UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

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[   ]      Definitive Additional Materials
[   ]      Soliciting Material Pursuant to ss.240.14a-12

Telemetrix Inc.
__________________________________________________________________________
(Name of Registrant as Specified In Its Charter)

Not Applicable
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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TELEMETRIX INC.
7105 LaVista Place, Suite 100
Longmont, CO 80503
(877) 733-6259

Dear Shareholders:

     We are pleased to enclose your Notice of Annual Meeting of Shareholders and Proxy Statement for the Annual Meeting of Shareholders of Telemetrix Inc. (the “Company”) to be held at 10:00 a.m. on April 14, 2006, at the company offices at 7105 LaVista Place, Suite 100, Longmont, CO 80503.

     At the Annual Meeting, you will be asked to: (i) elect five (5) nominees to serve as directors of the Company; (ii) ratify the appointment of Stark Winter Schenkein and Co., LLP as the independent accountants of the Company for the current fiscal year ending December 31, 2006; (iii) increase the number of authorized shares of common stock of the Company from the present 25 million to 750 million and increase the number of authorized shares of preferred stock from 5 million to 25 million; (iv) approve the Settlement Agreement between the Company and the majority Shareholders of the Company and Nyssen LP (“Nyssen”), and TowerGate Finance Ltd. (“TowerGate”); (v) approve an employee stock option plan with18 million common shares or approximately 10% of our authorized common stock (assuming the Company’s Shareholders approve an increase in the Company’s authorized common stock) to incentivize the performance of our existing and new management; and (vi) ratify the action of the members of the Board of Directors for the period April 1, 1999 – April 14, 2005.

     The Board of Directors hopes that you will be able to attend the Shareholders’ Annual Meeting. We look forward to meeting each of you and discussing with you the events that occurred during the Company’s past fiscal year and its current prospects. If you are unable to attend in person or to otherwise be represented, we urge you to vote by signing the enclosed Proxy and mailing it to the Company in the accompanying stamped envelope at your earliest convenience. Please be sure to sign it exactly as the name or names appear on the Proxy. We urge you to read the enclosed Proxy Statement, which contains information relevant to the actions to be taken at the Annual Meeting.

Sincerely yours,


William W. Becker
Chairman of the Board and Chief Executive Officer

Date: March 15, 2006

Enclosures

TELEMETRIX INC.
Notice of Annual Meeting of Shareholders
To be Held April 14, 2006

TO OUR SHAREHOLDERS:

     Notice is hereby given that the Annual Meeting of the Shareholders of Telemetrix Inc. (the “Company”) will be held on April 14, 2006, at 10:00 a.m. (MST) at 7105 LaVista Place, Suite 100, Longmont, CO 80503, for the following purposes:

     1.     to elect a Board of Directors consisting of five (5) persons to serve until the next Annual Meeting of the Shareholders or until their respective successors have been duly elected and qualified;

     2.     to consider and vote upon the ratification of the appointment by the Board of Directors of Stark Winter Schenkein and Co., LLP, accountants for the Company for the current fiscal year ending December 31, 2006;

     3.     to increase the number of authorized shares of common stock of the Company from the present 25 million to 750 million, and increase the number of authorized shares of preferred stock from 5 million to 25 million;

     4.     to approve the Settlement Agreement, dated as of November 30, 2004, among the Company, certain of the Company’s majority Shareholders, Nyssen LP and TowerGate Finance Ltd.;

     5.     to approve an employee stock option plan with 18 million common shares or ten percent (10%) of our authorized common stock (assuming the Company’s Shareholders approve an increase in the Company’s authorized common stock as set forth in Item 3, above) to incentivize the performance of our existing management;

     6.     to ratify the actions of the members of the Board of Directors for the period April 1999 – April 14, 2006; and

     7.     to transact such other business as may properly come before this meeting or any postponement or adjournment thereof.

     The Board of Directors has fixed March 30, 2006, as the record date for the determination of Shareholders entitled to vote at the annual meeting. Only Shareholders of record at the close of business on that date will be entitled to notice of, and to vote at, the annual meeting.

     YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.

Dated: March 15, 2006	By Order of the Board of Directors,
	William W. Becker, Chief Executive Officer

TELEMETRIX INC.
7105 LaVista Place, Suite 100
Longmont, CO 80503
(877) 733-6259

Proxy Statement for Annual Meeting of Shareholders

INTRODUCTION

     The Board of Directors of Telemetrix Inc. (the “Company”), whose executive offices are located at 7105 LaVista Place, Suite 100, Longmont, CO 80503, hereby solicits your Proxy in the form enclosed for use at the Annual Meeting of Shareholders to be held on April 14, 2006, 10:00 a.m. (Mountain Time) at the Company’s executive offices, or at any postponement or adjournment thereof (“Annual Meeting”). The expense of soliciting your Proxy will be borne by the Company. The approximate day on which this Proxy Statement and the accompanying form of Proxy will be first mailed or given to Shareholders is March 15, 2006.

     At the Annual Meeting, you will be asked to (i) elect five (5) nominees to serve as the directors of the Company; (ii) ratify the appointment of Stark Winter Schenkein and Co., LLP, as the independent accountants for the Company for the current fiscal year ending December 31, 2006; (iii) increase the number of authorized shares of common stock of the Company from the present 25 million to 750 million and increase the number of authorized shares of preferred stock from 5 million to 25 million; (iv) approve the Settlement Agreement, dated as of November 30, 2004 (“Settlement Agreement”), among the Company and certain of its majority Shareholders and Nyssen LP (“Nyssen”) and TowerGate Finance Ltd. (“TowerGate”); (v) approve an employee incentive stock option plan with 18 million common shares or of our authorized common stock (assuming Shareholder approval of an increase in our capitalization as set forth in Item III above) to incentivize the performance of our existing and new management; and (vi) ratify the actions of the members of the Board of Directors for the period April 1999 – April 14, 2006.

     We urge you to sign, date and return your Proxy in the enclosed envelope promptly to make certain that your shares will be voted at the Annual Meeting.

DATE, TIME AND PLACE

     The Annual Meeting will be held on April 14, 2006, at 10:00 a.m. (Mountain time), at the executive offices of the Company at 7105 LaVista Place, Suite 100, Longmont, CO 80503, for the following purposes:

RECORD DATE; VOTING RIGHTS

     The Company had 24,999,682 shares of Class A common stock, $0.01 par value (the “Common Stock”) outstanding at the close of business on March 30, 2006, the record date (the “Record Date”). Only Shareholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting. The Company has determined that those Shareholders who are signatories to the Settlement Agreement among Telemetrix and certain of its majority Shareholders and Nyssen and TowerGate, which our Shareholders are being requested to approve, will not be entitled to vote at the Annual Meeting on the approval of the Settlement Agreement. The signatory Shareholders have concurred with the Company’s determination on this matter.

     The presence, in person or by Proxy, of holders of a majority of all the shares of common stock entitled to vote at the Annual Meeting constitutes a quorum of the Company’s Shareholders. Each share of Common Stock outstanding is entitled to one vote on each matter that may be brought before the Annual Meeting. Votes withheld from director-nominees, abstentions, and broker-non-votes will be counted in determining whether a quorum has been reached.

     Directors will be elected by plurality of the votes cast in person or represented by a Proxy at the Annual Meeting and entitled to vote on the election of directors. In all matters other than the election of directors, the affirmative vote of the majority of the votes cast in person or represented by Proxy at the Annual Meeting and entitled to vote on the matter will be the act of the Shareholders. Under Delaware law, the act of “voting” does not include either recording the fact of abstention or failing to vote for a candidate or for approval or disapproval of a proposal, whether the person entitled to vote characterizes his or her or its act as voting. In other words, only those Shareholders who indicate an affirmative or negative decision on a matter are treated as voting, so that ordinarily abstention or a mere absence or failure to vote is not equivalent to a negative decision.

     A broker-non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Broker-non-votes, if any, will not be counted in the calculation of the majority of votes cast and will not have an effect on the outcome of the vote on a matter.

     The Company is not currently aware of any matters that will be brought before the Annual Meeting (other than procedural matters) that are not described in the enclosed Notice of Annual Meeting.

VOTING AND REVOCATION OF PROXY

     A form of Proxy is enclosed. If properly executed and received in time for voting, and not revoked, the enclosed Proxy will be voted as indicated in accordance with the directions thereon. If no directions to the contrary are indicated on the Proxy, the persons named in the enclosed Proxy will vote all shares of the Company’s common stock for: (i) the election of all nominees for directors; (ii) ratification of the appointment of Stark Winter Schenkein and Co., LLP as independent accountants of the Company for the current fiscal year ending December 31, 2006; (iii) an increase in the number of authorized shares of common stock of the Company from the present 25 million to 750 million and an increase in the number of authorized shares of preferred stock from 5 million to 25 million; (iv) approval of the Settlement Agreement among the Company and certain of the majority Shareholders of the Company and Nyssen and TowerGate; (v) approve an employee incentive stock option plan with 18 million common shares or ten percent (10%) of our authorized common stock (assuming the Shareholders approve the increase in the Company’s authorized capital as set forth in Item iii above) to incentivize the performance of our existing and new management and (vi) ratification of the actions of the members of the Board of Directors for the period April 1, 1999 – April 14, 2006.

     Sending in a signed Proxy will not affect a Shareholder’s right to attend the Annual Meeting, nor will it preclude a Shareholder from voting in person because the Proxy is revocable at any time prior to the voting on such Proxy. Any Shareholder given a Proxy has the power the revoke it by giving written notice to the Secretary of the Company at any time before the Proxy is exercised, including by filing a later-dated Proxy with the Secretary or by appearing in person at the Annual Meeting and making a written demand to vote in person.

SOLICITATION OF PROXY

     The expense of Proxy solicitation will be borne by the Company. In addition to solicitation by mail, proxies may be solicited in person or by telephone, or by directors, officers or employees of the Company without additional compensation. Upon request by record holders of the Common Stock who are brokers, dealers, banks, or voting trustees, or their nominees, the Company is required to pay the reasonable expenses incurred by such record holders for mailing Proxy material and annual Shareholder reports to any beneficial owners of Common Stock.

FISCAL YEARS

     As used in this Proxy Statement, “fiscal 2005” means the Company’s fiscal year ended December 31, 2005. “Fiscal 2006” means the Company’s fiscal year ending December 31, 2006.

SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS

     The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of February 15, 2006, by (i) each person known by the Company to be the beneficial owner of more than five percent (5%) of the Company’s Common Stock; (ii) each director of the Company; (iii) each executive officer of the Company named in the Summary Compensation Table which follows; and (iv) all current directors and executive officers of the Company as a group. Except as otherwise indicated below, the beneficial owners of the Common Stock have sole investment and voting powers with respect to such shares.

Security Holder	Total Securities as of 2/15/06	Ownership Percentage
William W. Becker	6,273,763	25.1
Michael J. Tracy	4,885,504	18.8
Michael L. Glaser	1,432,544	5.5
Gary R. Brown	2,000	negligible (0.00008)
Dianne B. Larkowski	6,523,496	26.1
Vintage Investments, Ltd.	1,725,000	6.9

     The shares of Common Stock “beneficially owned” by an individual are determined in accordance with the definition of “beneficial ownership” set forth in the regulations of the Securities and Exchange Commission. Accordingly, they may include shares owned by or for, among other things, the wife, minor children, or certain other relatives of such individual, as well as other shares to which the individual has or shares voting or investment power or has the right to acquire, within sixty (60) days after February 15, 2006.

     William W. Becker’s beneficial ownership of 6,273,763 shares of our common stock is composed of: (a) 4,136,263 shares held in the name of Hartford Holdings Ltd., a wholly owned company of William Becker; (b) 87,500 shares that he individually owns; (c) 50,000 shares that are owned by his wife, Christine Becker; (d) 2,000,000 shares held in the name of the following entities located at c/o The Harbour Trust Co. Ltd, One Capital Place, P.O. Box 1787, Cayman Islands, British West Indies, in which William W. Becker has voting over such shares: (i) 750,000 shares owned by Ardara Investment, Ltd. A trust that is maintained for the benefit of one of William Becker’s (son/grandson); (ii)500,000 shares owned by Wyse Investments, Ltd./ a Trust that is maintained for the benefit of one of William Becker’s (son/grandson); (iii) 750,000 shares owned by Ionian Investments, Ltd., a trust that is maintained for the benefit of one of William Becker’s (son/grandson).

     Michael J. Tracy’s beneficial ownership of 4,885,504 shares of our common stock are shares that he individually owns.

     Michael L. Glaser’s ownership of 1,432,554 shares of our common stock is composed of: (a) 816,533 shares owned by Michael L. Glaser individually; (b) 12,500 shares owned jointly by Michael L. Glaser and his wife, Catherine M. Glaser; and (c) 603,521 shares in the name of Michael L. Glaser IRA Rollover.

     Gary R. Brown, a director of the Company, owns 2,000 shares of our stock individually.

     Dianne B. Larkowski owns 6,523,496 shares of our common stock individually..

     Vintage Investments, Ltd. is a Cayman Islands corporation located at One Capital Place, 3rd Floor, Shedden Road, Georgetown, Grand Cayman Island, British West Indies. Marguerite Laura Becker, the former wife of William W. Becker, is the beneficial owner of Vintage.

PROPOSAL ONE

ELECTION OF DIRECTOR

     The Bylaws of the Company provide that the Board of Directors shall consist of not less than one or more than nine directors, and that the number of directors to be elected, subject to the foregoing limits, shall be determined from time to time by the Board of Directors. The Board of Directors has set the number of directors at five (5) At the Annual Meeting, five directors who will constitute the Company’s entire Board of Directors, are to be elected to hold office until the next Annual Meeting and until their respective successors have been duly elected and qualified. The Board of Directors has designated the persons listed below to be the nominees for election as directors. The Company has no reason to believe that any of the nominees will be unavailable for election; however, should any nominee become unavailable for any reason, the Board of Directors may designate a substitute nominee. The Proxy agents intend (unless authority has been withheld) to vote FOR the election of the Company’s nominees. Two of the nominees currently serve as directors of the Company, and all nominees have consented to being named in this Proxy Statement and to serve, if elected.

     The Board of Directors will consider Shareholder nominations for directors submitted in accordance with the procedures set forth in the Company’s Bylaws. In general, the procedures set forth in the Company’s Bylaws provide that a notice relating to the nomination must be timely given in writing to the Secretary of the Company prior to the meeting. To be timely, the notice must be delivered by March 30, 2006. Such notice must be accompanied by the nominee’s written consent, contain information relating to the business experience and background of the nominee, and contain information with respect to the nominating Shareholder.

INFORMATION AS TO DIRECTORS AND NOMINEES

     The following table contains information with respect to the nominees or Directors of the Company.

NAME	AGE	POSITION	DIRECTOR SINCE
William W. Becker	76	Director, Chairman of the	1999
		Board, Acting Chief
		Executive Officer
Gary R. Brown	54	Director	2004
Jonathan Piers Daniel Linney	35	Director	--
Christopher David Andrew Fitzsimmons	40	Director	--
Larry L. Becker	48	Director	--

DESCRIPTION OF BUSINESS EXPERIENCE OF EACH OF THESE PERSONS

1. William W. Becker, Chairman of the Board and Chief Executive Officer. Mr. Becker is a principal of Hartford Holdings Ltd. (“HHL”), one of our largest Shareholders. Mr. Becker founded a number of companies in telecommunications, cable television, oil and gas, real estate development, and other industries. From 1993 to 1995, Mr. Becker was a principal of WWB Oil & Gas, Ltd. Mr. Becker was a significant investor of ICG Communications, Inc., a competitive local exchange carrier, for which he served as Chairman and Chief Executive Officer from 1987 to June 1995. Mr. Becker devotes the majority of his time to Telemetrix.

2. Gary R. Brown has been Secretary Treasurer since September 16, 2004, and has been a Director since October 9, 2004. Mr. Brown is Executive Vice President of Global Sales Operations for Tekelec Inc., a manufacturer next generation switching systems, STP, and communication applications worldwide. From December 2001 to October 2003, Mr. Brown served as Chief Operating Officer of Metro-Optics, also a manufacturer of telecommunications switching systems. Mr. Brown has more than 30 years’ experience in the telecommunications industry.

3. Piers Linney. Mr. Linney is a Director of TowerGate Ltd., a United Kingdom company, which has provided corporate finance, fund raising and strategic advisory services to the Company since 2003. From March 2001 to December 2003, Mr. Linney was Director of Lalazar Ltd., London, England, United Kingdom, a media company where he was Director and Chief Operating Officer, with operational responsibility for 40 staff members. From March 2000 to December 2000, Mr. Linney was also a Director and Chief Operating Officer of Doctor’s World PLC which had ten employees. Mr. Linney was an investment banking associate of Credit Suisse First Boston, London, England, United Kingdom, from January 1998 to March 2000. Mr. Linney is a graduate of the University of Manchester with a degree in law and accounting, and the College of Law, London, England, United Kingdom, and is a solicitor of the Supreme Court of England. Mr. Linney also holds a registered securities representative license from the Securities Institute, London, England, United Kingdom. Mr. Linney is a member of the Law Society of England and Wales.

4. Christopher Fitzsimmons. Since March 2000, Mr. Fitzsimmons has served as a Director of TowerGate Ltd. TowerGate Ltd. has provided corporate finance, fundraising and strategic advisory services to the Company since October 2003. From April 1999 until March 2000, Mr. Fitzsimmons was a Director of Technology and Finance Ltd., in Cambridge, where he was responsible for preparing business plans for early stage technology companies in the Cambridge area. Mr. Fitzsimmons holds a Bachelor’s degree in production engineering from Nottingham University, a Master's in Science and Industrial Robotics from Cranfield University, and holds a Master’s in Business Administration from Cranfield School of Management. Mr. Fitzsimmons is a registered investment representative licensed in the United Kingdom. Mr. Fitzsimmons is a member of the Charter Institute of Marketing, where he holds a diploma in marketing.

5. Larry L. Becker. Mr. Becker manages and oversees the operations of Becker Capital Management LLC and various other Becker family-owned companies. Mr. Becker has held the positions of CEO with VR-1, Inc., AirCell Inc., SkyConnect Inc. and other telecommunication companies. Mr. Becker holds a Bachelor of Commerce in Finance from the University of Alberta. Mr. Becker is a director of numerous other companies within the Becker Family portfolio.

BOARD OF DIRECTORS, COMMITTEES, AND ATTENDANCE AT MEETINGS

     During fiscal 2005, the Board of Directors of the Company held 5 meetings. Messrs. Becker and Brown, the Company's existing Directors, attended 100% of the meetings.

     The Board of Directors has acted on all important issues in the past but will consider creation of committees in 2006 that will include an Audit Committee and a Compensation Committee.

DIRECTOR COMPENSATION

     The Company currently provides $1500 compensation to each Director, plus travel expenses, for attendance at Board of Directors meetings. We will provide the same compensation to Directors who attend committee meetings, once committees are formed.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED HEREIN.

PROPOSAL TWO
RATIFICATION OF INDEPENDENT ACCOUNTANTS

     The Board of Directors has selected the firm of Stark Winter Schenkein and Co., LLP, as independent accountants to the Company for the fiscal year ending December 31, 2005. This accounting firm has no direct or indirect financial interest in the Company.

     Although not legally required to do so, the Board of Directors is submitting the appointment of Stark Winter Schenkein and Co., LLP, as the Company’s independent accountants for fiscal 2005 for ratification by Shareholders at the Annual Meeting. If a majority of votes cast in person or by Proxy at the Annual Meeting is not voted for ratification, the Board will consider its appointment of Stark Winter Schenkein and Co., LLP as independent accountants for the current fiscal year. Stark Winter Schenkein and Co., LLP has served as the Company’s independent accountants since 2003.

     A representative of Stark Winter Schenkein and Co., LLP will be invited to the Annual Meeting and will have the opportunity to make a statement if he or she desires to do so. It is anticipated that such representative will be available to respond to appropriate questions with Shareholders.

AUDIT AND OTHER FEES

Audit and Review Fees		$35,000
Financial Information	$               0
Systems and Design	$               0
Implementation Fees	$               0
All other Fees		$         0
For Tax Services		$  4,500

     The Board of Directors has considered the compatibility of non-audit services with the auditors’ independence.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION
OF THE APPOINTMENT OF STARK WINTER SCHENKEIN AND CO., LLP
AS INDEPENDENT ACCOUNTANTS FOR FISCAL 2005.

PROPOSAL THREE
RECAPITALIZATION OF COMPANY

     We must increase the Company’s authorized share capital to allow the Company to raise additional capital to effectuate our business objectives, and to allow for implementation of the Settlement Agreement among the Company and certain of its majority Shareholders and Nyssen and TowerGate, if approved by Shareholders at the Annual Meeting. At present, we are authorized to issue 25 million shares of Common Stock of which 24,999,692 shares are issued and outstanding. We anticipate that the Company will issue more than 300 million shares of common shares and preferred shares in the future to accommodate its capital needs and to implement the Settlement Agreement. Accordingly, we believe it is necessary to increase the Company’s authorized share capital to 750 million Common Shares and 25 million Preferred Shares.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO INCREASE THE AUTHORIZED SHARES OF THE COMPANY COMMON STOCK TO 750 MILLION SHARES AND INCREASE THE AUTHORIZED SHARES OF THE COMPANY’S PREFERRED STOCK TO 25 MILLION SHARES.

PROPOSAL FOUR
APPROVAL OF THE SETTLEMENT AGREEMENT DATED AS OF
NOVEMBER 30, 2004

     During 2004, a dispute arose among the Company and certain of its majority Shareholders, and the Company and Nyssen and TowerGate. As a result, litigation between the Company and certain of the majority Shareholders, and the Company and Nyssen and TowerGate ensued in September 2004.

On September 10, 2004, we filed a Complaint in the United States District Court in the Southern District of New York against Michael J. Tracy (“Tracy”), Michael L. Glaser (“Glaser”), and William W. Becker (“Becker”), in case number 04CV7255. The Complaint sought an award for compensatory damages and an injunction against Tracy, Glaser and Becker for breach of fiduciary duty, costs and expenses for litigation, including reasonable attorneys’ fees, expert fees, and other disbursements, and against Tracy for conversion, and awarding us, as plaintiff, such other and further relief as may be deemed just and proper.

     On September 16, 2004, we filed a complaint in the United States District Court for the District of Nebraska, in case number 7:04CV5020, against TowerGate and Nyssen. The Complaint alleged fraudulent misrepresentation against TowerGate, fraudulent concealment against Nyssen, breach of fiduciary duty against TowerGate, civil conspiracy against TowerGate and Nyssen, breach of contract against TowerGate, and breach of the covenant of good faith and fair dealing against TowerGate. The Complaint sought preliminary and permanent injunction, declaratory judgment and an accounting. The Complaint also requested a jury trial.

     On December 10, 2004, we and Tracy, Glaser and Becker and other of our majority Shareholders and TowerGate and Nyssen entered into the Settlement Agreement, in which the parties agreed to dismiss the above-described lawsuits, and settle the dispute between the Company and TowerGate and Nyssen, and the Company and Becker, Glaser and Tracy.

     The Settlement Agreement provides that the parties agree to put in place an interim board of directors consisting of William W. Becker as Chairman and interim Chief Executive Officer, Larry L. Becker, son of William Becker and one of our substantial Shareholders through Becker Capital Management, LLC, Piers Linney, CEO of TowerGate, and Matthew Hudson, who controls Nyssen, or his designee. In addition, the Settlement Agreement states that William W. Becker and Larry L. Becker and the entities which are affiliated with them (the “Becker Entities”), which include Hartford Holdings Ltd., a Cayman Islands corporation solely owned by William W. Becker; Becker Capital Management, LLC, a Colorado limited liability company solely owned by Larry L. Becker; Wyse Investments, Ltd., a Cayman Islands corporation whose shares are held by a trust that is being maintained for the benefit of one of William W. Becker’s grandsons; Ionian Investments Ltd., a Cayman Islands corporation whose shares are held by a trust that is maintained for the benefit of Larry L. Becker, Ardara Investments Ltd., a Cayman Islands corporation whose shares are held by a trust that is maintained for the benefit of Lorn Becker, son of William W. Becker; Vintage Investments Ltd., a Cayman Islands corporation whose shares are held by a trust that is maintained for Marguerite L. Becker, former wife of William W. Becker, and TowerGate/Nyssen (“Nyssen Group”) have the right to appoint two directors, so long as either group individually, respectively, holds in excess of 25% of our common stock.

     Moreover, the Settlement Agreement states that the Becker Entities and Nyssen Group shall be entitled, respectively, to appoint one director for as long as they hold in excess of 50% of our common stock and at least 25% of our common stock. Mr. William W. Becker is a Canadian citizen. Mr. Larry L. Becker is also a Canadian citizen. Messrs. Linney and Hudson are British subjects. TowerGate and Nyssen are formed under the laws of the United Kingdom. Mr. Hudson has designated Christopher Fitzsimmons, also a British subject, to serve as a director of the Company.

     The Settlement Agreement also provides that our majority Shareholders, together with the Becker Entities and Nyssen Group, would vote all shares held by them to ensure that the Becker directors are always appointed in accordance with the agreement. Additionally, the Settlement Agreement states that other directors will be appointed to the Board in due course and good faith on the basis that their appointment is in our best interests and in the best interests of our Shareholders.

     The Settlement Agreement further provides that we will increase our authorized number of common voting shares of the Company to 500 million, and that our majority Shareholders agree to take all actions necessary and in accordance with applicable laws, statutes, rules and regulations to facilitate the increase in the issuance of our share capital. As explained above under Proposal Three, we have determined that an increase in our authorized common shares to 500 million shares is insufficient in light of our future capital needs. Accordingly, we have determined that an increase in our authorized common shares to 750 million common shares and 25 million preferred shares in our authorized capitalization will best serve our anticipated capital requirements.

     The Settlement Agreement provides that, subject to the approval of a level of foreign ownership by the Federal Communications Commission (“FCC”), certain of our stockholders will convert debt owed to them evidenced by promissory notes to our common shares. Thus, subject to prior FCC approval, Nyssen will convert the approximately $1.6 million we owe it at $.04 per share, resulting in the issuance of 40,000,000 new shares of our common voting stock to Nyssen; TowerGate, subject to prior FCC approval, will convert $800,000 we owe it for financial services at $.04 per share resulting in the issuance of 20,000,000 new shares of our common voting stock to TowerGate, and Larry L. Becker, subject to FCC approval, will convert $36,175 we owe him at $.001 per share for the issuance of 36,175,000 shares of common voting stock in accordance with our promissory note to him, resulting in the issuance of 36,175,000 new shares of our common voting stock to Larry L. Becker.

     In addition, under the Settlement Agreement we agreed to issue a new promissory note to Mr. Tracy, our former President, CEO and Director, or his affiliate for a loan he made to us of $467,000. The note will be due and payable in 24 months from December 31, 2004, and will bear simple interest at 10% per annum from December 31, 2004, until maturity. At maturity, Mr. Tracy or his affiliate may convert this note at his option into our common voting stock at $.02 per share. We have already issued the note to Mr. Tracy.

     The Settlement Agreement also provides that since the Company requires immediate access to new financing to continue operations, Mr. William W. Becker and his affiliates (the “Becker Entities”) will invest $200,000 into the Company at $.02 per share, for 10,000,000 newly-issued common shares, and $100,000 at $.10 per share into the Company for 1 million newly-issued common shares, and Nyssen will invest $100,000 into the Company stock at $0.02 per share for 5 million newly-issued common shares and $200,000 into the Company stock at $.10 per share for 2 million newly-issued common shares. Becker Capital Management and Nyssen have made these investments into the Company as of December 31, 2005. As of February 8, 2006, Becker Capital Management, LLC has now loaned the Company a total of $911,000 and Nyssen has advanced the Company $840,000. All of the advances in excess of the $300,000 (each) described above are represented by demand notes and bear interest at 15% per annum.,

     The Settlement Agreement further provides that we will establish a stock option plan with ten percent (10%) of our fully diluted share capital to incentivize the performance of our existing and new management.

     The Settlement Agreement specifically provides that Delaware law shall apply to it. Delaware law requires approval of our Shareholders to increase our authorized capital. Moreover, Delaware law requires Shareholder approval of a stock option plan to incentivize the performance of our existing and new management.

     In summary, the parties agreed in the Settlement Agreement to undertake the following actions subject to Delaware law, including approval of Shareholders, and approval of the SEC:

     1.    Elect a new Board of Directors;

     2.    Increase the Company’s authorized share capital;

     3.    Effect material share issuances to the Becker Entities, including Becker Capital Management LLC.

     4.    Effect material share issuances to Nyssen and TowerGate based upon Nyssen’s conversion of its convertible loans to the Company made in 2003 and 2004, and to TowerGate based upon corporate finance, fundraising and strategic advisory services provided to the company since 2003 in the amount of $800,000;

     5.    Adopt an employee stock option plan to incentivize the performance of the Company’s existing and new management; and

     Additionally, the share issuances to Larry L. Becker, Nyssen, TowerGate and to Becker Capital Management, LLC require prior FCC approval. Accordingly, the implementation of this Settlement Agreement in all material respects is subject to compliance with Delaware law, including the approval of our Shareholders, and prior approval of the FCC.

     All parties to the Settlement Agreement are either beneficial owners of the Company’s common stock, current or proposed members of the Company’s management, and/or parties or affiliates of parties involved in litigation that gave rise to the Settlement Agreement. Thus, the Company has determined that those Shareholders who are signatories to the Settlement Agreement will not be entitled to vote at the Annual Meeting on the approval of the Settlement Agreement. The signatory Shareholders have concurred in the Company’s determination on this matter.

     Although the parties agreed to implement the Settlement Agreement as soon as practical, the parties have only taken three actions to do so as of the date of this Proxy Statement. First, the Company dismissed its Complaint against Messrs Tracy, Becker and Glaser on December 15, 2004, and dismissed its Complaint against TowerGate/Nyssen on December 20, 2004. Second, we filed an application with the FCC for approval of the stock conversion by Nyssen and TowerGate, and by Larry L. Becker. The application included a copy of the Settlement Agreement. The application for approval is pending before the FCC. Finally, we issued Tracy Broadcasting Corporation a promissory note for $467,000 for the $467,000 loan made to us. As provided in the Settlement Agreement, the note is due and payable on December 31, 2006, at maturity. Tracy Broadcasting Corporation may convert this loan at its option at maturity into our common stock at $.02 per share. The Company filed a Form 8-K with the SEC on December 21, 2004, related to this litigation, in which the Company described the terms of the Settlement Agreement.

     The Company’s majority Shareholders who as signatories to the November 30, 2004, Settlement Agreement believe that the Agreement is fair to all Shareholders and is in the interest of the Company and all of its Shareholders. The majority Shareholders who signed the Agreement recognized that the alternative to the Agreement was bankruptcy, which would not have served the best interests of the Company, its creditors or Shareholders. Thus, they agreed to its terms and conditions.

     The Company’s Board of Directors is currently comprised of two persons, William W. Becker and Gary R. Brown. Mr. Becker is a signatory to the Settlement Agreement. The Company has determined that Mr. Becker is not entitled to vote on the approval of the Agreement. Mr. Becker has concurred with this determination. Mr. Becker believes the Agreement is fair to all Shareholders and in the best interests of the Company. Mr. Brown is not a signatory to the Agreement and does not own a significant number of shares in the Company. Nonetheless, Mr. Brown agrees that the Settlement Agreement is fair to all Shareholders and is in the best interest of the Company.

     We attach a copy of the November 30, 2004 Settlement Agreement to this Proxy Statement as ATTACHMENT 3 for Shareholder review.

     The Board of Directors has decided not to make a recommendation on the proposal, and will leave the Proposal to those Shareholders entitled to vote on this Proposal to approve or reject it.

PROPOSAL FIVE
APPROVAL OF EMPLOYEE STOCK OPTION PLAN

     As contemplated in the November 30, 2004, Settlement Agreement, the Board of Directors seeks approval of an employee stock option plan to incentivize existing and new management equal to 10% of the outstanding stock of the Company, assuming the Shareholders approve an increase in the Company’s capitalization. The Board believes this plan will enhance the Company’s ability to attract top management as well as reward existing employees. We attach a copy of the Plan to this Proxy Statement as ATTACHMENT 1 for shareholder review..

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE THE EMPLOYEE STOCK OPTION PLAN.

PROPOSAL SIX
RATIFICATION OF ACTIONS OF BOARD ACTIONS

     Since the Company’s inception in April 1999, we have not had an annual general meeting of Shareholders due to our developmental stage of growth and the occurrence of the recent litigation between the Company and certain of its Shareholders and the Company and Nyssen and TowerGate. The Company’s Board of Directors, however, has always taken a hands-on approach to achieve the Company’s business goals. As a result, the Company has progressed to the point where its telecommunications services are almost ready for full-scale commercialization. The Company’s Board of Directors believes that it has acted in the best interest of the Shareholders since the Company’s inception in 1999, and requests that the Shareholders ratify its actions taken from April 1999 to date.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE ACTIONS OF THE BOARD OF DIRECTORS FOR THE PERIOD APRIL 1999 TO APRIL 14, 2006.

INFORMATIONAL
EXECUTIVE COMPENSATION

     Under the rules established by the SEC, the Company must provided certain data and information with respect to the compensation and benefits provided to the Company’s Chief Executive Officer and other executive officers of the Company. The disclosure requirements for the Chief Executive Officer and other executive officers include the use of tables and a report explaining the rationale and consideration that led to fundamental compensation decisions effecting these individuals.

COMPENSATION OF CHIEF EXECUTIVE OFFICER AND OFFICERS

     William W. Becker is Chief Executive Officer of the Company. Mr. Becker has no contract with the Company for employment. The Company does not compensate Mr. Becker for his position as Chief Executive Officer.

     Mr. Gary R. Brown is Secretary of the Company. Mr. Brown does not have a contract for employment with the Company for his position as Secretary. The Company does not compensate Mr. Brown for his position as Secretary.

     The Company’s decision not to compensate Messrs Becker and Brown is based upon the Company’s current financial status. Furthermore, neither Mr. Becker nor Mr. Brown has requested any compensation from the Company, and have indicated a willingness to serve in these capacities until the Company is able to improve its financial condition based on its goal of reaching complete commercialization of its telecommunications service.

     The Company believes that Mr. Becker has the background and skills to serve as the Company’s Chief Executive Officer, based upon his past business experience and his successful endeavors, particularly in the telecommunications industry.

     The Company also believes that Mr. Brown possesses the background and skills necessary to serve as the Company’s Secretary, particularly based upon Mr. Brown’s long experience in the telecommunications industry. The Company expects to compensate Messrs. Becker and Brown when the Company improves its financial condition based on its goal of achieving complete commercialization of its telecommunications services.

     The Company’s previous Chief Executive Officer, Mr. Michael J. Tracy, was contracted for employment as Chief Executive Officer. The duration of the contract was for four years, ending in 2004. As a result of the Settlement Agreement among the Company and certain of its majority Shareholders, and Nyssen and TowerGate, Mr. Tracy resigned his position as Chief Executive Officer and as a Director of the Company.

SECURITY OWNERSHIP OF MANAGEMENT AND OFFICERS

Title of Class	Name and Position	Amount
Common	William W. Becker, Chairman of the
	Board, Acting CEO and Principal
	Financial Officer	6,273,763
Common	Gary R. Brown, Secretary, Treasurer
	And Director	2,000

STOCK OPTIONS AND WARRANTS OUTSTANDING 12/31/05

Name	Options	Warrants	Price	Expires
William W. Becker	50,000	0	$     4.75	4/30/10
	100,000	0	$     0.68	4/30/11
Michael J. Tracy	50,000	0	$     4.75	4/30/10
	100,000	0	$     0.68	4/30/11
Michael L. Glaser	50,000	0	$     4.75	4/30/10
	100,000	0	$     0.68	4/30/11

     The Company has obligations to issue its common shares at December 31, 2005, pursuant to the conversions of various loans and accrued interest, incentive shares, and services and the Settlement Agreement, as follows:

Telemetrix Inc.
Summary of Common Shares Currently Outstanding,
to be Issued Upon Increase in Capitalization and Total Shares Outstanding
after Shares Issued Upon Increase in Capitalization and with Percentages of Ownership February 15, 2006

Shareholder	Shares Outstanding 12/31/2005	Percent of Ownership 12/31/2005		Shares to be Issued Upon Increase in Capitalization/ Recapitalization	Total Shares Outstanding After Shares Issued Upon Increase in Capitalization	Total Percent of Ownership
Ardara Investments Ltd.	750,000	3	.00%	--	750,000	0	.42%
Becker Capital Management LLC	659,006	2	.64%	51,388,342	52,047,348	28	.84%
Becker, Christine	50,000	0	.20%	--	50,000	0	.03%
Becker, William	87,500	0	.35%	--	87,500	0	.05%
BGC Holdings Inc.	174,259	0	.70%	--	174,259	0	.10%
Glaser, Michael	1,432,554	5	.73%	5,909,200	7,341,754	4	.07%
Hartford Holdings Ltd.	4,136,263	16	.55%	--	4,136,263	2	.29%
Ionian Investments Ltd.	750,000	3	.00%	--	750,000	0	.42%
Dianne Larkowski	6,523,496	26	.09%	3,519,004	10,042,500	5	.56%
TowerGate Capital LP		0	.00%	20,000,000	20,000,000	11	.08%
Tracy, Michael	4,885,504	19	.54%	27,667,140	32,552,644	18	.04%
Vintage Investment Ltd.	1,725,000	6	.90%	--	1,725,000	0	.96%
Wyse Investments Ltd.	500,000	2	.00%	--	500,000	0	.28%
Nyssen LP		0	.00%	47,000,000	47,000,000	26	.04%
All others	3,326,100	13	.30%	--	3,326,100	1	.84%
Total Shares	24,999,682	100.00%		155,483,686	180,483,368	100.00%

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company conducts certain operations from its offices at 1225 Sage, Gering, Nebraska. Mr. Michael J. Tracy, formerly President and Chief Executive Officer and Director, owns the building in Gering, Nebraska. The Company pays Mr. Tracy rent of $1,860.00 per month, for the use of 4,800 sq. feet of space.

     The Company believes that the lease arrangement with Mr. Tracy is on terms no less favorable than the Company could have obtained in transactions with unrelated third parties.

     The Company’s executive offices are located at 7105 LaVista Place, Suite 100, Longmont, CO 80503, and are co-located with the offices of Becker Capital Management, LLC, a major Shareholder in the Company. The Company pays Becker Capital Management LLC $600.00 monthly rent for lease of 500 square feet of space and $15,636.45 for reimbursement of overhead expenses at Becker Capital Management LLC’s offices.

     The Company believes that the lease arrangement with Becker Capital Management LLC is on terms no less favorable than the Company could have obtained in transactions with unrelated third-parties.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Under Section 16(a) of the Securities Exchange Act of 1934, the Company’s directors, officers, and persons who are beneficial owners of more than ten percent (10%) of the Company’s Common Stock are required to report their beneficial ownership of Common Stock and any changes in that ownership to the SEC. Specific due dates of these reports have been established by the SEC, and the Company is required to report any failure to file by these dates. The Company believes that all of these filing requirements have been satisfied by its directors and officers, and by the beneficial owners of more than ten percent (10%) of the Company’s Common Stock.

     In making the foregoing statements, the Company relies on copies of the reporting forms received by it or written representations from certain reporting persons that all Form 5s (Annual Statement of Changes in Beneficial Ownership) that were required to be filed under the applicable rules of the SEC were filed as of the date of this Proxy Statement.

OTHER BUSINESS

     The Company does not currently know of any matters that will presented for action at the Annual Meeting, other than those set forth in this Proxy Statement. If other matters properly come before the Annual Meeting, proxies submitted on the enclosed form will be voted by the persons named in the enclosed Proxy with respect to such other matters and in accordance with their best judgment.

SHAREHOLDER PROPOSALS

     It is presently contemplated that the annual meeting of Shareholders following the fiscal 2005 meeting will be held on or about April 14, 2007. Under the rules of the SEC, and the Company’s Bylaws, in order for any appropriate Shareholder proposal to be considered for inclusion in the Proxy materials of the Company for fiscal 2006 Annual Meeting of Shareholders, it must be received by the Secretary of the Company no later than March 11, 2007. However, if the date of the 2007 Annual Meeting is changed by more than thirty (30) days from the date of the current proposed date of the Annual Meeting, or in May 2007, then the deadline for submission of Shareholder proposals is a reasonable time before the Company begins to print and mail its Proxy materials.

     In addition to the Company’s Bylaws, notice of a Shareholder proposal or of a nomination by a Shareholder of individuals for election to the Company’s Board of Directors must be accompanied by the nominee’s written consent, containing information relating to business experience and the background of the nominee, and contain certain information with respect to the nominating Shareholders and persons acting in concert with the nominating Shareholders. Shareholders are also advised to review the Company’s Bylaws which contain additional requirements with respect to Shareholder proposals and Director Nominations. If a Shareholder proposal is received after the notice date, but the presiding officer of the meeting permits the proposal to be made, proxies appointed by the Company may exercise discretionary authority when voting on such proposals.

ANNUAL REPORT

     The Company’s Annual Report on Form 10-KSB/A ended December 31, 2004, which filing is required by the Securities and Exchange Commission, is provided with this Proxy Statement as ATTACHMENT 2.

     The Company’s SEC filings are also available at the SEC’s website at http://www.sec.gov.

FORWARD LOOKING STATEMENTS

     This Proxy Statement, and materials delivered with this Proxy Statement, include “Forward-Looking” Statements. All statements other than statements of historical facts included in this Proxy Statement and materials delivered with this Proxy Statement, including without limitations, statements regarding our financial position, business strategy, and plans and objectives of management for future operations and capital expenditures, are Forward-Looking Statements. Although we believe that the expectations reflected in the Forward-Looking Statements and the assumptions upon which the Forward-Looking Statements are based are reasonable, we can give no assurance that such expectations and assumptions will prove to have been correct. Additional statements concerning important factors that could cause actual results to differ materially from our expectations (“Cautionary Statements”) are disclosed in the Forward-Looking Statements – Cautionary Statements section of our Annual Report on Form 10KSB for the year ended December 31, 2004. All written and oral Forward-Looking Statements attributable to us or persons acting on our behalf are subsequent to the date of this Proxy Statement are expressly qualified in their entirety by the Cautionary Statements.

By Order of the Board of Directors:

Gary R. Brown
Secretary

TELEMETRIX INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
April 14, 2006
Solicited on Behalf of the Board of Directors

     The undersigned hereby constitutes and appoints William W. Becker or Gary Brown, or either of them, with full power to act alone, as attorney-in-fact in Proxy of the undersigned, with full power of substitution for and in the name, place and stead of the undersigned to appear at the Annual Meeting of Shareholders of Telemetrix Inc. (the “Company”), to be held on the 14th day of April, 2006, and at any postponement or adjournment thereof, and devote all of its shares of Common Stock of the Company which the undersigned is entitled to vote, with all powers and authority the undersigned would possess if personally present. The undersigned directs that this Proxy be voted as indicated on the reverse side of this Proxy. The Proxy agents present and acting in person or by their substitute, or (only if one is present and acting, then that one) may exercise all powers conferred by this Proxy.

     Unless contrary instructions are given, the shares represented by this Proxy will be voted in favor of Items, 1, 2, 3, 4, 5 and 6. This Proxy is solicited on behalf of the Board of Directors of Telemetrix Inc.

     EVEN IF YOU PLAN TO ATTEND THIS MEETING, PLEASE COMPLETE, DATE AND SIGN, ON THE REVERSE SIDE, AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.

TELEMETRIX INC.

1. The election of the nominees listed below as the Company's directors as more fully described in the accompanying Proxy Statement.

Nominees:	For all the nominees listed (except as marked to the contrary)	Withhold Authority to Vote for All Directors Check This Box
	FOR [   ]	AGAINST [   ]	ABSTAIN [   ]
William W. Becker
Gary R. Brown
Piers Linney
Chris Fitzsimmons
Larry Becker

2. To consider and vote upon the ratification of the appointment by the Board of Directors of Stark Winter Schenkein and Co., LLP, as accountants for the Company for the current fiscal year ending December 31, 2006.

FOR  [   ]             AGAINST  [   ]             ABSTAIN  [   ]

3. To increase the number of authorized shares of Common Stock of the Company from the present 25 million to 750 million, and increase the number of authorized shares of Preferred Stock from 5 million to 25 million.

FOR  [   ]             AGAINST  [   ]             ABSTAIN  [   ]

4. To approve the Settlement Agreement dated November 30, 2004, among the Company, certain of the Company’s majority Shareholders, and Nyssen LP and TowerGate Finance Ltd.

FOR  [   ]             AGAINST  [   ]             ABSTAIN  [   ]

5. To approve an employee stock option plan with ten percent (10%) of our outstanding common stock (assuming Shareholder approval of an increase in our capitalization as set forth in Proposal 3 above) to incentivize the performance of our existing and new management.

FOR  [   ]             AGAINST  [   ]             ABSTAIN  [   ]

6. To ratify the actions of the members of the Board of Directors for the period April 1999 through April 14, 2006.

FOR  [   ]             AGAINST  [   ]             ABSTAIN  [   ]

     This Proxy, when properly executed will be voted as directed. The Board of Directors recommends a vote for all nominees listed in Item 1, for the proposals in listed in Items 2, 3, 4, 5 and 6. If no directions to the contrary are indicated, the persons named in the Proxy intend to vote FOR the election of the named nominees for Director, and FOR ratification of Stark Winter Schenkein and Co., LLP, as accountants for the Company for the current fiscal year ending December 31, 2006.

     The undersigned hereby acknowledges receipt of the Company’s Annual Financial Report on Form 10-KSB, the Company’s Proposed Employee Stock Option Plan, Notice of the Company’s 2006 Annual Meeting of Shareholders and the Proxy Statement relating thereto.

NAME ________________________________________________________________

PRINTED NAME: ________________________________________________________

SIGNATURE:____________________________________   DATE: ________________

NAME ________________________________________________________________

PRINTED NAME: ________________________________________________________

SIGNATURE:____________________________________   DATE: _________________

NOTE: Please sign exactly as shown on your stock certificate and on the envelope in which this Proxy was mailed. When signing as a partner, corporate officer, attorney, executor, administrator, trustee, guardian, etc., give full title as such and sign your own name as well. If shares in the Company are held jointly, each joint owner must sign.

PROXY DELIVERY TO TELEMETRIX INC.

     You may choose any of the following options for returning your Proxy to Telemetrix Inc.:

     Electronically:

     By email: include your name and address and how you vote on Items 1, 2, 3, 4, 5 and 6. Email to: rose @beckercapital.com

     Telephone: call our toll-free number (877) 733-6259, state your name, address, and how you vote on each item.

     Mail: mail the Proxy in the envelope provided to:

Telemetrix Inc.
7105 LaVista Place, Suite 100
Longmont, CO 80503

ATTACHMENT 1

TELEMETRIX INC. 2006 EMPLOYEE INCENTIVE STOCK OPTION PLAN

I.     Purpose

     The purpose of the Telemetrix Inc. (“Telemetrix”) 2006 Employee Incentive Stock Option Plan (“Plan”) is to attract and retain high-performing individuals who will make immediate and long-term contributions to Telemetrix’s business by providing such individuals with the opportunity to acquire an ownership interest in Telemetrix through the award of Incentive Stock Options (“Incentive Stock Options”).

II.      Definitions

     Whenever the following words are capitalized and used in the Plan, they shall have the respective meanings set forth below:

     A.    “Board of Directors” means the Board of Directors of Telemetrix;

     B.    “Cause” shall include, but not be limited to (i) an act or acts or personal dishonesty of a Participant in the Plan (“Participant”) at the expense of Telemetrix or any of its subsidiaries, (ii) a willful violation of the Participant’s employee duties and responsibilities, (iii) a conviction of a Participant of a felony or a crime involving moral turpitude, (iv) unauthorized disclosure of Telemetrix’s confidential information, (v) competing with Telemetrix or any of its subsidiaries, and (vi) conduct substantially prejudicial to Telemetrix. The Committee shall have the exclusive right to determine whether Cause exists and the Committee’s determination shall be binding and conclusive on all Participants and Telemetrix.

     C.    “Code” means the Internal Revenue Code of 1986, as amended.

     D.    “Committee” means a Committee of at least two individuals appointed by the Board of Directors to administer the Plan. If the Company shall register its common stock under the Securities Act of 1933, as amended (“the 1933 Act”) then the Committee shall consist of at least two or more individuals meeting the “non-employee director” standard set forth in Rule 16b-3 promulgated by the U.S. Securities and Exchange Commission (“SEC”) under Section 16 of the 1934 Exchange Act, as amended (“the 1934 Act”), and the outside director (“outside director”) standard set forth in the regulations promulgated under Section 162(m) of the Code.

     E.    “Telemetrix” means Telemetrix Inc. and its subsidiaries.

     F.    “Disability” means the permanent and total disability of a Participant as defined in Section 22(e)(3) of the Code.

     G.    “Exercise Price” means the price at which shares may be purchased by a Participant upon exercise of an Incentive Stock Option covering such shares in accordance with the terms and conditions prescribed by this Plan.

     H.    “Fair Market Value” means as of any given date, the fair market value of the Shares as determined by the Committee in good faith and in its sole discretion, or if the shares are publicly traded, the mean of the highest and lowest quoted selling prices of the Shares on the exchange on which the shares are listed, or if applicable, the mean of the highest and lowest quoted bid prices of the shares as furnished by the National Association of Security Dealers’ automated quotation system, or electronic bulletin board, as of the most recent trading date, or, if applicable, the mean of the highest and lowest quoted bid prices of a share as stated by the Pink Sheets, as of the most recent trading date.

     I.    “Grant Agreement” means an agreement setting forth the terms of an award of Incentive Stock Options to an employee of Telemetrix which has entered into by Telemetrix and such employee.

     J.    “Incentive Stock Option” or “Option” means a stock option which complies with Section 422 of the Code and which is granted under this Plan to an employee of Telemetrix.

     K.    “Participant” means an individual selected by the Committee for an Incentive Stock Option award by the Committee in accordance with Section 5 of this Plan.

     L.    “Plan” means this Telemetrix 2006 Stock Option Plan as amended, or restated from time to time.

     M.    “1933 Act” shall mean the Securities Act of 1933, as amended.

     N.    “Share” means a share of Telemetrix's common stock, $.001 par value per share.

III.      Number of Shares

     Eighteen million (18,000,000) shares shall be available for grant under this Plan. If any Incentive Stock Option granted under the Plan shall terminate or expire for any reason without having been exercised in full, the unissued shares covered by such Incentive Stock Option shall again be available for grant under the Plan. The shares issued by the company under this Plan may be either issued shares or treasury shares.

IV.      Administration

     This Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum. The Committee shall have full power and authority to: (a) prescribe, amend and rescind rules and procedures governing the administration of this Plan; (b) interpret the provisions of this Plan, and establish and interpret rules and procedures with respect to the operation of this Plan; (c) determine the eligibility of employees of Telemetrix and its subsidiaries to participate in this Plan in accordance with the standards set forth in this Plan; (d) determine, in accordance with the Plan and Section 422 of the Code, the terms of Incentive Stock Options granted to employees of Telemetrix and its subsidiaries; and (e) delegate certain other duties of the Committee to one or more agents to facilitate the administration of this Plan. Each action of the Committee which is within the scope of the authority delegated to the Committee shall be binding on all persons.

V.      Eligibility in Participation

     Incentive Stock Options may be granted only to employees of Telemetrix upon selection by the Committee, in its sole discretion. An employee who has been selected by the Committee for a grant of an Incentive Stock Option must, as a condition to receiving such grant, enter into a Grant Agreement with the company specifying the terms of such grant.

     Selection of an employee for an award shall not require the Committee to make another grant to such Participant at any other time during such Participant’s employment with Telemetrix.

VI.      Incentive Stock Options

     A.    Committee Powers. The Committee shall have the right and power to grant, in accordance with this Plan, Incentive Stock Options on such terms and conditions as may be established by the Committee in accordance with this Plan in Section 422 of the Code on or prior to the date of grant of such Incentive Stock Option.

     B.    Exercise Price. The exercise price of an Incentive Stock Option shall be equal to the established fair market value of the shares at the time of grant; provided that the exercise price of an Incentive Stock Option granted to a holder of more than ten percent (10%) of the outstanding shares shall be one-hundred ten percent (110%) of the fair market value of the shares on the date of the grant.

     C.    Term. The term of the Incentive Stock Option granted under this Plan shall be established by the Committee at the date of grant and shall not exceed ten (10) years from the date of grant for all Incentive Stock Options; provided, however, in the case of an Incentive Stock Option with an exercise price set at one-hundred ten percent (110%) of fair market value in accordance with Paragraph 6B above, the term of such Incentive Stock Option shall not exceed five (5) years from the date of grant.

     D.    When Exercisable. An Incentive Stock Option granted under this Plan shall become exercisable upon such date or dates specified by the Committee, in its sole discretion, in the Grant Agreement relating to such Incentive Stock Option. To the extent required by Section 422 of the Code, the aggregate fair market value is determined as of the date of grant, of shares for which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year shall not exceed $100,000.

     E.    Conditions Applicable to Exercise. An Incentive Stock Option may be exercised by a Participant upon the date or dates in accordance with the conditions specified in the Grant Agreement executed by such Participant which relates to such Incentive Stock Option. However, no Incentive Stock Option shall be exercised for a fraction of a share.

     F.    How to Exercise. To exercise an Incentive Stock Option, the Participant must deliver written notice to the Chief Financial Officer of Telemetrix or any other Telemetrix executive provided by the applicable Grant Agreement after the date such Incentive Stock Option becomes exercisable, but prior to the expiration of the term of such Incentive Stock Option or of the cancellation or forfeiture of such Incentive Stock Option.

     G.    Notice. Written notice delivered to Telemetrix by the Participant shall state the number of shares being purchased and must be accompanied by payment of the full purchase price of such shares. Method of payment for the shares for which the Incentive Stock Option are exercised shall be set forth in the Participant’s Grant Agreement, and at the Committee’s full discretion, and may include any or all of the following methods: (1) delivery of a personal check or money order payable to Telemetrix; (2) delivery of shares which may have been held by such Participant for at least six (6) months; (3) delivery by the Participant of a promissory note with recourse; and/or (4) if there is a public market for the shares, the delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to Telemetrix either sale proceeds of shares sold to pay the purchase price or the amount loaned by the broker to pay the purchase price.

     G.    Limitation on Transfer of Incentive Stock Options. No Incentive Stock Option granted under this Plan shall be transferable otherwise and by will or of the laws of descent and distribution, and any Incentive Stock Option granted under this Plan may be exercised during the lifetime of the person to whom Incentive Stock Option shall initially have been granted only by such person or by such person’s guardian or legal representative.

VII.      Termination

     A.    Death, Disability or Termination of the Participant’s Employment by Telemetrix Other Than for Cause. In the event of death or disability of the Participant, or termination of the Participant’s employment by Telemetrix other than for cause, all vested Incentive Stock Options shall be exercisable for a period which shall not exceed the expiration date(s) of such Incentive Stock Options determined by the Committee and set forth in the applicable Grant Agreement(s) for the period permitted by Section 422 of the Code. All uninvested Incentive Stock Options may become exercisable to the extent determined by the Committee, in its sole discretion.

     B.    Voluntary Termination. In the event of a voluntary termination of employment by Participant, all uninvested Incentive Stock Options shall be immediately forfeited by the Participant without any consideration.

     C.    Termination for Cause. In the event of termination for cause, all vested and unvested Incentive Stock Options shall be immediately forfeited by the Participant without any consideration.

     D.    Obligation to Enter into Voting Trust Agreement with Telemetrix. If a Participant determines employment with Telemetrix under Paragraph 7A, 7B or 7C above, and Telemetrix has not registered its shares under the 1993 Act, at the request of Telemetrix, such Participant shall be required to enter into a voting trust agreement with Telemetrix on such terms and conditions as may be determined by the Committee, in its sole discretion. In accordance with the voting trust agreement, such Participant shall give an authorized representative of Telemetrix an irrevocable right to exercise all voting and consent rights in connection with shares purchased upon exercise of Incentive Stock Options granted to such Participant under this Plan.

     The obligations set forth under this Paragraph 7D shall terminate on the date Telemetrix registers shares under the 1933 Act.

VIII.     Change of Control

     A.    Acceleration of Incentive Stock Options. Notwithstanding any provision of this Plan to the contrary, upon the occurrence of a change in control as defined in Paragraph 8B below, all unvested Incentive Stock Options outstanding under this Plan shall become fully exercisable as of the date of the change in control.

     B.    Definition of Change in Control. A change in control shall be deemed to have occurred on the earliest of the following dates: (i) the acquisition, other than from Telemetrix or with the approval of the Board of Directors, of fifty percent (50%) or more of either the then-outstanding shares or the combined voting power of then-outstanding voting securities of Telemetrix entitled to vote generally in the election of directors; (ii) approval by the stockholders of Telemetrix of the sale or other disposition of all or substantially all of Telemetrix’s assets or a sale of all the outstanding shares of common stock of Telemetrix to an unaffiliated entity or individual; or (iii) liquidation or dissolution of Telemetrix.

IX.     No Right to Continued Employment

     Nothing in the Plan or any Grant Agreement shall confer upon any Participant any right to continue in the employment of Telemetrix or interfere in any way with the right of Telemetrix to terminate such Participant’s employment at any time.

X.      Limitation on Rights to Shares

     No Participants shall have any rights as a shareholder to any shares subject to Incentive Stock Options until such Incentive Stock Options have been exercised.

XI.      Investment Representation and Legending of Share Certificates

     As a condition to receiving an Incentive Stock Option grant under the Plan, the Participant shall agree that, unless the shares subject to such Incentive Stock Options have been effectively registered under the 1933 Act, Telemetrix shall be under no obligation to issue shares covered by such Incentive Stock Options unless and until the following conditions have been met:

     A.    That Participant or any other individual who exercises such Incentive Stock Options on behalf of or as a result of a transfer from Participant, shall warrant to Telemetrix prior to receipt of the shares that such person(s) are acquiring such shares for their respective accounts for investment, and not with a view to, or for sale, in connection with, the distribution of any such shares.

     B.    Telemetrix shall have received an opinion of its counsel that shares may be issued upon such particular exercise and compliance with the 1933 Act without registration.

     All share certificates issued upon the exercise of an Incentive Stock Option shall be subject to such stock transfer orders or other restrictions as the Committee may deem advisable under the Plan; the rules, regulations or other requirements of the 1933 Act and the 1934 Act, the rules of any stock exchange upon which such shares are listed, or under applicable federal or state laws; and the Committee may have a legend placed on such share certificates to make appropriate references to such restrictions.

XII.      Adjustment of Shares

     In the event of any corporate change through recapitalization, merger, consolidation, stock dividend, split-up, combination or exchange of shares or otherwise which affects the character and amount of Telemetrix’s shares prior to exercising any Incentive Stock Option granted under this Plan, in such Incentive Stock Options, to the extent not exercised, shall entitle a Participant holding such Incentive Stock Option to such number and kind of shares as such Participant would have been entitled to had such Participant actually owned the shares subject to such Incentive Stock Option at the time of such change. The Committee, in its full discretion, shall determine any adjustments necessary to ensure that the Incentive Stock Option after such changes is equivalent in value to such Incentive Stock Option prior to such change including, but not limited to, changes to the Incentive Stock Option exercise price where the number of shares covered by such Incentive Stock Option(s).

XIII.      Withholding Tax

     Whenever Telemetrix is required to issue shares upon exercise of Incentive Stock Option by a Participant, such Participant shall remit to Telemetrix an amount sufficient to satisfy any federal, state or local income and payroll tax withholding liability prior to the delivery of any certificate(s) for such shares. Upon approval by the Committee, in its sole discretion, any such liability may be satisfied prior to delivery of any certificate(s) by Participant electing to have Telemetrix withhold a number of shares equal in value to such liability, from the number of shares to be issued to such Participant.

XIV.      Termination of Amendment of Plan

     This Plan shall terminate on February 15, 2016, unless previously terminated by action of the holders of a majority of the shares outstanding. Upon termination, no additional Incentive Stock Option grant shall be made; however, outstanding Incentive Stock Options shall remain exercisable under the Plan in accordance with the terms of the applicable Grant Agreement(s).

     The Committee may amend the Plan without further approval of the holders of a majority of the shares outstanding provided that no amendment may materially and adversely affect any Incentive Stock Options previously issued unless the written consent of such affected Participant(s) is received prior to the approval of such proposed amendment.

XV.      Miscellaneous Provisions

     A.    Section headings used in this Plan are for convenience only and shall not be deemed to limited, characterize or affect in any way any provision of this Plan. All provisions in this Plan shall be construed as if no headings had been used in this Plan.

     B.    Severability. Whenever possible, each provision in this Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Plan is held to be prohibited by or under other applicable law, then: (i) such provision shall be deemed amended to accomplish the objective of the provision as originally written to the fullest extent permitted by law, and (ii) all other provisions of this Plan shall remain in full force and effect.

     C.    No Strict Construction. No rule of strict construction shall be applied against Telemetrix, the Committee or any other person in the interpretation of any term of this Plan or any rule or procedure established by the Committee.

XVI. Governing Law

     All issues and questions concerning the construction, validity and enforcement of and interpretation of this Plan shall be governed and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law, rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

     Dated as of February 15, 2006.

Telemetrix Inc.

ATTACHMENT 2
FORM 10-KSB/AAMENDMENT NO. 1

**********

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

FORM 10-KSB/A
AMENDMENT NO. 1

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED December 31, 2004
OR
[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM ____ TO ____

COMMISSION FILE NUMBER 000-14724

TELEMETRIX INC.
(Name of small business issuer in its charter)

DELAWARE	470830931
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

1225 SAGE STREET, GERING, NEBRASKA 69341
(Address of principal executive offices) (Zip Code)

(303) 652-3279
(Registrant’s telephone number, including area code)

_________________
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, Par Value $0.001

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

Yes  [   ]   No  [X]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

State issuer’s revenues for its most recent fiscal year $654,688.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) $499,993.64 as determined by the closing price of $0.02 on December 15, 2005.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes  [   ]   No  [   ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 24,999,682 shares of common stock outstanding as of December 1, 2005.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one):Yes  [   ]   No  [X]

TELEMETRIX INC.

INDEX

Part I.

Item 1	Description of Business	3
Item 2	Description of Property	11
Item 3	Legal Proceedings	12
Item 4	Submission of Matters to a Vote of Security Holders	15
Part II.
Item 5	Market for Common Equity and Related Stockholder Matters	15
Item 6	Management’s Discussion and Analysis or Plan of Operation	17
Item 7	Financial Statements	22
Item 8	Changes in and Disagreements with Accountants and Financial Disclosure	23
Item 8A	Controls and Procedures	23
Part III.
Item 9	Directors, Executive Officers, Promoters and Control Persons;
	Compliance with Section 16(a) of the Exchange Act	24
Item 10	Executive Compensation	26
Item 11	Security Ownership of Certain Beneficial Owners and
	Management and Related Stockholder Matters	28
Item 12	Certain Relationships and Related Transactions	28
Item 13	Exhibits and Reports on Form 8-K	29
Item 14	Principal Accountant Fees and Services	29

2

PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

Organizational History

Telemetrix Inc. was formed through a series of corporate combinations, as follows:

o On January 2, 1999, Telemetrix Resource Group, Inc., a Colorado Corporation (“TRG, Inc.”), acquired Telemetrix Resource Group Limited (TRG Ltd.), a Nova Scotia corporation from Hartford Holdings Ltd., TRG Ltd.‘s sole shareholder, in accordance with a share exchange and plan of reorganization;

o On March 22, 1999, Arnox Corporation (an inactive public corporation), TRG Inc. and Tracy Corporation II d/b/a Western Total Communication (“WTC”) executed a Plan of Reorganization, which contemplated a share exchange and reorganization transaction, which is referred to hereafter as “the combination”;

o On April 5, 1999, the first phase of the combination occurred, whereby Arnox acquired 100% of the issued and outstanding common shares of TRG Inc. in exchange for 6,127,200 shares of Arnox’s common stock;

o Thereafter, Arnox’s historical financial statements become those of TRG Ltd., as TRG Ltd.‘s operations were the ongoing operations of the combined companies;

o On September 22, 1999, the final phase of the combination closed, whereby, we acquired 100% of the issued and outstanding common shares of WTC in exchange for 5,372,800 shares of Arnox’s common stock;

o Through these combinations, the stockholders of WTC and TRG, Inc. acquired a total of 11,500,000 shares of Arnox common stock (approximately 90%) and therefore acquired control of Arnox;

o After the combination, the companies changed their names to reflect their complementary businesses, as follows: (a) Arnox became Telemetrix Inc.; (b) TRG Ltd. became Telemetrix Solutions, Inc.; and (c) WTC became known as Telemetrix Technologies; and

o Tracy Corporation II, a Nebraska corporation, became our wholly owned subsidiary.

As of December 31, 2004, we have 24,999,682 shares of our common stock outstanding. As of December 1, 2005, we have 24,999,682 shares of our common stock outstanding.

BUSINESS

Overview

We offer the following services:

o Wireless paging services

o Wireless Personal Communications Services

o Wireless network access and specific rate plans for customers that use only the personal communications system short message service (SMS). This provides nationwide network short message service. This service is generally used by our customers for telemetry systems, which involve the use of remote devices for data collection and analysis’

o Hardware, software and network operator services solutions

Wireless Paging Service

We own and operate a wireless paging service. Wireless paging is a service that has been in use for over 20 years and is the service originally used by doctors and emergency personnel who were on call, before the common availability of wireless mobile phones. It consists of a small device that is usually attached to one’s belt or carried in a person’s pocket, and which makes a beeping notification sound and either displays a call back number or provides a voice message that has been left by the person accessing the paging device from a telephone. The general use of wireless paging service is declining but paging hardware and service continue to be used in more specialized situations and are a lower priced alternative to a wireless mobile phone. Paging service revenue is decreasing on paging systems nationwide, as it is with the paging network that we operate. Our paging network provides coverage of portions of western Nebraska and southeastern Wyoming.

3

Wireless Mobile Telephone Service

We also own and operate a wireless mobile telephone service. There are two major types of mobile telephone technology in use in the United States, Global System for Mobility (GSM) and Code Division Multiple Address (CDMA). Examples of wireless companies that use GSM are Cingular, Dobson Communications and T-Mobile. Examples of wireless companies that use CDMA are Sprint and Verizon. We currently use GSM technology.

Our wireless mobile telephone service provides local network coverage in western Nebraska and eastern Wyoming only. We have future plans of expanding the network service area to include a portion of Interstate Highway 80 which is in the southern part of our licensed area. We provide network roaming service for customers of T-Mobile, Cingular and Dobson Communications, when in our network coverage area. The income from providing this service is known as “roaming revenue”.

Nationwide network data access

There are a number of companies designing and manufacturing devices to collect data and report events, which has become known in the industry as Machine to Machine (M2M) communications. We were in the business of designing and marketing such devices. During the third quarter of 2002, we determined there would be an increasing amount of market competition by hardware companies with significant expertise and we determined that those companies were better positioned to capitalize on such business opportunities. We also determined that these companies would share the problem of obtaining an affordable data plan to support their hardware and software. Because we did not have existing distribution channels we determined our market opportunity for providing affordable nationwide data only wireless service was greater than our market for application specific telemetry related hardware and software. We created service plans for customers that needed service for their hardware and reporting devices. This presented the opportunity to enter endless vertical markets without specific research and development to produce specific hardware and software for those markets and removed the necessity to launch an extensive customer focused marketing program..

We currently provide nationwide GSM network access on a wholesale basis for hardware that communicates using the short message service (SMS). We activate Subscriber Identity Module (SIM) cards for telemetry and telematic applications, and have rate plans that do not include monthly voice service fees. We deliver nationwide GSM service through agreements with network roaming partners, primarily Cingular and T-Mobile. We issue SIM cards and provide service to send and receive messages to our SIM cards virtually anywhere in the United States. This service is necessary to make the M2M hardware operate.

SMS is simply a service which allows customers to send and receive text messages on their digital phones. Each message may be up to a maximum of 160 characters long. Telemetry and telematic customers use this message protocol to wirelessly communicate with their hardware devices.

Our immediate objective is to increase the amount of message traffic for delivery on the networks operated by our roaming partners and also increase the roaming traffic on our network from our roaming partners. The next objective is to integrate General Packet Radio Service (GPRS), into our data offering. GPRS is a GSM data transmission technique that transmits and receives data in packets at high speeds and is particularly suited for Internet access.

Hardware, software and network operator service solutions

Our company also provides mobile switching services and other essential wireless services to Wilkes Telephone and Electric Company, (Wilkes) is a small PCS wireless operator located in Washington, GA. The expertise and talent necessary to operate a small network is difficult to acquire. Through Telemetrix Wilkes is able to get the services necessary to operate their local transmitters and handle voice and data without the need for installation of expensive and complicated equipment. Telemetrix has connected the central office equipment located in Gering, Nebraska with the equipment operated by Wilkes and the local network operates as if the equipment were owned and operated by Wilkes This saves Wilkes a tremendous amount of time and expense in making their wireless network operational and also made their network profitable more quickly. Wilkes uses the Telemetrix Mobile Switching Center and also uses Telemetrix sources for financial settlement and billing, and has not had to spend time finding qualified and competent personnel to work on their technical network operational issues.

4

OUR BILLING PRACTICES

We charge our customers based on the following 3 billing levels:

o Monthly pager service fees

o Per month for wireless network access and per message for SMS

o Professional services, which include billing and network services

DIVISIONS

We operate the following divisions:

o Telemetry and Pager Services – Our Telemetry and Pager Services Division provides SMS and pager services

o Reseller Division – We have agreements with agents and resellers that purchase our services at wholesale and then resell them at their retail rates

o Network Services-We provide switching and other network services to customers

During the first-nine months of 2004, we had a division which was called our Centregate Division. This operation was based in Atlanta, GA and was to market and support our carrier services market, including billing and network services. For a number of reasons, we determined it was not feasible to operate a remote office and staff and the agreements with those staff members were terminated in September, 2004.

GEOGRAPHIC MARKETS

Our primary geographic markets are the United States, Canada, and Mexico.

DISTRIBUTION AND MARKETING METHODS

o Resellers/Agents – We have agreements with resellers and agents that purchase our services from our net price sheets and then resell the services at their retail prices to their customers; and

o Internet Web Site- We get inquiries from our website and then work directly with prospective customers, vendors and application service providers and place qualified prospective customers on a trial service through our network.

FUTURE BUSINESS PLANS

Our future business plans during 2005, will include the following:

o Expanding Reseller Program – We will attempt to expand our telemetry services related business by adding resellers that market such services.

o Additional network services, including GPRS which will enhance the services available for sale to the existing customer base and which will also increase the amount of roaming revenue on the local network from our network roaming partners such as Cingular and T-Mobile.

o Gaining full functionality of the billing system thereby increasing the number of services which will be available to Wilkes.

5

COST OF COMPLIANCE WITH ENVIRONMENTAL LAWS

We have no costs associated with environmental regulations related compliance and we do not anticipate any future costs associated with such compliance.

INTELLECTUAL PROPERTY RIGHTS

On January 11, 2000, the U.S. Patent and Trademark Office (“PTO”) issued the Company Patent No. 6,014,089 (the “089 Patent”), which is directed to an apparatus and method for transmitting data to and from a data collection device using the short message service functionality of the control channel of a personal communications system. We have been notified by the PTO that the 089 Patent has been withdrawn because we failed to make an annual maintenance payment due in January 2004. The Company has filed a petition with the PTO for reinstatement of this patent.

On November 21, 2000, the PTO issued the Company Patent No. 6,150,955 (the “955 Patent”) which is directed to the use of a telemetry data system for monitoring certain digital packets associated with a digital communications control channel, the identification of certain packets, and the replacement of certain non-information bearing packets with packets that contain useful data and information. This patent will expire in the year 2017.

On April 9, 2002, the PTO issued the Company Patent No. 6,369,719 (the “719 Patent”), which is directed to an apparatus and method for collecting and transmitting utility meter data and other information by means of a wireless network. The patent will expire in 2019.

TOWERS

As more fully detailed under Item 2, Description of Properties, we own, rent to others or rent from others certain tower sites in Wyoming and Nebraska. Twelve of these towers are used to support simple antennas which are used in our paging business.

Six of these tower sites are used in our PCS Network operation.

LICENSES

Our wholly owned subsidiary, Tracy Broadcasting II, holds the following Federal Communications Commission radio frequency licenses:

o Personal Communications System (PCS) license, referred to by the Federal Communications Commission as a Basic Trading Area 411 license, for Scottsbluff, Nebraska. This license entitles us to operate a PCS wireless network in this area. The network is used to provide mobile telephone service to the local population and also persons from other PCS mobile telephone companies that are “roaming” in that area. Our business agreements with other PCS networks allow our customers to “roam” on those networks for voice service out of our coverage area.

o 18 Paging and Mobile Telephone licenses serving 18 locations in Western Nebraska, Eastern Wyoming, and Northeastern, Colorado which give us the exclusive right to use a one-way radio frequency to communicate with the paging devices of our customers for paging service. The licenses are not shared which gives our paging customers a higher level of interference free voice and digital paging service.

6

EMPLOYEES

We have 4 full time direct or contract employees in our Gearing, Nebraska office, as follows:

o Company Operations Management

o Infrastructure Hardware Technician

o Central Office Switch Technician

o 1 Billing and Accounting Person that is contracted from Tracy Broadcasting;

Through September, 2004 we had 5 full time direct or contract employees in our Atlanta, Georgia office, as follows:

o Chief Executive Officer

o Chief Operating Officer

o Vice President of Sales

o Management Accountant

o Engineering Services that are obtained from one engineer on a contract basis

The Atlanta office and operations were discontinued in September 2004 and these employees and contractors were dismissed.

We have no employees that are members of labor unions. We also use the services of independent contractors and consultants.

COMPETITION

Competitive Business Conditions and Our Place in the Market

The markets for all of our services are increasingly competitive. Our competitors have substantially longer operating histories, greater name recognition, larger customer bases and greater financial and technical resources than us. Because we are financially and operationally smaller than our competitors, we will encounter difficulties in capturing market share. Our competitors are able to conduct extensive marketing campaigns and create more attractive pricing for their target markets than we are. In addition, we do not have an established brand name or reputation while our competitors have significantly greater brand recognition, customer bases, operating histories, and financial and other resources.

Some of our biggest competitors in the telemetry services market are:

o Kore Wireless

o Aeris

o Cingular

o T-Mobile

Some of our biggest competitors in the pager market are:

o Wireless Telephone companies such as Alltel

o Action Communications

Some of our biggest competitors in our billing systems market are:

o RedKnee

o Amdocs; and

o Verisign

7

Our Plan to Compete

We plan to compete in the following ways:

o Attempt to provide a superior level of customer care and service to developers of new and innovative technologies utilizing digital wireless communications systems

o Utilize attractive pricing plans that are not easily duplicated by larger wireless carriers

o Attempt to secure marketing agreements with primary vendors and service providers that bring new, innovative and advanced services to market.

GOVERNMENTAL REGULATION

Wireless telecommunications services are subject to significant regulation. We could become subject to additional regulatory requirements as our services grow. We are subject to regulations under the Communications Act of 1934, which includes the Telecommunications Act of 1996. The Federal Communications Commission (FCC) regulates the facilities and services we use to provide, originate, or terminate interstate or international communications. Our PCS and other wireless services require radio frequency licenses from the FCC or a contractual arrangement with a licensee. We have a PCS license, which was obtained in the C Block License Auctions. We also have paging facility licenses, which are used in the operation of the existing paging system. We maintain FCC licenses on all of the communication facilities. The PCS license is granted on a 10-year basis with an expectation of renewal at the end of that term. The paging licenses are granted on a 10-year basis also with a reasonable expectation of renewal.

MATERIAL AGREEMENTS

Network Service Agreement with Wilkes Telephone and Electrical Company, Washington, GA.

We have an agreement dated January 16, 2004, with Wilkes, which is headquartered in Washington, GA. Under the agreement, we provide switching, SMS, roaming support, interconnection and carrier billing and certain settlement services to support Wilkes’ provision of wireless services to its customers, including customers which use our network through roaming agreements which Wilkes has with other major wireless carriers. Under the agreement, Wilkes purchases certain of our infrastructure equipment and provides installation of the equipment, and testing and integration of the equipment with Wilkes’ wireless cellular telephone system.

Reseller Agreement with Topp, Inc.

We have a March 31, 2003 reseller agreement with Topp, Inc. in which Topp, Inc. acts as our reseller and makes purchases from us allowing Topp, Inc. to market and sell access to and use of our PCS service.

Customer Master Agreement with Cerillion Technologies Limited

We have an April 13, 2003 agreement with Cerillion Technologies in which Cerillion agrees to supply us Cerillion’s software, third party products and software support services for resale by us and for the exclusive purpose of supply billing services to certain organizations. We are not permitted under the agreement to assign or subcontract any rights or obligations under the agreement or appoint any agent to perform such obligations, except as otherwise permitted under the agreement. The agreement may be terminated by written notice if either party fails to observe or perform any material term or condition of the agreement and such breach continued for 30 days. Additionally, we are not permitted to use, reproduce, sublicense or otherwise deal in the software or the source code of the software or reverse engineer decompile or disassemble the software. We are required to use Cerillion’s trademarks and trade names.

8

Master Purchase & License Agreement with Telos Technology

On October 22, 2003, we entered into a Master Purchase and License Agreement with Telos Technology (“Telos”) under which we purchased system infrastructure for a GSM network solution, including a wireless communications switch. Telos delivered the system in the first quarter of 2004, and we installed the system in the first quarter 2004. We also installed equipment necessary to provide network services to Wilkes under our agreement with Wilkes during the first quarter of 2004. During 2004, UT Starcom purchased Telos and merged Telos into its operations.

Stock Purchase Agreement with Tracy Broadcasting Corporation

We have a May 26, 2003 Stock Purchase Agreement with Tracy Broadcasting Corporation, which is solely owned by our former Chief Executive Officer, Michael Tracy. In this agreement, Tracy Broadcasting, which is identified as the “purchaser” agreed to purchase 10,042,500 shares of our restricted common stock for a total purchase price of $401,700. A total of 6,523,496 of these shares were issued to Tracy Broadcasting Corporation in October, 2004.

Agreements and Loan Conversions

During October 2003, we entered into a loan agreement with Nyssen LP (“Nyssen”) through TowerGate Finance Ltd. (“TowerGate”) under which we would be able to borrow up to $2 million in the form of convertible notes. As of December 31, 2003, we had borrowed an aggregate of $350,000 under this loan agreement pursuant to convertible demand notes. The notes do not bear interest unless they are in default, in which case interest accrues at the rate of 12% per annum. The notes have a conversion feature which allows for conversion into the Company’s common shares at $.04 per share. The Company challenged the loan agreement with Nyssen in the dispute described in Item 3 – Legal Proceedings. During the dispute, the Company suspended the conversion feature in the notes.

As of November 30, 2004, the Company entered into a settlement agreement with Nyssen, and reinstated the conversion rate. (See Item 3, Legal Proceedings.) The difference between the conversion price and the fair market value of the shares was charged to interest expense. As of November 30, 2004, we had borrowed an aggregate of $1,600,025 from Nyssen pursuant to the October 30, 2003, loan agreement and represented by the convertible demand notes. Pursuant to the settlement agreement, Nyssen agreed to convert the $1,600,025 in demand notes into our common shares at $.04 per share. Upon conversion, Nyssen will receive 40 million shares of our common stock. Under the settlement agreement, we agreed to issue TowerGate 20 million shares of common stock for non-cash compensation for financial services provided to the Company.

As provided for in the November 30, 2004, settlement agreement, Tower Gate and Nyssen, its management and associates will invest an additional $300,000 in the Company, as follows:

1. $100,000 at $.02 per share

2. $200,000 at $.10 per share.

As provided for in the November 30, 2004, Settlement Agreement, Becker Capital Management LLC, a related party, its management and associates will invest an additional $300,000 in the Company, as follows:

1. $200,000 at $.02 per share

2. $100,000 at $.10 per share.

9

On February 3, 2003, the Company issued a note in the principal amount of $30,000 and bearing interest at 10% per annum, payable to Becker Capital Management, LLC, a related party. The note required three installment payments of $10,000 each on March 3, 2003, April 3, 2003, and May 3, 2003. The note provided for a penalty that in the event a payment was not received within five (5) days of each due date, the Company would be declared in default, and the holder would be entitled to receive shares of stock in the Company at $.11 per share, priced for the outstanding principal balance including interest owed at the time of default. Additionally, for each thirty (30) days beyond the due date the Company is in default on the note, the holder would be entitled to additional shares computed at the rate of ½ of the initial conversion rate. In the November 30, 2004, settlement agreement, the Company agreed to convert this note, plus accrued interest of $4,757, into 36,175,000 shares of the Company’s common stock, at the par value of the common stock, or $.001 per share.

The Company acknowledges that all of the transactions contemplated in the November 30, 2004 settlement agreement, including the loan conversions of Nyssen, the shares issued to TowerGate, and the loan conversion of Becker Capital Management are subject to shareholder approval. The Company has not yet taken the appropriate action to seek shareholder approval but will do so at the earliest time practical. In April 2005, the Company made application with the FCC for approval of the share issuance to Nyssen and TowerGate and Becker Capital Management LLC described above. The application is currently pending with the FCC.

The Company has outstanding notes payable to affiliates in the principal amount of $492,000 at December 31, 2004. During the years ended December 31, 2004 and 2003, the affiliates advanced additional funds of $25,000 and $568,640 and the Company made repayments of the advances of $0 and $100,000. The debt is convertible into common shares of the Company at $.02 per share.

During May 2003, the Company, through corporate resolution, agreed to convert existing corporate indebtedness of major shareholders and investors in the company into equity through an approved corporate exchange of non-issued common shares for notes and accrued interest aggregating $4,107,297. The conversion of debt to equity by those participating note holders would include the issuance of preferred and common shares of the Company. The Corporation’s Amended Articles of Incorporation (“Articles”) authorizes the Corporation to issue up to 5,000,000 Preferred Shares, with a par value of $.001 (“Preferred Shares”) in one or more series at such price and in such number as authorized by the Board of Directors. The Articles also authorize the Board to prescribe the number, voting powers, designations, preferences, limitations, restrictions and relative rights of each series of Preferred Shares. Accordingly, the Board of Directors designated 250,000 Preferred Shares as Series D Preferred Shares. In September 2004 a major shareholder received 6,523,496 shares of common stock for $260,940 of this debt conversion and the other persons and entities who had initially agreed to accept preferred shares agreed to accept common shares in lieu of the preferred shares.

During May 2003 in conjunction with the conversion of the notes and accrued interest the note holders forgave the issuance of an aggregate of 10,594,539 shares of common stock with an aggregate value of $3,233,978.

The Company has obligations to issue common shares at December 31, 2004, pursuant to the conversions of various loans and accrued interest as follows:

	Shares	Amount
Loan incentive shares	6,055,762	$     719,947
Conversion of debt	40,000,000	6,000,000
Conversion of related
party debt	64,948,445	9,272,607
	110,004,207	$15,992,554

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Exchange Agreements

In 2003 we entered into exchange and conversion agreements with Hartford Holdings, Ionian Investments, Ltd., Ardara Investments, Ltd., WYSE Investments, Ltd., Michael L. Glaser, Becker Capital Management and Michael Tracy, all of which provide for the following:

o The surrender of all certificates held by each of the entities representing 80% of the total amount of shares of common stock held;

o In exchange for the surrender of the certificates, we shall exchange without further cost shares of our preferred stock at a ratio of 200 shares of common for each share of preferred;

o Preferred shares will not be issued in fractional increments, therefore any fractional numbers of shares will be added to the number of common shares which will be issued as replacement shares for the shares surrendered.

Each entity has the option, on written notice to us, to have us register a number of shares set out in each of the separate agreements. Effective December 31, 2004, the Company and the major shareholders cancelled the exchange agreements.

Office Lease Agreements

Our office lease agreements are summarized below under Item 2, Description of Properties.

ITEM 2. DESCRIPTION OF PROPERTIES

Nebraska Office Space:

Our wholly owned subsidiary, Tracy Corporation II, leases 5,168 square feet of office space at our executive offices, 1225 Sage Street in Gering, Nebraska from our former Chief Executive Officer, Michael Tracy, for a monthly lease payment of $2,500. This space is adequate for our needs. This lease expires on October 31, 2007.

Atlanta Office Space:

We had an Office Services Agreement with the Centre for Premier Suites and Business Services, Inc. for 800 square feet of office space at our Atlanta, Georgia office located at 300 Village Green Circle, Suite 201, Smyrna, GA 3008. This agreement was effective as of November 10, 2003 and terminated on May 31, 2004. The monthly payment was $1,895. This space is adequate for our needs. We did not renew the lease and operated from May 31, 2004 through October, 2004 on a month to month basis.

Towers:

We own tower sites in the following locations:

o Guernsey, Wyoming

o Wheatland, Wyoming

o Torrington, Wyoming

o Henry, Nebraska

o Gering, Nebraska

o Bushnell, Nebraska

o Kimball, Nebraska

o Sidney, Nebraska

o Oshkosh, Nebraska

o Minatare, Nebraska

o Ogallala, Nebraska

o Alliance, Nebraska

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We rent tower sites in the following locations:

o Douglas, Wyoming

o Mitchell, Nebraska

o Scottsbluff, Nebraska

o Chadron, Nebraska

o Dix, Nebraska

o Sterling, Colorado

The leases and rental agreements pertaining to these tower sites are generally a five year term. Rental charges are based on a monthly rate calculated by the number of feet of tower space between the antenna location on the tower and the ground multiplied by a per foot rate, plus a monthly charge for equipment space within the building at the base of the tower site used to house equipment.

ITEM 3. LEGAL PROCEEDINGS

On September 10, 2004, we filed a Complaint in the United States District Court in the Southern District of New York against Michael J. Tracy (“Tracy”), Michael L. Glaser (“Glaser”), and William W. Becker (“Becker”), in case number 04CV7255. The Complaint sought an award for compensatory damages and an injunction against Tracy, Glaser and Becker for breach of fiduciary duty, costs and expenses for litigation, including reasonable attorneys’ fees, expert fees, and other disbursements, and against Tracy for conversion, and awarding us, as plaintiff, such other and further relief as may be deemed just and proper.

On September 16, 2004, we filed a complaint in the United States District Court for the District of Nebraska, in case number 7:04CV5020, against TowerGate and Nyssen. The Complaint alleged fraudulent misrepresentation against TowerGate, fraudulent concealment against Nyssen, breach of fiduciary duty against TowerGate, civil conspiracy against TowerGate and Nyssen, breach of contract against TowerGate, and breach of the covenant of good faith and fair dealing against TowerGate. The Complaint sought preliminary and permanent injunction, declaratory judgment and an accounting. The Complaint also requested a jury trial.

On December 10, 2004, we, Tracy, Glaser and Becker and our other majority shareholders, and TowerGate and Nyssen entered into a binding agreement dated as of November 30, 2004, in which the parties agreed to dismiss the above-described lawsuits, and settle the dispute between the Company and TowerGate and Nyssen, and the Company and Becker, Glaser and Tracy.

The settlement agreement provides that the parties agree to put in place an interim board of directors consisting of William Becker as Chairman and interim Chief Executive Officer, Larry L. Becker, son of William Becker, and one of our substantial shareholders through Becker Capital Management, LLC, Piers Linney, CEO of TowerGate, and Matthew Hudson, who controls Nyssen, or his designee. In addition, the settlement agreement states that William Becker and Larry Becker and the entities which are affiliated (“the “Becker Entities”) with them and TowerGate/Nyssen have the right to appoint two directors, so long as either group individually, respectively, holds in excess of 25% of our common stock. Moreover, the agreement states that the Becker Entities and TowerGate/Nyssen shall be entitled, respectively, to appoint one director for as long as they hold in excess of 50% of our common stock and up to 25% of our common stock. Mr. William W. Becker is a Canadian citizen. Mr. Larry L. Becker is also a Canadian citizen. Messrs. Linney and Hudson are British subjects. TowerGate and Nyssen are formed under the laws of the United Kingdom.

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The settlement agreement also provides that our majority shareholders and Glaser, together with the Becker Entities and TowerGate/Nyssen would vote all shares held by them to ensure that the Becker directors are always appointed in accordance with the agreement. Additionally, the agreement states that other directors will be appointed to the Board in due course and good faith on the basis that their appointment is in our best interest and in the best interest of our shareholders.

The agreement further provides that we will increase our authorized number of common voting shares of the company to 500,000,000, and that our majority shareholders agree to take all actions necessary and in accordance with applicable laws, statutes, rules and regulations to facilitate the increase in the issuance of our share capital.

Under the agreement we agreed to issue a new promissory note to Mr. Tracy or his affiliate for a loan he made to us of $467,000. The note will be due and payable in 24 months from December 31, 2004, and will bear simple interest at 10% per annum from December 31, 2004, until maturity. At maturity, Mr. Tracy or his affiliate may convert this note at his option into our common voting stock at $.02 per share.

The agreement also provides that since the Company requires immediate access to new financing to continue operations, Mr. William W. Becker and his affiliates (the “Becker Entities”) will invest $200,000 into the Company at $.02 per share, for 10,000,000 newly-issued common shares, and $100,000 into the Company for 1,000,000 newly-issued common shares, and Nyssen will invest $100,000 into the Company stock at $0.02 per share for 200,000,000 newly-issued common shares and $100,000 into the Company stock at $.10 per share for 1,000,000 newly-issued common shares. The parties agreed that future financing provided by the Becker Entities and Nyssen would be accomplished at $.10 per share of our common stock. Becker Capital Management, LLC has loaned the Company $300,000, pursuant to convertible promissory notes, in order to provide the Company with interim financing until we implement the settlement agreement. Mr. William Becker does not own any interest in Becker Capital Management, LLC. Nyssen has also loaned the Company $300,000, pursuant to convertible promissory notes in order to provide the Company with interim financing until we implement the settlement agreement.

The agreement further provides that we will establish a stock option plan with ten percent (10%) of our fully diluted share capital to incentivize the performance of our existing and new management.

The settlement agreement provides that Delaware law shall apply. Delaware law requires approval of our shareholders to increase our authorized capital. Moreover, Delaware law will require shareholder approval of a stock option plan to incentivize the performance of our existing and new management. The Company is attempting to comply with all of the requirements of Delaware law and the SEC requirements, but there can be no assurance that it will be able to do so. In addition, FCC approval is required for certain of the share issuances and if this approval is not obtained by the Company there may be material negative impact on the Company’s financial position and results of operation.

Although the parties agreed to implement the agreement as soon as practical, the parties have only taken three actions to do so as of the date of this report. First, the Company dismissed its Complaint against Messrs Tracy, Becker and Glaser on December 15, 2004, dismissed its Complaint against TowerGate/Nyssen on December 20, 2004. Second, we filed an application with the FCC for approval of the stock conversion by Nyssen and TowerGate, and by Larry L. Becker. The application included a copy of the November 30, 2004, settlement agreement. Finally, we issued Tracy Broadcasting Corporation a promissory note for $467,000 for the $467,000 loan made to us. As provided in eh settlement agreement, the note is due and payable on December 31, 2006, at maturity. Tracy Broadcasting Corporation may convert this loan at its option into our common stock at $.02 per share. The Company filed a Form 8-K on December 21, 2004, related to this litigation, in which the Company described the terms of the settlement agreement.

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All parties to the settlement agreement are either beneficial owners of the Company’s common stock, current or proposed members of the Company’s management, and/or parties or affiliates of parties involved in litigation that gave rise to the settlement agreement.

In the settlement agreement, the parties agreed to undertake the following actions:

Elect a new Board of Directors;

Increase in the Company's authorized share capital;

Effect a material share issuance to the Becker Entities, Larry L. Becker and Nyssen;

Effect material share issuances to Nyssen and TowerGate; and

Establish a stock option plan to incentivize the performance of the Company’s existing and new management.

If the Company and the parties implement the settlement agreement without complying with Delaware law, including obtaining shareholder approval and without FCC approval, the Company will be subject to the following unasserted claims, all of which would expose the Company to potential shareholder lawsuits and/or federal and state regulatory action:

Violation of Delaware law and our corporate bylaws. 8 Delaware Corp. Code 144 states:

“Interested Director, Quorum”

     A.    no contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association, or other organizations in which one or more of its directors or officers, or directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee which authorizes the contract or transaction, or solely because any such director’s or officer’s votes are counted for such purpose, if:

          1.    The material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee, in good faith, authorizes the contract or transaction by the affirmed votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

          2.    The material facts as to the director’s or officer’s relationship or interest, and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a vote of the shareholders; or

          3.    The contract or transaction is fair to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee, or the shareholders.

     B.    Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes a contract or transaction.

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If the Company fails to comply with the requirements of 8 Delaware Corp. Code §144 in effecting the material transactions contemplated by the settlement agreement, the Company will be subject to potential shareholder action. Additionally, under this section of the Delaware code, the settlement agreement could potentially be voided if the settlement agreement is not fair to the Company. The shareholders may consider an increase in the Company’s authorized common stock to allow the Company may implement the provisions of the settlement agreement, including issuance of shares to the Becker Entities, Larry L. Becker, Nyssen and TowerGate, which includes members of management, beneficial owners or affiliates, and also the adoption of a stock option plan for the benefit of management unfair to the Company and its shareholders who are not parties to the settlement agreement.

Moreover, the issuance of the shares to the Company’s management and beneficial owners described above, and as provided for in the settlement agreement, may be set aside under Delaware law if the Company fails to comply with the foregoing section of the Delaware corporate code.

Furthermore, the Company has a class of its securities registered pursuant to the Securities and Exchange Act of 1934 (the “1934 Act”). Accordingly, the Company must comply with Section 14 of the 1934 Act and its disclosure requirements in connection with the implementation of the settlement agreement. Therefore, the Company is required to file with the SEC either a proxy on Schedule 14-A, or an information statement to Schedule 14-C, before it can implement the settlement agreement. The Company intends to file a proxy statement with the SEC in compliance with the 1934 Act and, upon approval, issue a proxy to its shareholders requesting a vote on the material transactions contemplated by the settlement agreement. The Company will exclude from such voting those shareholders who are determined under Delaware law not to be qualified to vote because they will derive a direct benefit from the transactions contemplated in the settlement agreement.

The Company has been delinquent in filing its reports on Form 10-QSB and Form 10-KSB for the calendar year ending December 31, 2004, and is delinquent in filing reports on Form 10-QSB for the first, second and third quarters during the calendar year 2005.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the year ended December 31, 2004.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Below is the market information pertaining to the range of the high and low bid information of our common stock for each quarter since our common stock has been quoted on the OTC Bulletin Board or the National Quotation Bureau’s Pink Sheets. From April 2003 to present, our common stock has been quoted under the symbol TLXT on the National Quotation Bureau’s Pink Sheets. From April 1999 to April 2003, our common stock was quoted on the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

2004	Low		High
Fourth Quarter		.06		.38
Third Quarter		.10		.15
Second Quarter		.10		.44
First Quarter		.30		.50
2003	Low		High
Fourth Quarter		.06		.50
Third Quarter		.06		.14
Second Quarter		.08		.16
First Quarter		.06		.14

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The source of the above information is msn.com.

There is a limited trading market for our common stock. There is no assurance that a regular trading market for our common stock will develop, or if developed will be sustained. A shareholder in all likelihood, therefore, will not be able to resell their securities should he or she desire to do so when eligible for public resale. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops

Reports and Other Information to Shareholders

We are subject to the informational requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and other reports and information with the Securities and Exchange Commission. You may read and copy these reports and other information we file at the Securities and Exchange Commission’s public reference rooms in Washington, D.C. Our filings are also available to the public from commercial document retrieval services and the Internet world wide website maintained by the Securities and Exchange Commission at www.sec.gov.

Holders

As of September 30, 2005, we had 248 holders of record of our common stock. We have one class of stock outstanding. We have no shares of our preferred stock outstanding. As of September 30, 2005, there were 6,905,198 shares of our stock held by non-affiliates and 19,094,484 shares of our stock held by affiliates.

Options.

We have 450,000 options outstanding to purchase 450,000 shares of our common stock.

Warrants

We do not have any outstanding warrants of our common stock.

Penny Stock Considerations.

Our shares are “penny stocks” as generally defined in the Securities Exchange Act of 1934 as equity securities with a price of less than $5.00. Our shares may be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or “accredited investor” must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:

o Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

o Disclose commissions payable to the broker-dealer and its registered representatives and current bid and offer quotations for the securities;

o Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and

o Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.

Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our stock, which may affect the ability of shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities if our securities become publicly traded. In addition, the liquidity for our securities may be adversely affected, with a corresponding decrease in the price of our securities. Our shares may someday be subject to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.

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Dividends.

We have not declared any cash dividends on our stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payment of dividends will depend on our earnings and financial position and such other factors as the Board of Directors deems relevant.

Securities Authorized for Issuance under Equity Compensation Plans.

Not applicable.

Recent Sales of Unregistered Securities.

The Company issued 6,523,496 shares of our common stock to Tracy Broadcasting Corporation pursuant to the Stock Purchase Agreement between the Company and Tracy Broadcasting Corporation dated May 26, 2003.

Use of Proceeds from Registered Securities.

Not applicable

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion should be read in conjunction with our financial statements and related notes appearing elsewhere in this Form 10-KSB and our Annual Report on Form 10-KSB for our fiscal year ended December 31, 2004. The terms “the Company,” “we,” “our” or “us” refer to Telemetrix Inc. This discussion contains forward-looking statements based on our current expectations, assumptions, and estimates. The words or phrases “believe,” “expect,” “may,” “anticipates” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties pertaining to our business, including: (a) our limited operating history and our history of losses make it difficult for you to evaluate our current and future business and our future financial results; (b) if we are unable to obtain additional financing, we will be unable to proceed with our operating plan; (c) even if we obtain additional debt or equity financing, the value of our common stock will be diluted; (d) we have negative cash flow from operations and an accumulated deficit that raises substantial doubt about our ability to continue as a going concern; (d) we are subject to substantial debt obligations of approximately $5 million, which may negatively affect our ability to grow; (e) whether we will keep pace with the rapid development of technology in the wireless communications services area; (f) whether our existing technology will become obsolete or too expensive to upgrade; (g) the wireless communications services area generally experiences a high rate of “churn” representing the rate of lost customers, and there is no assurance that we will not experience churn due to competitive forces and price competition; (h) should our business be subject to increasing government regulation, we will be subject to increasing costs; and (i) we are dependent upon third party providers, including roaming partners and wireless network companies through which we obtain our interconnections throughout North America and also international markets; should we lose the services of these third party providers, our operations may negatively affected, including interruptions in our service.

Statements are made as of the filing of this Form 10-KSB with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

OVERVIEW

Up until August 2002, our revenues were primarily generated from one way wireless communication (paging services) related income. Beginning in September 2002, we ceased research and development on telemetry related hardware products; instead, we began focusing on providing Global Systems for Mobile communications (GSM) network access for telemetry devices from third party providers actually providing access to the nationwide GSM network for short message service customers that use data and SMS to communicate with and control their telemetry and telematic hardware devices. At that time, we began conducting business in telemetry services, which consisted of SMS, including actual text messages transmitted to and from wireless modems, the sale of and service for subscriber identity module (SIM) cards, a cost per short message (SMS), and an activation fee for subscriber/customers.

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Capital Expenditures and Requirements

During 2004, we made two significant capital expenditures of approximately $860,000 for a Mobile Switching Center (MSC) and GPRS Equipment. If we obtain adequate funding, we expect to make the following significant capital expenditures during 2005: (a) $300,000 for additional switching equipment; (b) $150,000 for a short message service center; and (c) $75,000 for infrastructure hardware and software to support our billing system.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts. The estimates and assumptions are evaluated on an on-going basis and are based on historical experience and on various other factors that are believed to be reasonable. Estimates and assumptions include, but are not limited to, fixed asset lives, intangible assets, income taxes, and contingencies. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements. Our accounting for revenue recognition and stock compensation, which requires us to estimate the value of the shares issued, and the value of intangible assets requires us to continually assess whether such assets are impaired. Our critical accounting policies are outlined in our audited financial statements contained in our Form 10-KSB for the year ended December 31, 2004.

During our Fiscal Year 2004 period, our revenues were derived from the following:

o $347,969 from our telemetry related services

o $70,170 from our pager related services

o $221,140 from our network services

o $15,409 from tower rental

Our revenues are dependent upon the following factors:

o Our ability to secure additional agreements for customers using our network for nationwide network access for SMS and data

o Our ability to secure additional agreements for network roaming services

o Ourability to hire and maintain contract engineers that will be able to install and maintain and support the equipment and software necessary for both our division services

o Demand for our services

o Individual economic conditions in our markets

o Our ability to market our services

Years Ended December 31, 2004 and 2003

Consolidated Statement of Operations

Revenues. Revenues for the year ended December 31, 2004 increased 71% to $654,688 from $381,967 for the same period in 2003. The increase in our Revenues is primarily attributable to having Network Services of $221,140 for the year ended December 31, 2004 compared to $0 for the comparable 2003 period, representing an increase of 100%. The increase in our telemetry related message revenue to $347,969 for the year ended December 31, 2004 compared to $251,149 for the year ended December 31, 2003, representing an increase of $96,820 or 39%. Tower Rent Income of $15,409 in 2004 increased $3,757 from $11,652 in 2003. In contrast, our pager related revenues decreased by $48,996 or 41% to $70,170 during the year ended December 31, 2004 compared to $119,166 for the comparable 2003 period. We believe that during the year 2005 pager related revenues will continue to decline since the North American pager market has declined due to the increasing usage of other wireless technology. We will attempt to expand our revenues by marketing our network data access and generating associated revenues and through our wireless network services.  

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Cost of Revenues. Cost of revenues currently consists primarily of pager equipment, equipment repairs, software, additional phone circuits, and processing charges, long distance charges, network technicians and base equipment. Cost of revenues increased from $179,524 to $328,947 for the year ended December 31, 2004, representing a 83% increase which represents 50% and 47% of the total revenues for the year ended December 31, 2004 and December 31, 2003, respectively. The increase in the cost of revenue is attributable to high cost services related to our other revenue category which consists of service agreements with other cellular carriers. There were no such costs associated with the comparable 2003 period.

Non-Cash Stock Compensation Expense. Non-Cash Stock Compensation had a $1,288,325 or 75% increase from $1,711,675 during fiscal year 2003 to $3,000,000 during fiscal year 2004. This increase is attributable to the funding agreement described in Funding Agreements and Loan Conversions.

Selling, General and Administrative Expenses. Selling, General and Administrative expenses increased $481,920 to $1,103,945 for the year ended December 31, 2004 from $622,025 for the year ended December 31, 2003. The increase in our Selling, General and Administrative Expenses is mainly attributable to increased staffing in the Atlanta office until September 2004.

Interest Expense. Interest expense decreased by $129,803 or 37% to $216,373 for the year ended December 31, 2004 from $346,176 for the year ended December 31, 2003. This decrease is primarily due to the conversion of affiliate notes to stock in 2003. Non cash interest expense increased from $646,174 in 2003 to $9,912,419 in 2004 as a result of the conversion of debt into common shares at prices less that the fair market value.

Impairment of Assets. Impairment of Assets decreased to $0 from $103,000 for the year ended December 31, 2004 and December 31, 2003. The 2003 impairment losses related to the obsolescence of equipment in 2003.

Net Loss. Net Loss for the year ended December 31, 2004 increased by $10,764,091 to ($13,716,022) as compared to ($2,951,931) for the year ended December 31, 2003.

Net Loss Per Share. The net loss per share of common stock for the year ended December 31, 2004 was ($0.70) and ($0.16) for the year ended December 31, 2003.

Liquidity and Capital Resources December 31 2004.

Cash as of December 31, 2004 amounted to $11,646 as compared with $34,811 for the year ended December 31, 2003, a decrease of $23,165 or 67%.

Net cash used in investing activities increased $652,650 from ($106,250) in 2003 to ($758,900) in 2004 primarily from the purchase of property and equipment

Net cash provided by financing activities increased $366,499 from $719,038 in 2003 to $1,085,537 in 2004 primarily from the proceeds from convertible debt.

We plan to change the method of financing our operations from incurring debt to be used against future conversion to equity to funding the current commitments for capital expenditures mainly from equity sources and operations. We do not have material commitments for capital expenditures for the current year. We will continue to finance our operations mainly from loans from major shareholders and fundraising activities. We do not believe that our future cash flow from operations together with our current cash will be sufficient to finance our activities through the year 2005; therefore, we plan to raise money through a private placement to fund the implementation of an expanding operational plan.

We cannot continue to satisfy our current cash requirements for a period of twelve (12) months through our existing capital. We anticipate total estimated operating expenditures of approximately $960,000 (or $80,000 per month) over the next twelve (12) months, in the following areas:

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o Salaries and labor = $285,000

o Network operating costs = $300,000

o Network infrastructure = $85,000

o General and Administrative (exclusive of salaries) = $290,000

Our current cash of $5,000 as of November 1, 2005 will satisfy our cash requirements for only approximately two days.

Accordingly, we will be unable to fund our expenses through our existing assets or cash unless we obtain adequate financing through traditional bank financing or a debt or equity offering; however, because we have limited revenues and a poor financial condition, we may be unsuccessful in obtaining such financing or the amount of the financing may be minimal and therefore inadequate to implement our business plans. In the event that we do not receive financing or our financing is inadequate, we may have to liquidate our business and undertake any or all of the following actions:

o Significantly reduce, eliminate or curtail our business to reduce operating costs;

o Sell, assign or otherwise dispose of our assets, if any, to raise cash or to settle claims by creditors;

o Pay our liabilities in order of priority, if we have available cash to pay such liabilities;

o If any cash remains after we satisfy amounts due to our creditors, distribute any remaining cash to our shareholders in an amount equal to the net market value of our net assets;

o File a Certificate of Dissolution with the State of Delaware to dissolve our corporation and close our business;

o Make the appropriate filings with the Securities and Exchange Commission so that we will no longer be required to file periodic and other required reports with the Securities and Exchange Commission, if, in fact, we are a reporting company at that time.

Based upon our current assets, however, we will not have the ability to distribute any cash to our shareholders.

If we are unable to satisfy our obligations and we qualify for protection under the U.S. Bankruptcy Code, we may voluntarily file for reorganization under Chapter 11 or liquidation under Chapter 7. Our creditors may also file a Chapter 7 or Chapter 11 bankruptcy action against us. If our creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will take priority over our shareholders. If we fail to file for bankruptcy under Chapter 7 or Chapter 11 and we have creditors; such creditors may institute proceedings against us seeking forfeiture of our assets, if any.

We do not know and cannot determine which, if any, of these actions we will be forced to take. If any of these foregoing events occur, our shareholders could lose their entire investment in our shares.

To date, we have funded our activities principally from loans from related parties and third parties.

Going Concern

The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has experienced a significant loss from operations as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the year ended December 31, 2004, the Company incurred a net loss of $13,716,022 and has a working capital deficit of $4,070,114 and a stockholders’ deficit of $23,426,934 at December 31, 2004.

The Company’s ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

20

The Company is pursuing equity and debt financing for its operations and is seeking to expand its operations. Failure to secure such financing may result in the Company depleting its available funds and not being able pay its obligations.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Contractual Obligations And Commercial Commitments

We have no contractual obligations, including lease obligations, apart from agreements in the normal course of our business.

Recent Pronouncements

In December 2003, the Financial Accounting Standards Board issued FASB Interpretation Number 46-R “Consolidation of Variable Interest Entities.” FIN 46-R, which modifies certain provisions and effective dates of FIN 46, sets for the criteria to be used in determining whether an investment is a variable interest entity should be consolidated. These provisions are based on the general premise that if a company controls another entity through interests other than voting interests, that company should consolidate the controlled entity. The Company currently has no entities which require the application of FIN 46-R.

In November 2004, the FASB issued SFAS 151, “Inventory Costs.” SFAS 151 amends the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) under the guidance in ARB 43, Chapter 4, “Inventory Pricing.” Paragraph 5 of ARB 43, Chapter 4, previously stated that “…under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges….” This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not expect adoption of SFAS 151 to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS 153, “Exchanges of Nonmonetary Assets,” an amendment to Opinion No. 29, “Accounting for Nonmonetary Transactions.” Statement 153 eliminates certain differences in the guidance in Opinion No. 29 as compared to the guidance contained in standards issued by the International Accounting Standards Board. The amendment to Opinion No. 29 eliminates the fair value exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in periods beginning after December 16, 2004. Management does not expect adoption of SFAS 153 to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS 123(R), “Share-Based Payment.” SFAS 123(R) amends SFAS 123, “Accounting for Stock-Based Compensation,” and APB Opinion 25, “Accounting for Stock Issued to Employees.” SFAS 123(R) requires that the cost of share-based payment transactions (including those with employees and non-employees) be recognized in the financial statements. SFAS 123(R) applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity’s shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity’s shares or other equity instruments. This statement is effective (1) for public companies qualifying as SEC small business issuers, as of the first fiscal year beginning after December 15, 2005, or (2) for all other public companies, as of the first fiscal year or interim period beginning after June 15, 2005, or (3) for all nonpublic entities, as of the first fiscal year beginning after December 15, 2005. Management is currently assessing the effect of SFAS No. 123(R) on the Company’s financial statements.

21

ITEM 7. FINANCIAL STATEMENTS.

TELEMETRIX, INC.

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2004

C O N T E N T S

Reports of Independent Auditors	F-1
Financial Statements:
Balance Sheet	F-2
Statements of Operations	F-3
Statement of Stockholders’ (Deficit)	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6

22

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors
Telemetrix, Inc.

We have audited the accompanying consolidated balance sheet of Telemetrix, Inc. as of December 31, 2004, and the related consolidated statements of operations, stockholders’ (deficit) and cash flows for the years ended December 31, 2004 and 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Telemetrix, Inc. as of December 31, 2004, and results of its operations and its cash flows for the years ended December 31, 2004 and 2003, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered a loss from operations and has working capital and stockholders’ deficits. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Stark Winter Schenkein & Co., LLP

Denver, Colorado
October 21, 2005, except for Note 11,
  as to which the date is December 21, 2005

F-1

Telemetrix, Inc.
Consolidated Balance Sheet
December 31, 2004

Assets
Current assets:
Cash	$        11,646
Accounts receivable	35,961
Other current assets	933
Total current assets	48,540
Property and equipment, net	789,530
Other assets:
Licenses	166,137
Receivable from affiliates	12,751
	178,888
	$   1,016,958
Liabilities and stockholders’ (deficit)
Current liabilities:
Accounts payable	$   1,988,626
Accrued expenses	746,349
Accounts payable and accrued expenses - affiliates	55,515
Convertible debentures	1,200,000
Notes payable - affiliates	25,000
Current portion of long-term debt	103,164
Total current liabilities	4,118,654
Long-term debt	437,684
Unissuable common stock - 138,083,686 shares	19,887,554
Stockholders’ (deficit):
Preferred stock, $.001 par value, 5,000,000 shares authorized
no shares issued or outstanding
Preferred stock, series D, $.001 par value, Convertible,
liquidation preferences $30 per share, 250,000 authorized
none issued or outstanding	--
Common stock, $.001 par value,
25,000,000 shares authorized,
24,999,682 shares issued and outstanding	25,000
Paid in capital	52,165,737
Accumulated (deficit)	(75,617,671	)
	(23,426,934	)
	$   1,016,958

See the accompanying notes to the consolidated financial statements.

F-2

Telemetrix, Inc.
Consolidated Statements of Operations
Years Ended December 31, 2004 and 2003

	2004		2003
Revenue:
Pager	$        70,170		$      119,166
Network services	221,140		--
Other	363,378		262,801
	654,688		381,967
Cost of revenue	328,947		179,524
Gross margin	325,741		202,443
Operating expenses:
General and administrative - non-cash stock compensation	3,000,000		1,711,675
Selling, general and administrative expenses	1,103,945		622,025
	4,103,945		2,333,700
(Loss) from operations	(3,778,204	)	(2,131,257	)
Other (income) expense:
Other (income) expense	780		(5,456	)
(Loss) on abandonment of assets	--		103,000
Gain on the settlement of debt	--		(269,220	)
Gain on the abandonment of foreign operation	(191,754	)	--
Interest expense - non-cash	9,912,419		646,174
Interest expense	216,373		346,176
	9,937,818		820,674
Net (loss)	$(13,716,022	)	$(2,951,931	)
Per share information - basic and fully diluted:
Weighted average shares outstanding	19,556,414		18,476,176
Net (loss) per share	$         (0.70	)	$         (0.16	)

See the accompanying notes to the consolidated financial statements.

F-3

Telemetrix, Inc.
Consolidated Statement of Stockholders’ (Deficit)
Years Ended December 31, 2004 and 2003

	Common Stock		Additional Paid in		Unissuable Common		Deferred		Currency      Translation		Accumulated
	Shares	Amount		Capital		Stock		Compensation		Adjustment		(Deficit)		Total
Balance at December 31, 2002	18,476,186	$18,477		$46,808,483		$   3,783,425		$(283,625	)	$ 191,754		$(58,949,718	)	$(8,431,204	)
Deferred compensation expensed	--	--		--		--		283,625		--		--		283,625
Subscribed common shares
forgiven	--	--		3,233,978		(3,233,978	)	--		--		--		--
Subscribed common shares
for loan incentives	--	--		--		458,500		(95,951	)	--		--		362,549
Discount on common shares	--	--		1,104,675		--		--		--		--		1,104,675
Common shares subscribed
for services	--	--		--		607,000		--		--		--		607,000
Subscribed common shares
for loan conversions	--	--		--		4,107,297		--		--		--		4,107,297
Net (loss) for the year	--	--		--		--		--		--		(2,951,931	)	(2,951,931	)
Balance at December 31, 2003	18,476,186	18,477		51,147,136		5,722,244		(95,951	)	191,754		(61,901,649	)	(4,917,989	)
Common shares issued
for loan conversions	6,523,496	6,523		254,417		(260,940	)	--		--		--		--
Contribution of related party loan	--	--		272,184		--		--		--		--		272,184
Beneficial conversion feature
of related party loans	--	--		492,000		--		--		--		--		492,000
Common shares subscribed	--
for services	--	--		--		3,000,000		--		--		--		3,000,000
Common shares subscribed for
for loan conversions and interest	--	--		--		11,426,250		--		--		--		11,426,250
Deferred compensation charged
to interest expense	--	--		--		--		95,951		--		--		95,951
Write off of currency translation
adjustment related to an
abandoned subsidiary	--	--		--		--		--		(191,754	)	--		(191,754	)
Net (loss) for the year	--	--		--		--		--		--		(13,716,022	)	(13,716,022	)
Balance at December 31, 2004	24,999,682	$25,000		$52,165,737		$ 19,887,554		$          --		$          --		$(75,617,671	)	$(3,539,380	)

See the accompanying notes to the consolidated financial statements.

F-4

Telemetrix, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2004 and 2003

	2004		2003
Cash flows from operating activities:
Net (loss)	$(13,716,022	)	$(2,951,931	)
Adjustments to reconcile net (loss) to net cash (used in)
operating activities:
Depreciation and amortization	167,031		174,753
Impairment of goodwill and other assets	--		103,000
Gain on the settlement of debt	--		(269,220	)
Common stock subscriptions for services and other non-cash items
net of amount of deferred compensation	3,000,000		1,711,675
Common stock subscriptions for interest	9,912,419		646,174
Gain on the abandonment of foreign subsidiary	(191,754	)	--
(Increase) decrease in accounts receivable	22,271		(7,378	)
(Decrease) in other current assets	(933	)	(75	)
Increase (decrease) in accounts payable	412,494		(280,107	)
Increase in accrued expenses	231,242		51,244
Increase (decrease) in customer deposits	(100,000	)	100,000
Increase (decrease) in accounts payable and accrued expenses - affiliates	(86,550	)	143,888
Total of adjustments	13,366,220		2,373,954
Net cash (used in) operating activities	(349,802	)	(577,977	)
Cash flows from investing activities:
Deposits on equipment	--		(101,000	)
Purchase of property and equipment	(758,900	)	(5,250	)
Net cash (used in) investing activities	(758,900	)	(106,250	)
Cash flows from financing activities:
Advances from affiliates	25,000		568,640
Repayment of affiliate advances	--		(100,000	)
Proceeds from convertible debt	1,250,000		350,000
Payments on long-term debt and notes	(189,463	)	(99,602	)
Net cash provided by financing activities	1,085,537		719,038
Net increase (decrease) in cash	(23,165	)	34,811
Beginning - cash balance	34,811		--
Ending - cash balance	$        11,646		$      34,811
Supplemental cash flow information:
Cash paid for income taxes	$                --		$              --
Cash paid for interest	$                --		$      37,834
Non cash investing and financing activities:
Conversion of related party notes and interest to stock subscriptions	$        34,757		$ 4,107,297
Conversion of related party notes to common stock	$      260,940		$              --
Forgiveness of related party stock subscriptions	$                --		$ 3,233,978
Equipment deposits transferred to Property and equipment	$      101,000		$              --
Conversion of notes payable to common stock	$   1,600,025		$              --

See the accompanying notes to the consolidated financial statements.

F-5

Telemetrix, Inc.
Notes to Consolidated Financial Statements
Years Ended December 31, 2004 and 2003

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Telemetrix Inc. (the “Company”) was formed through a series of corporate combinations. On January 2, 1999, Telemetrix Resource Group Inc., a Colorado Corporation (“TRG, Inc.”), acquired Telemetrix Resource Group Limited (TRG Ltd.), a Nova Scotia corporation from Hartford Holdings Ltd., TRG Ltd.‘s sole shareholder, pursuant to a share exchange and plan of reorganization. On March 22, 1999, Arnox Corporation (an inactive public corporation), TRG Inc. and Tracy Corporation II d/b/a Western Total Communication (“WTC”) executed a Plan of Reorganization, which contemplated a share exchange and reorganization transaction (the “Combination”). On April 5, 1999, the first phase of the combination occurred, whereby Arnox acquired 100% of the issued and outstanding common shares of TRG Inc. in exchange for 6,127,200 shares of Arnox’s common stock. Arnox’s historical financial statements become those of TRG Ltd., as TRG Ltd.‘s operations were the ongoing operations of the combined companies. All of the transactions comprising the Combination, with the exception of WTC, have been accounted for as reverse acquisitions and no goodwill has been recorded. On September 22, 1999, the final phase of the combination closed, whereby, the Company acquired 100% of the issued and outstanding common shares of WTC in exchange for 5,372,800 shares of Arnox’s common stock. Through these combinations, the stockholders of WTC and TRG, Inc. acquired a total of 11,500,000 shares of Arnox common stock (approximately 90%) and therefore acquired control of Arnox. After the Combination, the companies changed their names to reflect their complementary businesses:

Arnox became Telemetrix, Inc.
TRG Ltd. Became Telemetrix Solutions, Inc.
WTC became Telemetrix Technologies, Inc.

The Company offers wireless paging service, personal communications services (“PCS”) service, PCS nationwide network access and services and technology to telecommunications carriers and other businesses.

Network access involves providing a source and means for telemetry and telematic companies and customers to use the nation wide PCS networks of major carriers for the transmission of data and messages which are necessary in the conduct of their business. Telemetrix provides the service as a “data only” offering through the roaming agreements which it has with other PCS carriers and operators in North America, including Mexico and Canada.

PCS carriers use the Company’s technology to provide network services for their wireless customers. Telemetrix has the ability to use its infrastructure equipment located in Gering, Nebraska to provide switching and billing services for smaller carriers that would otherwise be unable to have access to these services.

Consolidation

The financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

F-6

Reclassifications

Certain items presented in the previous year’s financial statements have been reclassified to conform to current year presentation.

Revenue Recognition

The Company recognizes paging and telemetry revenue, which consists of fees charged to subscribers, when services are provided. Revenue from the sale of paging equipment is recognized upon delivery to the customer.

Cash and Cash Equivalents>

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining collectibility, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances.

Property and Equipment

Property and equipment is recorded at cost. Depreciation of assets is computed using the straight-line method over the following estimated useful lives.

Buildings and improvements	5 - 31.5 years
Office equipment	7 years
Computer equipment and software	5 - 7 years
Communication equipment	5 - 7 years
Vehicles	5 years
T-3000 equipment	5 years

Licenses

Licenses are capitalized and amortized over their estimated useful lives of 10 years and are stated net of amortization. Amortization charged to operations was $92,285 during 2004 and 2003.

Licenses consist of the following at December 31, 2004:

Licenses	$922,856
Less: accumulated amortization	756,719
	$166,137

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2004. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts receivable, accounts payable, notes payable and convertible debentures. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values. The carrying value of the Company’s long-term debt approximated its fair value based on the current market conditions for similar debt instruments.

F-7

Long Lived Assets

The carrying value of long-lived assets is reviewed on a regular basis for the existence of facts and circumstances that suggest impairment. The Company will measures the amount of any impairment based on the amount that the carrying value of the impaired assets exceed the undiscounted cash flows expected to result from the use and eventual disposal of the impaired assets. During 2003 the Company recorded impairment losses as discussed in Note 4.

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share as required by Statement of Financial Accounting Standards (“SFAS”) 128, “Earnings per Share.” Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses common stock equivalents, if any, are not considered, as their effect would be anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Research and Development

Research and development costs are expensed as incurred.

Advertising Costs

Advertising costs are charged to expense as incurred. Advertising costs are included in selling, general and administrative expenses were $8,930 and $1,441 during 2004 and 2003.

Software Development Costs

Direct costs incurred in the development of software are capitalized once the preliminary project stage is complete, management has committed to funding the project and completion, and use of the software for its intended purpose are probable. The Company ceases capitalization of development costs once the software has been substantially completed and is ready for its intended use. Software development costs are amortized over their estimated useful lives of 3 years. Costs associated with upgrades and enhancements that result in additional functionality are capitalized.

Segment Information

The Company follows SFAS 131, “Disclosures about Segments of an Enterprise and Related Information”. Certain information is disclosed, per SFAS 131, based on the way management organizes financial information for making operating decisions and assessing performance. The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Income Taxes

The Company follows SFAS 109 “Accounting for Income Taxes” for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

F-8

Debt with Detachable Warrants and/or Beneficial Conversion Feature

The Company accounts for the issuance of detachable stock purchase warrants in accordance with Accounting Principles Board Opinion 14 (“APB 14”), whereby it separately measures the fair value of the debt and the detachable warrants and allocates the proceeds from the debt on a pro-rata basis to each. The resulting discount from the fair value of the debt allocated to the warrants, which is accounted for as paid-in capital, is amortized over the estimated life of the debt.

In accordance with the provisions of Emerging Issues Task Force Issues 98-5 and 00-27, the Company allocates a portion of the proceeds received to any embedded beneficial conversion feature, based on the difference between the effective conversion price of the proceeds allocated to the convertible debt and the fair value of the underlying common stock on the date the debt is issued. In addition, for the detachable stock purchase warrants, the Company first allocates proceeds to the stock purchase warrants and the debt and then allocates the resulting debt proceeds between the beneficial conversion feature, which is accounted for as paid-in capital, and the initial carrying amount of the debt. The discount resulting from the beneficial conversion feature is amortized over the estimated life of the debt.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees for services based on the fair value of the equity instruments issued and accounts for equity instruments issued to other than employees based on the fair value of the consideration received or the fair value of the equity instruments, whichever is more reliably measurable.

The Company accounts for stock based compensation in accordance with SFAS 123, “Accounting for Stock-Based Compensation.” The provisions of SFAS 123 allow companies to either expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in APB Opinion 25, “Accounting for Stock Issued to Employees” (“APB 25”) but disclose the pro forma effects on net income (loss) had the fair value of the options been expensed. The Company has elected to continue to apply APB 25 in accounting for its stock option incentive plans.

Foreign Currency Translation

The functional currency of one of the Company’s subsidiaries is the applicable local currency. The translation from the applicable foreign currency to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The gains and losses, net of applicable deferred income taxes, resulting from translation are included in stockholders’ (deficit).

The Company’s subsidiary located in Toronto, Canada ceased operations and activities as of March 31, 2002, and the balance of the currency translation adjustment of $191,754 was recorded in operations 2004.

Recent Pronouncements

In December 2003, the Financial Accounting Standards Board issued FASB Interpretation Number 46-R “Consolidation of Variable Interest Entities.” FIN 46-R, which modifies certain provisions and effective dates of FIN 46, sets for the criteria to be used in determining whether an investment is a variable interest entity should be consolidated. These provisions are based on the general premise that if a company controls another entity through interests other than voting interests, that company should consolidate the controlled entity. The Company currently has no entities which require the application of FIN 46-R.

F-9

In November 2004, the FASB issued SFAS 151, “Inventory Costs.” SFAS 151 amends the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) under the guidance in ARB 43, Chapter 4, “Inventory Pricing.” Paragraph 5 of ARB 43, Chapter 4, previously stated that “…under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges….” This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not expect adoption of SFAS 151 to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS 153, “Exchanges of Nonmonetary Assets,” an amendment to Opinion No. 29, “Accounting for Nonmonetary Transactions.” Statement 153 eliminates certain differences in the guidance in Opinion No. 29 as compared to the guidance contained in standards issued by the International Accounting Standards Board. The amendment to Opinion No. 29 eliminates the fair value exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in periods beginning after December 16, 2004. Management does not expect adoption of SFAS 153 to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS 123(R), “Share-Based Payment.” SFAS 123(R) amends SFAS 123, “Accounting for Stock-Based Compensation,” and APB Opinion 25, “Accounting for Stock Issued to Employees.” SFAS 123(R) requires that the cost of share-based payment transactions (including those with employees and non-employees) be recognized in the financial statements. SFAS 123(R) applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity’s shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity’s shares or other equity instruments. This statement is effective (1) for public companies qualifying as SEC small business issuers, as of the first fiscal year beginning after December 15, 2005, or (2) for all other public companies, as of the first fiscal year or interim period beginning after June 15, 2005, or (3) for all nonpublic entities, as of the first fiscal year beginning after December 15, 2005. Management is currently assessing the effect of SFAS No. 123(R) on the Company’s financial statements.

NOTE 2. BASIS OF REPORTING

The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has experienced a significant loss from operations as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the year ended December 31, 2004, the Company incurred a net loss of $13,716,022 and has a working capital deficit of $4,070,114 and a stockholders’ deficit of $23,426,934 at December 31, 2004.

The Company’s ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

The Company is pursuing equity and debt financing for its operations and is seeking to expand its operations. Failure to secure such financing may result in the Company depleting its available funds and not being able pay its obligations.

F-10

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2003 consisted of the following:

Land	$      13,301
Buildings	16,803
Vehicles	32,147
Furniture and office equipment	53,734
Computer equipment and software	354,382
Equipment	1,358,544
	1,828,911
Accumulated depreciation and amortization	(1,039,381	)
	$    789,530

Depreciation and amortization expense for the years ended December 31, 2004 and 2003 was $75,475 and $82,468.

NOTE 4. IMPAIRMENT LOSSES

During the year ended December 31, 2003, the Company determined that certain long-lived assets, consisting of equipment, were impaired. The Company charged the amount by which fair value, determined by comparing the estimated future cash flows of the assets of $0 to the carrying value of $103,000 to operations.

NOTE 5. NOTES PAYABLE - RELATED PARTIES

The Company has outstanding notes payable to affiliates in the principal amount of $492,000 at December 31, 2004. During the years ended December 31, 2004 and 2003, the affiliates advanced additional funds of $25,000 and $568,640 and the Company made repayments of the advances of $0 and $100,000. The debt is convertible into common shares of the Company at $.02 per share.

The Company used the intrinsic value method to determine that all of proceeds should be allocated to the embedded beneficial conversion feature. As such, $492,000 was credited to additional paid in capital. The allocation of $467,000 will be amortized over 24 months commencing January 1, 2005, and the allocation of $25,000 was charged to interest expense during the year ended December 31, 2004.

Convertible debt - interest at 10% per annum, due on December 31, 2006	$ 467,000
Convertible debt - interest at 10% per annum, due on demand	25,000
	492,000
Debt discount, less amortization of $25,000	(467,000	)
	$   25,000

During May 2003, the Company, through corporate resolution, agreed to convert existing corporate indebtedness of major shareholders and investors in the company into equity through an approved corporate exchange of non-issued common shares for notes and accrued interest aggregating $4,107,297. The conversion of debt to equity by those participating note holders would include the issuance of preferred and common shares of the Company. The Corporation’s Amended Articles of Incorporation (“Articles”) authorizes the Corporation to issue up to 5,000,000 Preferred Shares, with a par value of $.001 (“Preferred Shares”) in one or more series at such price and in such number as authorized by the Board of Directors. The Articles also authorize the Board to prescribe the number, voting powers, designations, preferences, limitations, restrictions and relative rights of each series of Preferred Shares. Accordingly, the Board of Directors designated 250,000 Preferred Shares as Series D Preferred Shares (see Note 9). In September 2004 a major shareholder received 6,523,496 shares of common stock for $260,940 of this debt conversion and the other persons and entities who had initially agreed to accept preferred shares agreed to accept common shares in lieu of the preferred shares.

F-11

The Company has recorded interest expense of $29,170 and $236,342 during the years ended December 31, 2004 and 2003. In addition to the stated interest rates the Company has agreed to issue an aggregate of 16,650,301 shares of common stock as additional consideration for the loans. These shares have been valued at $3,951,927, which represents the fair market value of the shares on the dates of the loans. During 2004 and 2003, $95,951 and $646,174 has been charged to operations related to these issuances. To date, with the exception of the 6,523,496 shares of common stock described above none of the shares have been issued (see Note 9).

During May 2003 in conjunction with the conversion of the notes and accrued interest the note holders forgave the issuance of an aggregate of 10,594,539 shares of common stock with an aggregate value of $3,233,978.

On February 3, 2003 the Company issued a $30,000 term note with interest at 10% per annum payable to a related party which required three installment payments of $10,000 each on March 3, 2003, April 3, 2003 and May 3, 2003. The note provided a penalty that in the event a payment was not received, within 5 days of each due date, the Company would be declared in default. The holder of the note would then be entitled to receive shares of stock of the Company at $0.11 per share, for outstanding principal balance including interest. Additionally, for each 30 days beyond the due date, additional shares would be computed at the rate of ½ of the initial conversion rate. On November 30, 2004, the related party agreed to convert the note plus $4,757 in accrued interest into shares of stock of the Company, at par, with the holder to receive 36,175,000 shares of common stock. The difference in the share price of $.001 and the fair market value of the shares at the time of conversion was $5,391,493 which was charged to non-cash stock interest.

NOTE 6. NOTES PAYABLE

Convertible debentures - interest at 6.25% per annum, conversion
feature allows the holder to use the debenture as payment for a like
value of securities should the Company complete a stock offering of
$6,000,000 at January 1, 2001. Such an offering was not completed
The debentures are currently in default	$ 1,200,000
Note payable - Federal Communications Commission (C Block) interest
at 7% per annum. Interest payments only of $13,543 due on a quarterly
basis through September 2002. Quarterly interest and principal
payments of $55,875 beginning December 2002 until maturity at
September 2006, secured by FCC license	508,525
Note payable - Federal Communications Commission (F Block)
interest at 7% per annum. Interest payments only of $1,163 due on
a quarterly basis through April 1999. Quarterly interest and
principal payments of $2,975 beginning July 2001 until maturity
at April 2007, secured by FCC license	32,323
	$ 1,740,848
Less: current portion	$ 1,303,164
	$    437,684

F-12

Maturity of long term debt is as follows:

2005	$1,303,164
2006	431,871
2007	5,813
	$1,740,848

NOTE 7. CONVERTIBLE DEBENTURES

During October 2003 the Company entered into a funding agreement with a third party whereby the Company would be able to borrow up to $2,000,000 in the form of convertible notes. As of December 31, 2003, the Company was advanced an aggregate of $350,000 pursuant to these demand notes. The notes do not bear interest unless in default in which case interest accrued at the rate of 12% per annum. The notes had a conversion feature which allowed for conversion into the Company’s common shares at $.04 per share, which the Company suspended because of the dispute described in Note 10 with TowerGate and Nyssen. This conversion right was reinstated on November 30, 2004, upon the Company reaching a settlement agreement with TowerGate and Nyssen and the difference between the conversion price and the fair market value of the shares was charged to interest expense (see below).

As of November 30, 2004, the Company was advanced an aggregate of $1,600,025 pursuant to this funding agreement. Pursuant to the agreement dated November 30, 2004, the note holder agreed to convert the $1,600,025 demand note into common shares at $.04 per share receiving 40,000,000 shares of common stock. The difference between $.04 per share price and the fair market value of the shares at the time of conversion was $4,399,975 and this amount was charged to non-cash interest. In the same agreement, a entity related to this third party investor received 20,000,000 shares of common stock for non-cash stock compensation for services. The Company recorded a $3,000,000 charge to non-cash compensation.

Provided in the November 30, 2004 agreement, the note holder, its management and associates will invest an additional $300,000 as follows:

$100,000 at $0.02 per share
$200,000 at $0.10 per share

Provided in the November 30, 2004 agreement, a related party, its management and associates will invest an additional $300,000 as follows:

$200,000 at $0.02 per share
$100,000 at $0.10 per share

See Note 11.

NOTE 8. INCOME TAXES

The Company accounts for income taxes under SFAS 109, which requires use of the liability method. SFAS 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:

Income tax provision at
the federal statutory rate	34	%
Effect of operating losses	(34	)%
	--

F-13

As of December 31, 2004, the Company has a net operating loss carryforward of approximately $47,000,000. This loss will be available to offset future taxable income. If not used, this carryforward will expire through 2024 subject to certain limitations resulting from a change in control. The deferred tax asset of approximately $16,000,000 relating to the operating loss carryforward has been fully reserved at December 31, 2004.

NOTE 9. STOCKHOLDERS’ (DEFICIT)

Preferred Stock

     1. Rank. Series D Preferred Shares (“Series D Shares”) are senior to the Company’s common shares (“Common Shares”), in priority for receiving distributions and for payment upon liquidation of the Company.

     2. Preference. Each Series D Share has a liquidation preference of $30.00 plus all accrued but unpaid distributions (the “Preference”).

     3. Conversion Rate. Upon a Conversion Event (see §8) the affected Series D Shares shall convert into Common Shares at the Conversion Rate. The ‘Conversion Rate’ shall initially be two hundred (200) Common Share into one Series D Share but will automatically adjust:

3.1. in the same manner as the Common Shares were adjusted in stock splits, share consolidations, stock dividends, recapitalizations, and similar changes to the Company’s capitalization (“Recapitalization”). For example, if each Common Share was split into two recapitalized Common Shares then the Conversion Rate would become one Series D Share into four hundred recapitalized Common Shares);

3.2. so that the percentage of the total Common Shares and securities convertible into Common Shares (collectively, “Share Equivalents”) represented by the Series D Shares owned by each Series D Holder (the “Series D Percentage”) does not change despite any issuance of Share Equivalents (excluding securities issued pursuant to an employee stock option plan) at a per-Share Equivalent price below the Preference.

Upon the occurrence of each adjustment of the Conversion Rate, the Company, at its expense, shall promptly compute such Conversion Rate adjustment and furnish each Series D Holder with a certificate stating the new Conversion Rate and explaining the facts underlying the Conversion Rate adjustment. The term ‘Common Equivalent Basis’ means equally with the Common Shares as though the Series D Shares were converted into Common Shares at the then-applicable Conversion Rate.

     4. Distributions. Each Series D Preferred Shareholder (a “Series D Holder”) shall participate in distributions on a Common Equivalent Basis.

     5. Liquidation Preference. If the Company is liquidated, Series D Holders shall receive their entire Preference (i.e., $30.00 per Series D Share plus all accrued but unpaid distributions) before any distribution or payment is made on any junior capital stock (including the Common Shares). After receiving this Preference, Series D Holders will then participate in distribution of the Company’s assets on a Common Equivalent Basis.

     6. Voting Rights. Series D Shares shall vote as a separate voting group on the following matters:

6.1. issuance of any Company capital stock senior to the Series D Shares in priority for receiving distributions, for payment of any liquidation preference and in redemption rights;

6.2. alteration of the Preferences of the Series D Shares, including amendments to the Articles or Bylaws;

6.3. liquidation, Recapitalization or similar corporate reorganization;

6.4. loans, borrowings, debt, guarantees or similar obligations (“Debt”) by Company except when Company’s aggregate Debt is below $3,000,000;

6.5. transaction or associated transactions:

F-14

6.5.1. involving a merger, consolidation or similar transaction;

6.5.2. issuing or transferring more than 50% of the Company's voting stock;

6.5.3. selling all or substantially all Company assets;

when the resulting deemed value of the Common Shares would be less than $15.00 per Common Share;

6.6. conversion of all Series D Shares into Common Shares pursuant to Section 8.4;

6.7. transactions identified in Sections 7.4.2 & 7.4.6 after the aggregate Share Equivalents issued in such transactions exceeds $1 million; and

6.8. when the Act requires voting as a separate voting group.

Each Series D Holder has the right to notice of all meetings of the Company’s shareholders, to attend such meetings and to vote on a Common Equivalent Basis on all matters presented for vote by the Common Shares except for those specified in this Section.

     7. Preemptive Rights. If the Company sells any Share Equivalents then each Series D Holder may prevent a reduction in its Series D Percentage after such sale (“Preemptive Right”) by purchasing a sufficient portion of such Share Equivalents.

7.1. Company will notify each Series D Holder about the proposed sale of Share Equivalents, the terms, the proposed sale date and the amount the Series D Holder must pay to prevent reduction in its Series D Percentage (“Preemption Price”).

7.2. To exercise its Preemptive Right, a Series D Holder must provide the Preemption Price to Company within 30 days after the notice of the proposed sale; otherwise a Series D Holder waives its Preemptive Right for that particular sale.

7.3. Company will permit those Series D Holders exercising their Preemptive Right to exercise the Preemptive Right of those Series D Holders that do not exercise their Preemptive Right; such exercise shall be pro rata to the relative Series D Percentages of the exercising Series D Holders and payment must occur at least 10 days before the proposed date for the sale of the Share Equivalents.

7.4. This Section does not apply to issuances or sales of Share Equivalents:

7.4.1. pursuant to employee stock or option grants;

7.4.2. to strategic corporate partners;

7.4.3. for equipment financing;

7.4.4. to acquire another business;

7.4.5. in an underwritten public offering; or

7.4.6. in a transaction when the Company does not receive cash proceeds from such issuance or sale;

but Series D Holder approval is required pursuant to Section 6.8 after the aggregate Share Equivalents issued in transactions identified in Sections 7.4.2 & 7.4.6 exceeds $1 million.

7.5. Company must notify the Series D Holders of any transaction listed in Section 6.4 or 6.5 (a “Combination”) and permit the Series D Holders collectively to purchase the Company (either by acquiring all Company capital stock or purchasing all or substantially all Company assets) at the deemed per-Common Share value proposed in the Combination. If any Series D Holder does not desire to purchase it’s pro rata portion of Company capital stock or assets, then remaining Series D Holders may purchase that portion).

The Preemptive Rights shall apply again to a proposed sale of Share Equivalents if Company does not complete that proposed sale or Combination within 150 days after the initial notice given by Company.

     8. Conversion Events. Upon any of the following events (“Conversion Events”):

8.1. A Series D Holder requests conversion of any Series D Shares;

8.2. Company completes an underwritten public offering of the Common Shares for gross proceeds of at least $5 million and the total Share Equivalents would have a deemed value of at least $10 million using the public offering price per Common Share; or

F-15

8.3. a majority of the Series D Holders vote (pursuant to Section 6.7) to convert all Series D Shares; then the affected Series D Shares will convert into Common Shares pursuant to Section 3.

     9. Redemption. The Company may redeem the Series D Shares, in whole or in part, at the same time (a “Redemption Event”).

9.1. Company elects to redeem only a portion of the Series D Preferred Shares.

9.2. Company will notify each Series D Holder about the Redemption Event, the redemption terms and the Redemption Date (at least 30 days after the Redemption Event).

9.3. Prior to the Redemption Date, a Series D Holder may convert any Series D Shares into Common Shares pursuant to Section 8.

9.4. If Company redeems less than all Series D Shares outstanding on the Redemption Date then Company shall redeem such Series D Shares on a pro rata basis.

On the Redemption Date, the Company will pay the Preference for each redeemed Series D Share in immediately available funds to the associated Series D Holder.

     10. Limited Issuance. After conversion or redemption of any Series D Share, such Series D Share shall not be available for re-issuance.

Common Stock

During the year ended December 31, 2003, the Company recorded stock subscriptions for an aggregate of $458,500 for 5,585,635 shares of common stock related to incentive compensation due to related parties and $300,000 for 2,729,942 shares of common shares related to unpaid officer’s salary.

During May 2003 the Company agreed to issue 10,042,500 shares of common stock to an officer for the conversion of notes aggregating $401,700. The difference between the fair market value of the shares and the conversion price aggregating $1,104,675 has been charged to operations during the year. During the year ended December 31, 2004, the Company issued 6,523,496 of these common shares and reduced the stock subscription by $260,940.

During the year ended December 31, 2003 the Company agreed to issue an aggregate of 600,000 shares of common stock for services valued at their fair market value of $36,000, and 2,161,704 shares of common stock for prior years salary due to an officer valued at their fair market value of $271,000. These amounts have been charged to operations during the year.

During the year ended December 31, 2004, the Company recorded stock subscriptions for an aggregate of $14,426,250 for 96,175,000 shares of common stock. Of the $14,426,250, $3,000,000 for 20,000,000 shares of common stock is related to compensation and $6,000,000 for 40,000,000 shares of common stock is related to the conversion of debt and non-cash stock interest, described in Note 7. The remaining $5,426,250 for 36,175,000 shares of common stock relate to the conversion of the $30,000 note described in Note 5.

The Company has obligations to issue common shares at December 31, 2004, pursuant to the conversions of various loans and accrued interest, incentive shares, and services as follows:

	Shares	Amount
Officers salary	6,479,479	$     859,000
Loan incentive shares	6,055,762	719,947
Conversion of debt	40,000,000	6,000,000
Services	20,600,000	3,036,000
Conversion of related
party debt	64,948,445	9,272,607
	138,083,686	$19,887,554

F-16

Stock-based Compensation

The Company has a stock option plan, which covers certain key management personnel. Options to purchase common shares may be granted at a price not less than fair market value on the date of the grant. Options may not be exercised prior to one year or after five years from the date of the grant. No options were granted during 2004 or 2003.

A summary of stock option and warrant activity is as follows:

	Number of shares		Weighted average exercise price
Balance at
December 31, 2002	1,081,250		$3.79
Granted	--
Exercised/Forfeited	--
	--
Balance at
December 31, 2003	1,081,250		$3.79
Granted	--
Exercised/Forfeited	(631,250	)
Balance at
December 31, 2004	450,000		$2.04

Exercisable at December 31, 2004:  450,000

Weighted average remaining contractual life - 6 years
Weighted average fair value - $.40

NOTE 10. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office from an officer of the Company at a rate of $2,500 per month pursuant to a lease expiring in October 2007. Future minimum lease payments are as follows:

2005: $30,000 2006: $30,000 2007: $25,000

Rent expense for the years ended December 31, 2004 and 2003 including the above lease was $53,482 and $52,462.

Employment and Consulting Contracts

The Company has entered into an employment contract expiring on December 31, 2003 with its president. The agreement call for annual salary payments of $300,000 plus bonuses based on certain performance objectives. During 2003 this officer received no cash payments and the balance was paid with a common stock subscription for 2,729,242 shares valued at their fair market value of $300,000.

Effective on December 1, 2004, the Company entered into a consulting agreement with a former officer for a monthly fee of $10,000. The agreement may be cancelled upon 30 days notice by either party.

F-17

Litigation

The Company was involved in litigation with Plexus Corp., a vendor, related to good and services provided by Plexus. At December 31, 2002, the Company had recorded a liability of $557,413 to Plexus, which was included in accounts payable. The Company disputed the amount and the fact that Plexus provided the goods and services required by the Company. During February 2003 the Company settled litigation with Plexus whereby the Company and Plexus mutually released each other from any and all claims against the other party. Pursuant to the terms of the settlement agreement the Company is not required to make any payment to Plexus. The amount of the recorded liability of $557,413 less the carrying value of the equipment was recognized as a gain from the settlement of a liability during 2003 aggregating $269,220.

On September 10, 2004, the Company filed a Complaint in the United States District Court in the Southern District of New York against Michael Tracy ("Tracy"), Michael L. Glaser ("Glaser"), and William W. Becker ("Becker"), in case number 04CV7255. The Complaint sought an award for compensatory damages, an injunction against Tracy, Glaser and Becker for breach of fiduciary duty, costs and expenses for litigation (except fees and other disbursements) including reasonable attorney's fees, and against Tracy for conversion, and such other and further relief as may be deemed just and proper.

On September 16, 2004, the Company filed a complaint in the United States District Court for the District of Nebraska, in case number 7:04CV5020, against TowerGate Finance, Ltd., ("TowerGate") and Nyssen, LP ("Nyssen"). The Complaint alleges fraudulent misrepresentations against TowerGate, fraudulent concealment against Nyssen, breach of fiduciary duty against TowerGate, civil conspiracy against TowerGate and Nyssen, breach of contract against TowerGate, and breach of the covenant of good faith and fair dealings against TowerGate. The Complaint seeks preliminary and permanent injunction, declaratory judgment and an accounting. The Complaint also requests a jury trial.

On December 10, 2004, the Company, Tracy, Glaser and Becker and our other majority shareholders and TowerGate and Nyssen entered into a binding agreement ("Agreement") dated as of November 30, 2004, in which the parties agreed to dismiss the above described lawsuits, and settle the dispute between them and between the Company and TowerGate and Nyssen. The agreement calls for the appointment of an interim board of directors and stipulated that so long as Becker and affiliated entities and TowerGate/Nyssen hold in excess of 25% of the outstanding voting common shares that they will be entitled to appoint two directors.

All parties to the Settlement Agreement are either beneficial owners of the Company's common stock, current or proposed members of the Company's management, and/or are parties or affiliates of parties involved in the Litigation that gave rise to the Settlement Agreement. Despite the filing of a December 21, 2004, Form 8-K related to this litigation, the Company has never disclosed the specific terms of the Settlement Agreement, including the relationships among the parties to the Settlement Agreement, whether and how the terms of the Settlement Agreement will be fulfilled and the existence and substance of potential violations of Delaware law and the Company's bylaws as a result of the terms contained in the Settlement Agreement.

In the Settlement Agreement, the parties agree that the parties will undertake the following actions:

Increase the Company’s authorized share capital;
Effect material share issuances to Becker Capital Management;
Effect material share issuances to Nyssen LP and Tower Gate Finance Limited; and
Adopt a stock option plan for the Company's existing and new management.

The Settlement Agreement gives rise to the following unasserted claims, all of which expose the Company to potential shareholder lawsuits or SEC regulatory actions. The Company is attempting to comply with all of the requirements of Delaware law and the SEC requirements, but there can be no assurance that it will be able to do so. In addition, FCC approval is required for certain of the share issuances and if this approval is not obtained by the Company there may be material negative impact on the Company's financial position and results of operations.

Violation of Delaware Law and Corporate Bylaws.

Section 144 of the Delaware Corporation Code states:

“Interested directors; Quorum” provides that any contract or transaction between the Company and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association or other organization in which 1 or more of its directors or officers, are directors or officers, or have a financial interest requires the approval of the contract and related transactions by: (a) a majority of the Company's disinterested directors; and (b) the Company’s shareholders.

F-18

If the Company fails to comply with either requirement (a and b above), it is subject to shareholder action. Additionally, Section 144 provides that the Settlement Agreement could potentially be voided unless it is fair to the Company. The action of increasing the Company's authorized common stock so that it can issue large numbers of shares to the parties to the agreement, who are management, beneficial owners or affiliates, and also adopting a stock option plan for the benefit of management, may be considered unfair to the Company’s shareholders who are not party to the agreement.

The issuances of significant shares (described above) to the Company's management and beneficial owners as provided for in the Settlement Agreement may be set aside under Delaware Corporation Law. Section 161 imposes limitations on directors' power to issue authorized shares. Any new stock issuance, such as those provided for in the Settlement Agreement, is subject to the statutory requirements regarding quality and quantity of consideration to be received for the shares. The foregoing actions may require the vote of disinterested shareholders pursuant to Delaware Corporate Code Section 144 because all of the parties to the Settlement Agreement are either the Company's directors and/or beneficial owners, and/or all are interested directors and/or interested shareholders.

The Company’s bylaws and Delaware corporation law require that directors be elected at any annual meeting of Shareholders.

Because the Company has a class of securities registered pursuant to the Securities Exchange Act of 1934 ("Exchange Act"), the Company must comply with Exchange Act Section 14 disclosure requirements. The Company is required to file a Proxy Statement on Form 14A or an Information Statement on Schedule 14C and will be prohibited from taking the actions set forth in the Settlement Agreement until twenty days after the filing of the Proxy or of its Definitive Information Statement.

The Company is delinquent in filing several reports on Form 10-KSB and Form 10-QSB and failed to timely correct any insufficient and incomplete disclosure in its SEC filings,

The Company is also involved in various legal actions arising in the normal course of business management believes that such matters will not have a material effect upon the financial position of the Company.

Equipment Purchase Agreement

During November 2003 the Company entered into an agreement to purchase network switching equipment for an aggregate of $676,800. Subsequently the vendor and the Company agreed to adjust the purchase price to $552,943. The Company made a down payment on the equipment in the amount of $101,000, which is included in other assets at December 31, 2003. The equipment was delivered in 2004 and the Company paid an aggregate of $477,943 including the $101,000 deposit and a balance of $75,000 is due to the vendor.

Other

The Company has agreed to issue certain common shares to various related parties. As of December 31, 2004, the Company does not have sufficient authorized shares to affect these issuances.

On or about September 10, 2001, the company filed a Form S-8 Registration Statement under the Securities Act of 1933 registering 375,000 shares of common stock to be issued in accordance with a consulting agreement. On September 21, 2001, the Company issued the 375,000 shares of common stock. The Company received and acted in reasonable reliance upon legal advice and guidance from legal counsel at the time regarding the issuance, however, it has been recently advised that certain investor relations related services that were to be provided are prohibited under Regulation S-8. As such, the issuance of the 375,000 shares of common stock may have violated the registration provisions of the federal securities laws, specifically Section 5 of the Securities Act of 1933.

NOTE 11. SUBSEQUENT EVENTS

Through December 21, 2005 the Company borrowed an additional $690,000 pursuant to the third party convertible notes described in the Funding Agreement dated November 30, 2004. The lender agreed to convert $300,000 of these advances into 7,000,000 shares of the Company’s common stock at June 30, 2005. The advances bear interest at 15% per annum and are due on demand.

Through December 21, 2005 the Company borrowed an additional $729,000 pursuant to the related party convertible note described in the Funding Agreement dated November 30, 2004. The lender agreed to convert $275,000 of these advances into 9,750,000 shares of the Company’s common stock at June 30, 2005. The balances of the advances bear interest at 15% per annum and are due on demand.

Subsequent to December 31, 2004, the Company made application with the FCC for approval of the shares to be issued to Becker, Nyssen, TowerGate and Becker Capital Management LLC per the settlement agreement described in the Litigation section of Note 10. The application is currently pending.

F-19

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.

Not applicable

ITEM 8A. CONTROLS AND PROCEDURES.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Acts reports is recorded, processed and summarized and is reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure control procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the date of this report, the Company's management, including the President (principal executive officer)and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, the Company’s President (principal executive officer) and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic SEC filings. There have been no significant changes in the Company’s internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company’s management carried out its evaluation.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.

23

Part III.

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

Directors and Executive Officers: Our Directors may appoint new directors and elect officers at regular meetings with proper notification. Our shareholders elect our directors at each annual general meeting. Directors hold office until their successors have been elected and qualified or until death, resignation or removal. Our Officers are appointed by our Board of Directors. Our directors and executive officers are as follows:

Name	Age	Position	Term of Office
William Becker	74	Chairman of the Board	Until resignation
			Or removal
Gary Brown	54	Secretary and Treasurer	Until resignation
		And Director	Or removal
Patrick J. Kealy	63	Former Chairman	Resigned
		of the Board
Michael Tracy	59	Former President	Resigned
		Former Chief Executive
		Officer, Former Acting
		Chief Financial Officer,
		Former Director
John T. Connor, Jr	64	Former Secretary	Resigned
Michael L. Glaser	65	Former Secretary and	Resigned
		Director
Richard Dineley	54	Former President and	Resigned
		Chief Executive Officer
Richard West	49	Former Secretary	Resigned

William Becker has been our Chairman of the Board from March 30, 1999 to April 15, 2004 and since September 3, 2004. Mr. Becker was also a Director of the Company from April 15, 2004 to September 3, 2004. From March 1996 to June 1999 and then from September 1999 to present, Mr. Becker was the Chairman of the Board of: (a) the Becker Group of Companies, a investment and venture capital firm, based in Grand Cayman, Bahamas; and (b) TeleHub Communications, a research and development located in Gurnee, Illinois.

Gary Brown has been Secretary and Treasurer since September 16, 2004 and has been a Director since October 9, 2004. Mr. Brown is Executive Vice President of Global Sales for Taqua, Inc., a manufacturer of telecommunications switching systems. From December 2001 to October 2003, Mr. Brown served as chief operating officer of Metro-Optics, also a manufacturer of telecommunications switching systems. Mr. Brown has more than 29 years experience in the telecommunications industry.

Patrick J. Kealy was our Chairman of the Board from April 15, 2004 through September 3, 2004. From July 2002 to present, Mr. Kealy has been the Chairman of Swissfone International, Ltd., an international long distance service provider located in Washington, DC. Mr. Kealy held various management positions in investment firms from 1965 to 2002. Mr. Kealy graduated from Notre Dame University in 1965 with a BBA Degree in Finance.

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Michael Tracy was a Director from April 1999 until November 30, 2004. He held the positions of President and CEO from December 1999 to April 14, 2004 and from September 16, 2004 to November 30, 2004. He also held the position of Acting Chief Financial Officer from September 16, 2004 to November 30, 2004. From 1982 through date, Mr. Tracy has been President of Tracy Corporation II, dba Western Total Communications, a wholly-owned subsidiary of Telemetrix, and also dba Telemetrix Technologies, and the entity that holds a license issued by the Federal Communications Commission authorizing it to provide wireless personal communication services and paging services in Gering, Nebraska.

John T. Connor, Jr. was our Secretary since April 15, 2004 until June 17, 2004. Since October 1998, Mr. Connor has been the founder and portfolio manager of Third Millennium Russia Fund, a Securities and Exchange Commission mutual fund. Mr. Connor graduated from Williams College in 1964 with a Bachelor or Arts Degree and from Harvard Law School in 1967 with a Juris Doctor Degree.

Michael L. Glaser was our Secretary and Director from April 1999 until April 15, 2004. Mr. Glaser has been an attorney with the law firm of Shughart Thomson & Kilroy, P.C. since January 2003. From January 1996 through December 2002, Mr. Glaser was a director and shareholder of the law firm of Lottner Rubin Fishman & Saul, P.C. located in Denver, Colorado. Mr. Glaser received a BA from George Washington University in 1961 and a Juris Doctor Degree from George Washington University School of Law in 1965.

Richard Dineley was our President and Chief Operating Officer From June 17, 2004 to September 16, 2004. From June 1993 to present, Mr. Dineley has been the President of deltaVectors LLC, a strategic consulting and investment services firm located in Atlanta, Georgia. Mr. Dineley obtained a Master of Business Administration degree in Finance and International business in December 1977. In October 1987 Mr. Dineley was licensed as a Certified Public Accountant by the State of Virginia.

Richard West joined the firm as an Independent Contractor was our Secretary/ General Counsel from June 17, 2004 to September 16, 2004. Mr. West has been a principal of West Law firm LLC in Yew York, New York. Mr. West is a member of the New York State and Louisiana State Bars.

SIGNIFICANT EMPLOYEES

None

FAMILY RELATIONSHIPS

There are no other family relationships among our officers, directors, promoters, or persons nominated for such positions.

LEGAL PROCEEDINGS

William Becker, a Director and our former Chairman of the Board, was the Chairman of TeleHub Communications Corporation from March 1996 through June 1999 and then from September 1999 to the present. On October 27, 1999, a TeleHub subsidiary petitioned for reorganization under the U.S. Bankruptcy Code. At that time, that subsidiary owed its parent corporation, TeleHub Communications Corporation approximately $606,000 for billing and consulting services. Given the status of this bankruptcy case, TeleHub Communications Corporation has reserved for the entire amount owed and does not expect to receive any payment.

Apart from the above matter, no officer, director, or persons nominated for such positions, promoter or significant employee has been involved in legal proceedings that would be material to an evaluation of our management.

Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:

25

     1.    any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

     2.    any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

     3.    being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

     4.    being found by a court of competent jurisdiction (in a civil action),the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

COMMITTEE OF THE BOARD OF DIRECTORS

We presently do not have an audit committee, compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committees. However, our Board of Directors is considering establishing various such committees during the current fiscal year. Currently, our Board of Directors makes decisions regarding compensation, our audit, the appointment of auditors, and the inclusion of financial statements in our periodic reports.

AUDIT COMMITTEE FINANCIAL EXPERT

We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive.

CODE OF ETHICS

We have not yet adopted a corporate code of ethics. Our board of directors is considering establishing, over the next year, a code of ethics to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth summary information concerning the compensation received for services rendered to it during the current year and the years ended December 31, 2004 and 2003, and 2002 respectively.

SUMMARY COMPENSATION CHART

	Annual Compensation			Long Term Compensation
Name & Position	Year	Salary $	Bonus $		Other $	Restricted Stock Awards	Options $	Payouts $	All Other Compensation
Michael J. Tracy*	2004	70,000	0		0	0	0	0	0
Chief Executive Officer	2003	300,000	0		0	0	0	0	0
	2002	300,000	0		0	0	0	0	0
Geoffrey Girdler**	2004	150,000	0		0	0	0	0	0
Chief Executive Officer
Richard Dineley***	2004	200,000	0		0	0	0	0	0
President

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* During 2003, or Chief executive Officer, agreed to accept a total of 2,729,942 shares of our common stock in lieu of his $300,000 salary. These shares were valued at prices ranging from $0.06 to $0.036. To date, none of these shares have been issued.
** Mr. Girdler’s position with the Company was through September 16, 2004.
*** Mr. Dineley’s position with the Company was from June 17, 2004 through September 16, 2004.

OPTION/SAR GRANTS 2004

Name and Principle Position	Number of Securities Underlying Options	% of Total Options Granted to Employees in 2004(1)	Exercise Price	Expiration Date
Michael Tracy, Former (President,	0	0	Not Applicable	Not Applicable
Chief Executive Officer, Acting
Chief Financial Officer,
Chief Accounting Officer, Director)
William W. Becker, Director, Former	0	0	Not Applicable	Not Applicable
Chairman of the Board
Michael L. Glaser, Former Secretary and	0	0	Not Applicable	Not Applicable
Former Director
TOTAL		100.00%

(1)   There were no Options/SAR Grants in 2004, the last completed fiscal year.

AGGREGATE OPTIONS/SAR EXERCISES IN 2004 AND FISCAL YEAR END OPTIONS/SAR VALUES

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options/SARs at FY-End (#) Exercisable/ Unexercisable	Value of Unexercised In-the-Money Options/SARs at FY-End ($) Exercisable/ Unexercisable
Michael Tracy,	Not Applicable	Not Applicable	150,000 / 0	Not Applicable
Former (President, Chief
Executive Officer, Acting Chief
Financial Officer, Chief
Accounting Officer, Director)
William W. Becker Director,	Not Applicable	Not Applicable	150,000 / 0	Not Applicable
Former Chairman of the Board
Michael L. Glaser Former	Not Applicable	Not Applicable	150,000 / 0	Not Applicable
Secretary and Former Director

There were no in-the-money exercisable options or SARs at the end of the fiscal year.

Board Compensation

Mr. Patrick Kealy received $12,310 in compensation in 2004 for his service as Chairman of the Board from April 15, 2004 through September 3, 2004. No other Directors receive any compensation for their services as directors, although some Directors are reimbursed for reasonable expenses incurred in attending board or committee meetings.

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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following tables set forth the ownership as of December 31, 2004: (a) by each person known by us to be the beneficial owner of more than five percent (5%) of our outstanding common stock; and (b) by each of our directors, by all executive officers and our directors as a group.

To the best of our knowledge, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. Other than the November 30, 2004 Agreement discussed in Note 7 of the Audited Financial Statements, there are not any pending or anticipated arrangements that may cause a change in our control.

     Security Ownership of Beneficial Owners:

Title of Class	Name & Address	Amount	Nature	Percentage
Common	William W. Becker	6,273,763*	Direct	25.10%
	Chairman of the Board and Acting CEO		And In-direct
	Lane West Bay Road
	Georgetown, Grand Cayman
	British West Indies
Common	Michael J. Tracy	11,409,000**	Direct	45.64%
	Former Chief Executive Officer		And In-direct
	and Director
	721 East 38th Street
	Scottsbluff, Nebraska 69361
Common	Michael L. Glaser***	1,432,554	Direct	5.73%
	Former Secretary and Director
	2324 S. Jackson
	Denver, Colorado 80210
Common	Vintage Investments Ltd.	1,725,000	Direct	6.90%
	One Capital Place
	Shedden Road, Georgetown
	Grand Cayman, BWI****
Total		20,840,317		83.37%

*William W. Becker’s beneficial ownership 6,273,763 shares of our common stock is composed of: (a) 4,115,430 shares held in the name of Hartford Holding Ltd., a wholly owned company of William Becker; (b) 87,500 shares that he individually owns; (c) 50,000 shares that are owned by his wife, Christine Becker; (d) 2,000,000 shares held in the name of the following entities located at c/o The Harbour Trust Co. Ltd, One Capital Place, P.O. Box 1787, Cayman Islands, British West Indies, in which William W. Becker has voting over such shares: (i) 750,000 shares owned by Ardara Investment, Ltd. A trust that is maintained for the benefit of one of William Becker’s (son/grandson);(ii)500,000 shares owned by Wyse Investments, Ltd./ a Trust that is maintained for the benefit of one of William Becker’s (son/grandson); and (iii) 750,000 shares owned by Ionian Investments, Ltd., a trust that is maintained for the benefit of one of William Becker’s (son/grandson); and 20,833 shares held in the name of BGC Investments LLC, a Colorado limited liability company.

** Michael J. Tracy’s beneficial ownership of 11,409,000 shares of our common stock is composed of 4,885,504 shares held in the name of Michael Tracy and 6,523,496 shares held in the name of Tracy Broadcasting Corporation, a wholly owned corporation of Michael Tracy.

*** Michael L. Glaser’s ownership of 1,432,554 shares of our common stock is composed of: (a) 816,533 shares owned by Michael L. Glaser individually; (b) 12,500 shares owned jointly by Michael L. Glaser and his wife, Catherine M. Glaser; and (c) 603,521 shares in the name of Michael L. Glaser IRA Rollover.

**** Vintage Investments Ltd. holds the shares of our common stock directly. Vintage Investments shares are owned by a trust in which the beneficiary of the trust is the former wife of William Becker, Marguerite Laura Becker.

     SECURITY OWNERSHIP OF MANAGEMENT:

Title of Class	Name & Address	Amount	Nature	Percentage
Common	William W. Becker	6,273,763*	Direct	25.10%
	Chairman of the Board and Acting CEO		And Indirect
	Lane West Bay Road
	Georgetown, Grand Cayman
	British West Indies
Common	Gary Brown	2,000**	Direct	0.00%
	Director
	211 Long Canyon Court
	Richardson, Texas 75080
Common	Michael J. Tracy	11,409,000***	Direct	45.64%
	Former Chief Executive Officer		And Indirect
	and Director
	731 East 38th Street
	Scottsbluff, Nebraska 69361
Common	Michael L. Glaser	1,432,544****	Direct	5.73%
	Former Secretary and Director
	2324 S. Jackson
	Denver, Colorado 80210
Common	Patrick J. Kealy	0	Not Applicable	Not Applicable
	Former Chairman of the Board
	53 E. 74th Street, Apartment 4R
	New York, New York 10021
Common	John T. Connor, Jr.	0	Not Applicable	Not Applicable
	Former Secretary and Treasurer
	2300 Old Scenic Highway,
	Lake Wales, Florida 33859
Common	Richard Dineley	0	Not Applicable	Not Applicable
	Former President and Chief
	Executive Officer
Total		19,117,307		76.47%

*William W. Becker’s beneficial ownership of 6,273,763 shares of our common stock is composed of: (a) 4,115,430 shares held in the name of Hartford Holding Ltd., a wholly owned company of William Becker; (b) 87,500 shares that he individually owns; (c) 50,000 shares that are owned by his wife, Christine Becker; (d) 2,000,000 shares held in the name of the following entities located at c/o The Harbour Trust Co. Ltd, One Capital Place, P.O. Box 1787, Cayman Islands, British West Indies, in which William W. Becker has voting over such shares: (i) 750,000 shares owned by Adara Investment, Ltd. A trust that is maintained for the benefit of one of William Becker’s (son/grandson);(ii)500,000 shares owned by Wyse Investments, Ltd./ a Trust that is maintained for the benefit of one of William Becker’s (son/grandson); (iii) 750,000 shares owned by Ionian Investments, Ltd., a trust that is maintained for the benefit of one of William Becker’s (son/grandson); and 20,833 shares held in the name of BGC Investments LLC, a Colorado limited liability company.

**Gary R. Brown owns 2,000 shares of our common stock individually.

***Michael Tracy’s beneficial ownership of 11,409,000 shares of our common stock is composed of 4,885,504 shares held in the name of Michael Trcy and 6,523,496 shares held in the name of Tracy Broadcasting Corporation, a wholly owned corporation of Michael Tracy.

**** Michael L. Glaser’s ownership of 1,432,554 shares of our common stock is composed of: (a) 816,533 shares owned by Michael L. Glaser individually; (b) 12,500 shares owned jointly by Michael L. Glaser and his wife, Catherine M. Glaser; and (c) 603,521 shares in the name of Michael L. Glaser IRA Rollover.

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ITEM 13. EXHIBITS AND REPORTS ON FORMS 8-K.

(a)    Exhibits

Exhibit
Number           Description

13.1 Settlement Agreement between the major shareholders of the Company and Nyssen LP, incorporated by reference to the Company’s Form 10-KSB for the year ended December 31, 2004 filed January 12, 2006.

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

We hereby incorporate the following additional documents by reference: (a) our annual report on Form 10-KSB for the year ended December 31, 2003 which was filed on June 9, 2004; and (b) our quarterly reports on Form 10-QSB for the quarters ended: March 31, 2004 which was filed on August 4, 2004, June 30, 2004 and September 30, 2004 were filed on December 16, 2005.

(b)    Reports on Form 8-K

June 14, 2004 filed on July 2, 2004

September 10, 2004 filed on September 14, 2004

September 16, 2004 filed on September 23, 2004

December 21, 2004 filed on December 21, 2004

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed and estimated unbilled for the fiscal year ended December 31, 2004 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements Included in our Form 10-KSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were $35,000.

The aggregate fees billed for the fiscal year ended December 31, 2003 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our Form 10-KSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were $30,000.

Other fees:

Audit-Related Fees
None.

Tax Fees $4,500.00

All Other Fees
None.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Telemetrix Inc.
By /s/ William Becker	February 23, 2006
William Becker, Chief Executive Officer
(Principal Executive Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ William Becker	February 23, 2006
William Becker, Chairman
By /s/ Gary Brown
Gary Brown, Director	February 23, 2006

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ATTACHMENT 3
Settlement Agreement

Binding agreement between the undersigned shareholders of
Telemetrix, Inc.

Definitions

Michael Glaser	“MG”
Michael Tracy	“MT”
MT and MT entities owning shares	“MT Ents”
Nyssen LP	“Nyssen”
Tower Gate Finance Limited	“TGF”
WB, LB and Becker entities owning shares	“Becker Ents”
together defined as	“the Shareholders”
William Becker	“WB”
Larry Becker	“LB”
Telemetrix, Inc.	“TLXT” or “the Company”
Matthew Hudson	“MH”
Piers Linney	“PL”

1.      Shareholder Agreement Terms

1.1      Parties

The parties shall be those shareholders that sign below, who are intended to be Becker Ents, MG, MT Ents, Nyssen, TLXT, and TGF. Where applicable, the parties agree to disclose all of their direct and indirect interests in the share capital of the Company. If any party does not sign, the agreement shall be binding amongst those that have signed, but any provisions relating to any party or party that has not signed shall not be binding between the signing parties and shall remain open for negotiation.

1.2      Board Structure

Interim board: Becker Ents, MG and MT hereby agree to vote to put in place the following interim board (the Interim Board”) upon, if it is required, approval of foreign ownership by the Federal Communications Commission. The parties agree that WB shall act as interim CEO until a full time CEO is hired. However the Chairman or CEO shall not have a costing vote, or any more influence than any other board member. Hence the four man board need to agree all matters by majority.

· WB (Chairman and interim CEO)

· LB

· PL

· MH

This board structure shall be put in place for TLXT and all subsidiary companies.

Ongoing board Becker Ents shall have the right to appoint two directors at any time (initially being WB and LB) and Nyssen/TGF shall have the right to appoint two directors at any time (initially being PL and MH) (together the “Investor Directors”) for as long as either group individually and respectively holds in excess of 25% of the common stock of the Company )calculated on an as-converted basis including conversion of any outstanding debt in the company where the conversion price is known). Each group shall be entitled respectively to appoint only one director for as long as they hold in excess of 15% of the common stock and up to 25% of the common stock. For the first 12 months and provided Becker Ents or Nyssen/TGF hold more than 25% of the common stock of the Company, either Becker Ents or Nyssen/TGF shall have the right to request that their two directors represent at least 50% of the board.

Page 1 of 8

This provision in the paragraph above relating to board composition, shall relate to TLXT and all of its subsidiaries, provided that the qualification percentages shall be calculated by reference to holdings of common shares in TLXT.

Becker Ents, MT, MG, Nyssen and TGF hereby agree to vote all shares held by them to ensure that the Investor Directors are always appointed in accordance with this agreement if Becker Ents or Nyssen and TGF wish to have appointees on the board.

The above agreement as to the appointment of Investor Directors shall cease as regards a group once either Becker Ents or Nyssen/TGF respectively, ceases to hold in excess of 15% of common stock in the Company.

However, the right to appoint Investor Directors shall not cease prior to the conversions mentioned below taking place and the funding of the loans set forth in section 3 below.

As well as the Investor Directors, other directors will be appointed in due course in good faith on the basis that their appointment is in the best interests of the Company.

1.3      Increasing Authorised Share Capital

Authorised Share Capital: Upon approval of foreign ownership by the Federal Communications Commission, if Section 310(b) limits apply, Nyssen and TGF shall request that the board resolves to convert amounts owed as follows:

Nyssen:	$1.6M to be converted at $0.04 per share into 40M new shares
TGF:	$0.8M fee converted at $0.04 per share into 20M new shares
LB:	$36,175 at $0.001 (par) in accordance with LB’s loan note

LB will receive 36,175,000 common shares on conversion of his loan note.

All MT Ents interests, except his $467,000 loan note, shall aggregate to no more than 42,594,678 common shares. MT Ents will be given a new note for $467,000 which will provide that the maturity date shall be fore twenty four (24) months from December 31, 2004 and that if the loan is not repaid by such date, as the option of the holder it may he converted into equity at $0.02 per share. The loan note shall bear simple interest at 10% per annum from December 31, 2004.

MG and Becker Ents agree that all of their preferred shares (if issued) shall be converted into common shares at equal value and the each shall request that the board takes action to effect such conversions. MT agrees that any shares issued to MT Ents without board approval shall be cancelled immediately.

MT is owed $55,850 for expenses, back rent on building, tower site and edgar filings through December 31, 2004. MT agrees to accept this being paid off by the Company at the rate of $5,000 per month. Other than these amounts each of the parties agree that no other amounts are due to them and to the extent that there is anything is owed to them by the Company it is hereby waived by the parties.

Page 2 of 8

1.5      Ligation and disputes

Any litigation or proposed litigation between the parties will cease immediately. Telemetrix shall dismiss its complaint against Nyssen/TGF without prejudice forthwith. Telemetrix shall dismiss its complaint against MT, WB and MG without prejudice forthwith. On completion of the conversions and issues of shares as set out in this agreement to Nyssen and TGF, Nyssen agrees to assign/transfer ownership of the Telos switch back to the Company.

2.      Interim Board Matters

The Interim Board shall consider and if thought fit approve:

2.1      Management Team and Employees

That the status of each employee is to be reviewed by WB who shall make recommendations to the board and the employment status of all employees that are to be retained is to be confirmed by letter as soon as possible.

That management required to service existing contracts or to close potential contracts shall be retained to ensure that revenues are pursued.

The board shall be asked to ensure that a clear and unequivocal operational management and reporting structure in place.

That the board shall confirm in writing to each of Kealy, Dineley, Girdler, Hull, Sullivan (and any other employees connected to them) that, other than in respect to any theft or financial fraud, that any current or proposed claims against them are dropped by the Company and will not be pursued in the future.

That the board shall confirm in writing to MT that, other than in respect of theft or fraud, all current claims against him are dropped and all claims relating to actions prior to the date of this agreement which may be considered in the future are waived in full and will not be prosecuted by or on behalf of the Company, in exchange for which immediately upon signing this agreement, MT agrees to resign as an employee of the company and an officer thereof. The new board shall agree consultancy terms with MT in so far as his services are required on an ongoing basis. PL shall be appointed to the board until FCC approval (if required) is granted in respect of the appointment of the Interim Board as set our in Section 1.2 of this agreement.

WB agrees not to vote on any board decisions without Nyssen’s consent until the Interim Board set out in Section 1.2 has been duly appointed, following, if it is required, approval of foreign ownership by the Federal Communication Commission.

MT Ents agree that, other than in respect of theft or fraud, all current claims against Nyssen, TGF, TLXt and its subsidiaries (other than the $467,000 note and the $55,850 expenses due to MT from TLXT as set out above in Section 1.4) are dropped and all claims relating to actions prior to the date of this agreement which may be considered in the future against the above or Becker Ents are waived in full and will not be prosecuted.

The parties agree that Shareholders or directors can be remunerated for their time and efforts as the board may determine from time to time.

2.2      Insurance

That the Company be immediately required to put in place appropriate insurance to protect directors and officers.

Page 3 of 8

2.3      Board Meeting Frequency

That the board shall meet (in person or by telephone) every month when the performance of the business against the business plan (see below) shall be reviewed.

2.4      Option Scheme

That an option scheme of 10% of the fully diluted share capital shall be put in place as soon as possible to incentivise existing and new management.

2.5      Business Location

That, in due course and cost permitting, all business activities and assets are to be migrated to a location agreed to by the board. The interim board shall also decide where the corporate headquarters are to be located.

The Company’s board or its representatives will notify MT and Tracy Broadcasting within 10 days of the date of signing of this agreement if it wishes to accept the terms of the lease(s) or rental agreements relating to the properties owned by MT or MT Ents as set out in the paragraph below. It is noted that as of the time of this agreement, the Company is in default of all existing lease agreements for non-payment, the proper notification of cancellation have been received by the Company and the Company is now operating on a month to month rental basis. Further the board understands that the Company had been notified to vacate the property as of December 31, 2004 and that MT or MT Ents are under no obligation to enter into any further agreements with the Company or extend existing month to month agreements past December 31, 2004.

However, as per Section 1.4 of the Agreement, the Company has agreed to repayment of MT and MT Ents outstanding expenses and back rents. Based on this Agreement, MT (or MT Ents as the case may be) hereby agrees to extend the tower agreement ($1,500 per month non-inclusive) and rental on the current office building in Nebraska ($3,000 per month non-inclusive) on a month by month basis with a thirty day notice provided by the Company to cancel to 31^st December 2005 assuming the payments are made on a timely basis.

2.6      Bank Accounts

That the main bank account shall be held near to the headquarters location. Other account (i.e. Nebraska) will be held for as long as they are required.

That the bank mandate is reviewed and approved by the new board and that payments over (or a series of connected payments amount to) $25,000 shall require board approval.

2.7      Business Plan and Reporting

The Shareholders shall request that the board and management prepare a business plan, including financials against which performance shall be measured on a monthly basis. This shall be done with the assistance of TGF.

The business plan shall be reviewed every 3 months by the board and TGF although performance shall be reviewed each month at board meetings.

2.8      FCC/SEC Approvals

That the board shall immediately take advice on the required FCC/SEC filings and/or authorities required to effect the contents of this agreement and shall immediately seek any consents that are required.

Page 4 of 8

That appropriate announcements are made to the market immediately and in due course once the reorganisation has taken place.

That all SEC/FCC filings shall be brought up to date and that, importantly, a filing is made with the SEC detailing the fact that the disputes have been settled.

2.9      Balance Sheet

That the internal accountant, CFO and, if necessary, auditors be requested to provide a detailed report on the balance sheet so that it can be cleaned up.

3.       Ongoing Financing and Final Share Capital

TLXT requires immediate access to new finance to avoid insolvency. It will then require further financing until the business is profitable and its accounts are cleaned up before a new equity financing can be attempted. Nyssen and Becker Ents shall be under no obligation to invest any sum whilst MT is a director of the Company.

3.1      Emergency Financing

On the agreement to legally binding documentation, including appropriate shareholder resolutions and filings, WB and his affiliates shall provide $200,000 of emergency new finance at 2 cents per share, equating to a further issue of 10,000,000 common shares. Nyssen agrees to provide $100,000 of emergency funding at 2 cents per share resulting in the issue of a further 5,000,000 common shares and $100,000 at 10 cents per share resulting in the issue of 1,000,000 common shares.

3.2      Medium Term Financing

The Shareholders shall propose to the board that it should see whether it can refinance the Telos switch. However, the parties agree that due to the company’s financial state (and recent SEC filings) this may prove to be difficult.

Provided that the conversions, share issuances, board changes and other matters set out in this agreement are completed and there is a business case agreed by the board, Nyssen shall invest a further $100,000 at 10 cents per share resulting in the issue of 1,000,000 common shares and WB Ents shall also invest a further $100,000 at 10 cents per share resulting in the issue of 1,000,000 common shares.

It shall be proposed to the board in due course that is should consider whether any additional funding shall be sought from third party equity sources or from Nyssen or WB Ents.

3.3      Final Share Capital

Following completion of the matters in this agreement, the parties agree that the share capital shall be as follows:

Page 5 of 8

Telemetrix Share Structure

Debt Conversion:	LB converts existing debt at $.00l cents per share as per terms of $30,000 note.
Immediate Financing -	Becker Group invests $200,000 @ $.02 cents per share.
	Nyssen Group invests $100,000 @ $.02 cents per share and
	$100,000 @ $.10 centers per share.
Medium Term Financing -	Nyssen & Becker Group invests $200,000 @ $.10 cents per share
	as part of offering.
Additional Financing -	Next round raised on 3rd party financing @ $.10 per share or higher
	alternatively continued financing from Becker and Nyssen Group
	@ $.10 per share or higher.

Investors	Share Number before debt conv	% ownership before debt conv	Share Number after debt conv	$ Invested	Additional   Shares	Total Share Number	% ownership
William Becker	7,824,504	6.21%	7,824,504
WB Funding @ $0.00				$200,000	10,000,000
WB Funding @ $0.10				$100,000	1,000,000	___________
						18,824,504	10.44%
Michael Tracy	42,594,678	33.79%	42,594,678			42,594,678	23.63%
Larry Becker	5,521,332	4.38%	5,521,332
LB Debt $34.5K @ 0.1 cents			36,175,000			__________
						41,696,332	23.13%
Michael Glaser	6,791,754	5.39%	6,791,754			6,791,754	3.77%
Nyssen Group	60,000,000	47.60%	60,000,000
Nyssen Funding @ $0.00				$100,000	5,000,000
Nyssen Funding @ $0.10				$200,000	2,000,000	___________
						67,000,000	37.17%
Other	3,326,100	2.64%	3,326,100			3,326,100	1.85%
Total Shares	126,058,368	100.00%	162,233,358	$600,000	18,000,000	180,233,368	100.00%

The parties agree to work together in good faith to effect the above structure as soon as possible.

4.      Other Matters

4.1      Immediate Contract Recovery Plan

The Shareholders shall recommend to the board that it shall review all pending contracts and ensure that resources are available to secure profitable contracts, especially the Flash contract.

The Shareholders shall recommend to the board that current and outgoing employees may be incentivised to get the Flash contract signed.

The parties shall work together in good faith to secure the existing customer contracts. The parties also agree to investigate a customer relationship or merger with Skypatrol and recommend that the board does so too.

4.2      Timing

The parties agree to work in good faith to execute the above matters as soon as possible and to seek the agreement of all intended parties, including Becker, Nyssen, TGF, MG and MT Ents. Assuming that the interim board changes will not require a shareholder vote, the interim board is to be appointed within two days of execution of this agreement.

The board shall review all legal costs of the parties and agree what proportion the company will pay.

Delaware State Law shall apply to this agreement.

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This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Dated: 30th November 2004

Agreed to by:

/s/ William Becker	/s/ Christine Becker
William Becker	Christine Becker
/s/ William Becker	/s/ William Becker
President	Its Authorized Representative
Hartford Holdings	Wyse Investments Ltd.
/s/ Larry Becker	/s/ Larry Becker
Larry Becker	Larry Becker
	Its Authorized Representative
	BGCI Investments Inc.
/s/ Larry Becker	/s/ S. Alan Milgate
Larry Becker	S. Alan Milgate
Its Authorized Representative	Its Authorized Representative
Becker Capital Management LLC	Vintage Investments Ltd
/s/ S. Alan Milgate	/s/ S. Alan Milgate
S. Alan Milgate	S. Alan Milgate
Its Authorized Representative	Its Authorized Representative
Ionian Investments	Ardara Investments Ltd.
For and on behalf of Bluejay	For and on behalf of Bluejay
Investments, Ltd., Director	Investments, Ltd., Director

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/s/ Mathew Hudson	/s/ Piers Linney
Mathew Hudson	Piers Linney
As director of Nyssen Limited	For and on behalf of
Being the GP of Nyssen LLP	Tower Gate Finance Limited
/s/ Michael Glaser	/s/ William Becker
Michael Glaser	William Becker
	Telemetrix Inc.
	Its Authorized Representative
/s/ Michael Tracy	/s/ Michael Tracy
Michael Tracy	Michael Tracy
For and on behalf of
Tracy Broadcasting Corporation

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