Summary of O2 SECURE WIRELESS, INC.

Item 2. Management Discussion and Analysis

The following discussion should be read in conjunction with the Company's unaudited consolidated interim financial statements and related notes thereto included in this quarterly report and in the Company's audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") contained in the Company's Form 10-K for the year ended September 30, 2008. Certain statements in the following MD&A are forward looking statements. Words such as "expects", "anticipates", "estimates" and similar expressions are intended to identify forward looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

In the third quarter of fiscal year 2009, ended June 30, 2009, the Company's billable revenues increased compared to the revenues collected in the previous quarter ended March 31, 2009. Expenses and accounts payable both significantly declined in the third fiscal quarter ended June 30, 2009 as compared to the previous quarter.

In the third quarter of fiscal year 2009, the Company posted its lowest net loss and its highest net margin since inception. Expense control is the primary reason for these results. However, revenue growth has not been satisfactory, and the Company has taken steps to address and remedy that situation.

The former CEO, Mr. Craig C. Sellars, resigned from O2 Secure Wireless, Inc. during the third fiscal 2009 quarter in order to pursue other opportunities. The former Executive Director of Marketing also left the Company during the quarter. Returning to O2 Secure Wireless, Inc. as CEO is Mr. Scott Conley, a Founder and former CEO of the Company. Mr. Conley assumed his duties as CEO immediately after the resignation of Mr. Sellars.

Under the leadership of Mr. Conley, the Company intends to implement a disciplined, aggressive and effective marketing strategy to increase customers and improve customer service and satisfaction. The primary business plan remains the same: to provide wireless Internet access in high density residential areas, college campuses, and small businesses.

The Company has been challenged since its inception by high expenses, but it continues to engage that challenge. The Company initially marketed to both the property owners and the residents of the property (the "Subscriber Model"). The Company now emphasizes direct marketing to the property owners, offering them a revenue sharing arrangement (the "Amenity" Model). Also, the Company initially paid up front for installations. Now, the Company shares installation costs with the property owners.

In the early years, and especially after becoming a publicly traded company, O2 Secure Wireless, Inc. incurred heavy debt mainly as a result of utilizing the professional services of Accountants, Attorneys, and Auditors. While these services were both necessary and beneficial to the Company, the cash flow did not match the fees. As a consequence, heavy debt for professional services rendered has accumulated on the Company's balance sheet. The positive note here is that reliance by the Company on frequent outside professional service assistance has declined, and the rate of growth of the related debt has significantly diminished. The Company intends to work out payment plans with its professional services providers to eliminate the debt balances as soon as is reasonably possible.

Working out debt payment plans is a tactic that also applies to other needed vendors that the Company currently utilizes. Here again, the objective is to reduce the debt balance over time. O2 Secure Wireless, Inc. has become smarter in terms of selecting the best vendors and acquiring the optimum combination of quality and quantity when purchasing equipment and supplies. With regard to the latter, the Company now avoids over stocking equipment and supplies, and is now very careful to avoid the risk of equipment obsolescence.

The Company has unfortunately lost a few properties in North Carolina and Tennessee primarily due to a lack of strong customer service. Under the guidance of the current CEO, Mr. Scott Conley, customer service and satisfaction have once again become the primary objective. The Company is presently involved in frequently visiting its existing properties and addressing any concerns or maintenance issues immediately. The acquisition of new business is a strong goal of the Company, but so too is the retention of its existing customers.

O2 Secure Wireless, Inc. has a sound business plan and the talent to successfully implement the plan. Unfortunately, the Company has amassed a very large debt load.

What is needed, and what has been sorely lacking, is a strong sales effort and customer service focus designed to retain and expand existing business while simultaneously seeking out and bringing in new business.

The Company needs an infusion of external capital to enable it to more readily reduce its debt load, purchase equipment, and add capable and reliable talent to its staff, particularly in the areas of marketing and sales, customer service, and engineering. Additionally, the Company is not averse to developing strategic partnerships with other entities in the same vertical provided that there is similarity in business objectives, values and ethics.

Liquidity

The Company's working capital deficit increased to approximately $680,534 at June 30, 2009 an increase of approximately $35,590 compared to March 31, 2009. The working capital deficit has increased compared to the previous quarter's growth, and could continue to do so in future quarters.

To address its outstanding liabilities, the Company intends to continue working to refine its revenue and expense models to address any shortage of cash while addressing the best use of the Company's existing capital resources, especially positive cash flow as it comes available. The Company continues to work with its vendors on payment schedules and debt reduction that have helped reduce some outstanding accounts payable for the quarter, and the Company will continue this effort.

Some outstanding liabilities that cannot be reduced quickly enough may result in penalization such as finance charges or suspension of services. Suspension or termination of some bandwidth provided to properties may reduce the overall level of service to the Company's customers until a suitable replacement can be provisioned. The Company has implemented procedures to reduce the likelihood of such events occurring and believes it has alternatives in place to respond to those events, but the Company can provide no guarantee that such events can be completely avoided under all circumstances. To date, some alternatives described above have been implemented and all services continued to be offered with little or no interruption.

As was stated in previous quarterly and yearly reports, the Company continues to pursue additional revenue from its traditional business models. The Company continues to see many of its recurring expenses decrease. The Company continues to seek external capital.

Results of Operations

Three and Nine Months Ended June 30, 2009 and 2008

During the 3-month period ended June 30, 2009 and 2008, the Company generated $108,502 and $149,545 of revenues, respectively, and incurred net losses of ($99,769) and ($71,935), respectively. This is a decrease in revenues of 27% over the same 3-month period last year and also an increase of 39% in overall net loss compared to the same 3-month period last year. During the 9-month period ended June 30, 2009 and 2008, the Company generated $306,466 and $411,977 respectively, and incurred net losses of ($323,863) and ($515,995) respectively. This is a decrease in revenues of 26% over the same 9-month period last year, but also a 37% decrease in overall net loss compared to the same 9-month period last year. For the 3 and 9-month periods ended June 30, 2009, the Company received revenue from fourteen operational networks versus fifteen during the same period in the prior year.

The Company's net loss for the periods ended June 30, 2009 is in line with its overall expense decrease, compared to the same periods ended the prior year.

Operational and administrative changes were instituted within the past 12 months and are intended to continue in order to support the initiatives pursued by management to increase business activity.

Cash from operations was used to satisfy some, but not all outstanding accounts payable liabilities. The Company intends to continue paying down outstanding liabilities, when possible, until they reach a satisfactory level. Based on the Company's continued losses and negative cash flows, there can be no assurance that the Company will be able to satisfy its payables.

There was an increase in the overall current liabilities of the Company due to an increase in accrued liabilities. Those accrued liabilities consist of $64,800 of a note payable to a related party, $38,789 notes payable to unrelated party plus interest, and $21,050 unsecured loans payable to related-parties, and additional accrued expenses to related parties in the amount of $27,356, which combined comprise 22% of the Company's total liabilities. Accounts payable and accrued expenses, increased from $530,272 at March 31, 2009 to $547,660 at June 30, 2009, representing an increase of 3%. This increase was the result of a tight cash position during the second and third periods of this fiscal year and also penalties and interest associated with delinquencies related to payroll taxes.

Significant expenses during the three-month period ended June 30, 2009 and 2008 were as follows:

Professional fees represent expenses necessary for outside accounting, audit, legal and transfer agent fees, a majority of which relate to legal and regulatory compliance. For the three-month period ended June 30, 2009, the Company's professional fees expense was $17,131. This three-month period represented a substantial 38% decrease in professional services expenses over the previous three-month period ending June 30, 2009, which was $12,431.

Company management is encouraged by the partial stabilization that has occurred over previous quarters, while acknowledging the struggle as it continues to address the challenges and difficulties to overcome. Of those challenges, the accrued liabilities and increasing capital deficit relative to revenue increases continues to be the primary focus, followed by the overall decrease in revenues. The Company's expectations have not been completely met during the previous quarter, and are still being approached this quarter, but also not met. In this regard, the Company believes that stabilization might occur if operating cash flow becomes consistently positive with no growth in vendor payables. There has not been, and there can be no assurance that the Company will ever reach profitability or a positive cash flow position without additional changes to its business structure, business plan, or sales efforts.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Disclosure Regarding Forward Looking Statements and Safe Harbor

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (Forward Looking Statements"). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company's operations, may from time-to-time issue certain statements, either in writing or orally, which contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company's proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors (Important Factors") and other factors that could cause actual results to differ materially from the Company's expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company's expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.