208,030
Expenses:
Research and development
393,744
(9,001)
( a )
384,743
Government grant
14,245
-
14,245
Sales and marketing
134,573
(9,091)
( a )
125,482
Depreciation and amortization
79,546
(79,546)
( b )
-
Exchange (gain) loss
(6,909)
-
(6,909)
Interest expense, excluding accretion of interest and debt settlement
72,838
(57,632)
( c )
15,206
General and administrative
415,389
(113,393)
( a )
301,996
1,103,426
(268,663)
834,763
Operating loss for the period
(901,561)
274,828
(626,733)
Accretion of interest and debt settlement
(115,977)
115,977
( d )
-
Other income
-
-
-
Loss for the period
($1,017,538)
$390,805
($626,733)
( a ) - This represents stock-based compensation.
( b ) - This represents costs related to the amortization of equipment and intangible assets.
( c ) - This represents shares issued in settlement of interest expense.
( d ) - This represents accretion of interest and debt settlement related to convertible debentures.
Three months ended
September 30, 2004
Original
Adjustment
Pro-Forma
Net sales
$ 1,027,160
$           -
$1,027,160
Cost of goods sold
803,570
(5,608)
( a )
797,962
223,590
5,608
229,198
Expenses:
Research and development
243,524
(8,043)
( a )
235,481
Government grant
15,407
-
15,407
Sales and marketing
96,207
8,638
( a )
104,845
Depreciation and amortization
15,812
(15,812)
( b )
-
Exchange (gain) loss
69,628
-
69,628
Interest expense, excluding accretion of interest and debt settlement
26,843
-
( c )
26,843
General and administrative
341,651
(124,192)
( a )
217,459
809,072
(139,409)
669,663
Operating loss for the period
(585,482)
145,017
(440,465)
Accretion of interest and debt settlement
(20,082)
20,082
( d )
-
Other income
117
-
117
Loss for the period
($605,447)
$165,099
($440,348)
( a ) - This represents stock-based compensation.
( b ) - This represents costs related to the amortization of equipment and intangible assets.
( c ) - This represents shares issued in settlement of interest expense.
( d ) - This represents accretion of interest and debt settlement related to convertible debentures.
UNITY WIRELESS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
RECONCILIATION OF PRO FORMA RESULTS
Nine months ended
September 30, 2005
Original
Adjustment
Pro-Forma
Net sales
$ 4,634,158
$           -
$4,634,158
Cost of goods sold
3,594,544
(18,153)
( a )
3,576,391
1,039,614
18,153
1,057,767
Expenses:
Research and development
1,642,193
(46,285)
( a )
1,595,908
Government grant
69,512
-
69,512
Sales and marketing
396,847
30,368
( a )
427,215
Depreciation and amortization
173,458
(173,458)
( b )
-
Exchange (gain) loss
35,129
-
35,129
Interest expense, excluding accretion of interest and debt settlement
203,877
(137,159)
( c )
66,718
General and administrative
1,368,517
(506,705)
( a )
861,812
3,889,533
(833,239)
3,056,294
Operating loss for the period
(2,849,919)
851,392
(1,998,527)
Accretion of interest and debt settlement
(711,198)
711,198
( d )
-
Other income
-
-
-
Loss for the period
($3,561,117)
$1,562,590
($1,998,527)
( a ) - This represents stock-based compensation.
( b ) - This represents costs related to the amortization of equipment and intangible assets.
( c ) - This represents shares issued in settlement of interest expense.
( d ) - This represents accretion of interest and debt settlement related to convertible debentures.
Nine months ended
September 30, 2004
Original
Adjustment
Pro-Forma
Net sales
$ 3,850,740
$           -
$3,850,740
Cost of goods sold
3,130,886
(14,728)
( a )
3,116,158
719,854
14,728
734,582
Expenses:
Research and development
891,629
(29,616)
( a )
862,013
Government grant
57,761
-
57,761
Sales and marketing
373,471
(38,808)
( a )
334,663
Depreciation and amortization
42,374
(42,374)
( b )
-
Exchange (gain) loss
68,279
-
68,279
Interest expense, excluding accretion of interest and debt settlement
41,366
-
( c )
41,366
General and administrative
1,227,921
(523,321)
( a )
704,600
2,702,801
(634,119)
2,068,682
Operating loss for the period
(1,982,947)
648,847
(1,334,100)
Accretion of interest and debt settlement
(57,475)
57,475
( d )
-
Other income
14,250
-
14,250
Loss for the period
($2,026,172)
$706,322
($1,319,850)
( a ) - This represents stock-based compensation.
( b ) - This represents costs related to the amortization of equipment and intangible assets.
( c ) - This represents shares issued in settlement of interest expense.
( d ) - This represents accretion of interest and debt settlement related to convertible debentures.