UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

For the quarterly period ended: December 31, 2011

For the transition period from ________ to _________

Commission File Number: 000-53677 

CIG WIRELESS CORP.

(Exact Name of Registrant as Specified in its Charter)

Five Concourse Parkway, Suite 3100

Atlanta, GA 30328

(Address of principal executive offices)

(678) 332-5000

 (Registrant's telephone number, including area code)

N/A

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: The Issuer had 19,766,610 shares of Common Stock, par value $0.00001, outstanding as of February 17, 2012.

CIG WIRELESS CORP.

FORM 10-Q

December 31, 2011

INDEX

PART I-- FINANCIAL INFORMATION

PART II-- OTHER INFORMATION

SIGNATURES

2

PART I – FINANCIAL INFORMATION

ITEM 1.                FINANCIAL STATEMENTS

Index to Unaudited Consolidated Financial Statements

3

CIG Wireless Corp.

Consolidated Balance Sheets

(Unaudited)

4

CIG Wireless of Operations

(Unaudited)

(A)    The acquisition of Communications Infrastructure Group, LLC by CIG Wireless Corp. closed on December 5, 2011 (see Note 3 to the consolidated financial statements).

5

CIG Wireless Corp.

Consolidated Statements of Stockholders’ Equity

(Unaudited)

(A) The acquisition of Communications Infrastructure Group, LLC by CIG Wireless Corp. closed on December 5, 2011 (see Note 3 to the consolidated financial statements).

6

CIG Wireless Corp.

Consolidated Statements of Cash Flows

(Unaudited)

(A)    The acquisition of Communications Infrastructure Group, LLC by CIG Wireless Corp. closed on December 5, 2011 (see Note 3 to the consolidated financial statements).

7

CIG Wireless Corp.
Notes to Unaudited Consolidated Financial Statements

Note 1:   Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of CIG Wireless Corp. and its subsidiaries (the “Company” and “CIG Wireless”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s September 30, 2011 Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year end September 30, 2011 as reported on Form 10-K, have been omitted.

Losses Allocated to Related Party Investors

The Company has entered into six Atypical Silent Partnership Agreements with related party limited partnership investors which made loans to the Company for acquisition of tower assets which are segregated on the books by investment group. Profits from these towers are allocated to the related party investors until they obtain designated rates of return of between 8 – 20%. Once the rates of return are obtained by the related party investors, subsequent profits are allocated based upon ownership. Operating expenses and losses from these towers are 100% allocated to the investors until there is a net profit.

The losses allocated to these related party investors are reflected in the statements of operations in “losses allocated to related party investors.” The total losses allocated during the period from December 1, 2011 through December 31, 2011, the period from October 1, 2011 through November 30, 2011 and the three months ended December 31, 2010 were $306,068, $612,137 and $1,638,690, respectively.

Note 2:  Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting which contemplates continuity of operations, realization of assets, liabilities, and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has a working capital deficit as of December 31, 2011. As shown in the accompanying financial statements, the Company has also incurred significant losses since inception. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. There is no assurance that management will be successful in raising additional funds. As of the date of this report, management is involved in negotiations with several different financing partners in and outside of the United States of America and reasonably expects positive developments and results within the weeks and months to come.

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Note 3:  Acquisitions

On October 7, 2011, CIG Wireless acquired all membership interests in CIG Services, LLC, from Communications Infrastructure Group, LLC (“CIG LLC”) for nominal consideration. CIG Services, LLC was formed by CIG LLC on September 23, 2011 as a wholly-owned subsidiary.  No allocation of the purchase price table is presented because there were no assets or liabilities as of the acquisition date.

On December 5, 2011, CIG Wireless acquired 100% of the membership interest in CIG, LLC from BAC Berlin Atlantic Holding GmbH & Co. KG for 750,000 common shares. Both parties agreed, for the convenience of month end closing procedures, to account for the acquisition as if it occurred on November 30, 2011. The results of operations and cash flows obtained through the use of November 30, 2011, rather than December 5, 2011, are not considered to be materially different.

The purchase price for the acquisition of CIG LLC was $75,000 consisting of the 750,000 common shares issued and valued using the market trading price on the closing date of the acquisition.

The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below.

The consolidated financial statements herein are presented under predecessor entity reporting and because the acquiring entity had no operations, prior historical information of the acquirer is not presented.

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Note 4:  Asset Retirement Obligations  

The changes in the carrying value of the Company’s asset retirement obligations are as follows:

Note 5:   Long-term Subordinated Obligations to Related Parties

Between November 2009 and February 2010, the Company entered into six Atypical Silent Partnership Agreements with related party limited partnership investors which made contributions to the Company for acquisition of tower assets which are segregated on the books by investment group. No separate legal entity was created through these agreements. The investment agreements all have similar terms, conditions, and termination dates as defined in the agreements. Termination dates range from December 31, 2014 through September 30, 2015.  On each such termination date, each respective investor may elect termination of the arrangement and the Company must then make distributions.  Because these are mandatory variable repayment obligations occurring on each termination date, the net obligations to these investors are accounted for as long-term subordinated obligations.  Management fees, origination fees and interest charged to the investors and third-party consulting and other revenue received by the Company not related to the tower ownership or operations are segregated as Company revenue with minimal or no offset by Company overhead expenses.

Except for each termination date, the Company has sole discretion on whether to pay any proceeds from operations or tower sales to the investors.

The following is a summary of the net profits and liquidation interests of the six investors::

Profits are allocated to the related party investors until they obtain designated rates of return of between 8 – 20%. Once the rates of return are obtained by the related party investors, subsequent profits are allocated based upon ownership. Losses are 100% allocated to the investors until there is a net profit.

Infrastructure Asset Management GmbH (IAM) is the general partner of IT2, ITAP, IT5, IT7, ITP9 and was related to the Company through common ownership until August 3, 2011 when IAM was sold to Enex Group Management, SA. (Enex).  Enex bought 8% of CIG in October 2011 and it has shared a Chief Financial Officer with the Company since that date.

Note 6:   Related Party Transactions

The Company shares services with related parties and is allocated a proportionate share of the associated expenses and overhead.  During the period from December 1, 2011 through December 31, 2011, the period from October 1, 2011 through November 30, 2011 and the three months ended December 31, 2010, total allocated expenses were approximately $22,419, $44,839 and $452,242, respectively.

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Accounts receivable from related parties consisted of the following at:

Accounts payable to related parties consisted of the following at:

Some of the related party payables bear interest at rates ranging from 5.5% to 12.1% per annum. Interest expense to related parties totaled $2,522, $4,121 and zero during the period from December 1, 2011 through December 31, 2011, the period from October 1, 2011 through November 30, 2011 and the three months ended December 31, 2010, respectively. 

The Company also assists certain investment partners who are related parties in the identification and acquisition of tower assets including towers and tower sites.  The Company locates and purchases (or builds) the tower assets and later sells the towers to the related parties at agreed-upon terms upon ultimate funding of the related parties.  In connection with the purchase of tower assets to be sold to related parties, the Company charges origination fees of 5% of the purchase price of the tower assets payable upon completion and funding of the transaction by the related party.  The Company also charges interest to the related parties for the period the identified assets are owned and held by the Company. During the three months ended December 31, 2010, origination fees revenue totaled $54,804. There was no origination fees revenue during 2011. Related party interest income totaled $45,223 during the three months ended December 31, 2010. There was no related party interest income during 2011.

During the three months ended December 31, 2011, the Company sold 1 tower to an affiliate, InfraTrust Acht GmbH & Co. KG (IT8), for cash proceeds of $344,246 resulting in a gain on the sale of $83,750. The gain was allocated to the investors through the losses allocated to related party creditors in the statement of operations.

During the three months ended December 31, 2010, the Company sold 3 towers to an affiliate, InfraTrust Acht GmbH & Co. KG (IT8) for cash proceeds of $1,096,058 resulting in a gain on the sale of $49,805. The gain was allocated to the investors through netting against the overall operating losses allocated to the investors.

The Company receives management fees from its investment partners based upon the annual contributions made by each partner and from affiliated companies for managing the telecommunication towers. Management fees from investment partners are accounted for against the long-term subordinated obligations owed to these investment partners and totaled $8,284, $16,567 and $24,851 during the period from December 1, 2011 through December 31, 2011, the period from October 1, 2011 through November 30, 2011 and the three months ended December 31, 2010, respectively.

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Note 7:   Notes payable to related parties

On August 8, 2011, the Company borrowed $100,000 from ENEX Group Management SA. The funds borrowed are unsecured, with interest at 3% and shall be due and payable within thirty days of demand.

On December 15, 2011, the Company borrowed $1,000,000 from ENEX Group Management SA. The funds borrowed are unsecured, with interest at 4% and shall be due and payable within thirty days of demand.

On October 2, 2010, the Company borrowed approximately $10,000 from CRG Finance AG. In early 2011, the Company borrowed $25,000 from CRG Finance AG. The loans are due upon demand and bear interest at 10.0% per annum.  The outstanding balance on these notes payable totaled $34,544 as of December 31, 2011.

The total due under the above notes including accrued interest is $1,145,960.

Note 8:   Stockholders’ Equity

On October 4, 2011, a 4-for-1 stock dividend was paid. All share and per share amounts herein have been retroactively restated to reflect this dividend.

On October 3, 2011, Ms. Shostak, the Company’s former president and sole Director, sold 11,500,000 shares of common stock to two purchasers in a private transaction.  Ms. Shostak simultaneously tendered and cancelled 13,500,000 shares of common stock pursuant to a Share Tender and Cancellation Agreement, by and between the Company and Ms. Shostak. 

Ms. Shostak sold her shares to Wireless Investment Fund AG, a Swiss investment company (“WIF”), and ENEX Capital Partners AG, a Swiss investment company (“ENEX Capital”).  WIF acquired 10,000,000 shares of common stock from Ms. Shostak at an aggregate purchase price of $43,478 and ENEX Capital acquired 1,500,000 shares for an aggregate purchase price of $6,522.  After giving effect to such stock transfers and cancellations, there were 18,008,500 shares of common stock issued and outstanding, of which WIF owned 55.5% and ENEX Capital owned 8.3%. 

On October 7, 2011, the Company sold to a Delaware investment company 1,000,000 shares of Series A 4% Convertible Redeemable Preferred Stock, par value $0.00001 per share, at $2.00 per share, resulting in an aggregate of $2,000,000 in proceeds.  This preferred stock, including $16,301 in accrued dividends, was converted into 1,008,110 common shares on December 23, 2011.

On December 5, 2011, the Company issued 750,000 common shares to acquire CIG, LLC (see Note 3).

As of December 31, 2011, the Company had an aggregate of 100,000 common stock options outstanding. The options are exercisable at $3.75 per share, expire on November 30, 2014 and vest on November 30, 2012. The remaining fair value of the awards totaling $112,619 will be expensed over the remaining vesting period.

Note 9:   Subsequent Events

On February 6, 2012, Mr. Paul McGinn was appointed as the Chief Executive Officer and as a Member of the Board of Directors of the Company. On January 27, 2012, the Company entered into a binding term sheet with Mr. McGinn covering the terms and conditions of his services, including compensation arrangements.  The terms and conditions of such binding term sheet were set forth in a Current Report on Form 8-K, filed by the Company with the U.S. Securities and Exchange Commission on February 3, 2012, and such Current Report is incorporated herein by reference thereto. The Company and Mr. McGinn intend to enter into a customary long form employment agreement as soon as reasonably possible. 

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ITEM 2.                MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Report”). This Report contains certain forward-looking statements and the Company's future operating results could differ materially from those discussed herein. Certain statements contained in this Report, including, without limitation, statements containing the words “believes”, “anticipates,” “expects” and the like, constitute “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 (the “Exchange Act”). However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act.

Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to CIG Wireless Corp.

Corporate Information

CIG Wireless Corp. (formerly known as Cyber Supply Inc.) was incorporated in the State of Nevada on February 12, 2008.  During the fiscal year ended September 30, 2011, the Company began considering a new business model involving the development and managing of wireless infrastructure for wireless carriers.  The Company had originally focused on the development of a web-based supply business, however, the Company subsequently determined that its original business model was not viable and the Company suspended operations pending review and assessment of other possible business endeavors.  

For most of the fiscal year ended September 30, 2011, Ms. Maria Shostak served as the Company’s sole officer and director.  On August 8, 2011, Ms. Shostak resigned as an officer of the Company, however she remained as a director of the Company until her resignation on October 5, 2011.  On August 8, 2011, Mr. Sebastien Koechli was appointed as a member of the Board of Directors of the Company, and as the Company's President and Chief Executive Officer, and Mr. Romain Gay-Crosier was appointed as the Company's Treasurer and Chief Financial Officer. 

On September 23, 2011, the Board of Directors of the Company declared a stock dividend applicable to all stockholders of the Company as of the close of business on the record date of October 3, 2011.  Such stock dividend was paid on October 4, 2011.  Each stockholder of the Company as of the record date received four (4) additional shares of the Company’s common stock for each one (1) share of the Company’s common stock held as of the close of business on the record date.  Holders of fractions of shares of the Company’s common stock received a proportional fractional number of shares. 

On October 3, 2011, Ms. Shostak sold 11,500,000 shares of common stock to two purchasers in a private transaction.  Ms. Shostak simultaneously tendered and cancelled 13,500,000 shares of common stock pursuant to a Share Tender and Cancellation Agreement, by and between the Company and Ms. Shostak (these share numbers have been proportionately adjusted to reflect the effect of the share dividend). 

Ms. Shostak sold her shares to Wireless Investment Fund AG, a Swiss investment company (“WIF”), and ENEX Capital Partners AG, a Swiss investment company (“ENEX Capital”).  WIF acquired 10,000,000 shares of common stock from Ms. Shostak at an aggregate purchase price of $43,478 and ENEX Capital acquired 1,500,000 shares for an aggregate purchase price of $6,522.  After giving effect to such stock transfers and cancellations, there were 18,008,500 shares of common stock issued and outstanding, of which WIF owned 55.5% and ENEX Capital owned 8.3%.  Subsequent to this change in control, the Company issued 1,000,000 shares of preferred stock and 750,000 shares of common stock, as described below.

On October 5, 2011, Mr. Gabriel Margent was appointed to the Company’s Board of Directors. On November 28, 2011, the Company appointed Mr. Gert Rieder to the Board of Directors.  Mr. Sebastien Koechli resigned as the Chief Executive Officer of the Company and the Board of Directors appointed Mr. Akram Baker to serve as the Chief Executive Officer.  Mr. Koechli continues to serve the Company as President and Chairman of the Board. 

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On February 6, 2012, Mr. Paul McGinn was appointed as the Chief Executive Officer and as a Member of the Board of Directors of the Company.  On January 27, 2012, the Company entered into a binding term sheet with Mr. McGinn covering the terms and conditions of his services, including compensation arrangements.  The terms and conditions of such binding term sheet were set forth in a Current Report on Form 8-K, filed by the Company with the U.S. Securities and Exchange Commission on February 3, 2012, and such Current Report is incorporated herein by reference thereto.  The Company and Mr. McGinn intend to enter into a customary long form employment agreement as soon as reasonably possible. 

In connection with the appointment of Mr. McGinn as the new CEO of the Company, effective as of February 6, 2012 Mr. Akram Baker resigned as the Chief Executive Officer of the Company.  Mr. Baker also resigned from his officer positions of the Company’s subsidiaries effective upon his resignation as CEO of the Company. On February 8, 2012 Mr. Baker was appointed to the Board of Directors of the Company. 

On November 29, 2011, the Company changed its name from “Cyber Supply Inc.” to “CIG Wireless Corp.” to reflect its new business operation. The Company’s common stock is now traded on the over the counter bulletin board under the symbol “CIGW.OB.”

On October 7, 2011, the Company entered into an acquisition agreement pursuant to which the Company acquired all membership interests in CIG Services. CIG Services was formed to provide comprehensive management and support services with respect to the operations, administration and management of cell phone towers.  Further information regarding the CIG Services acquisition is set forth in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 11, 2011 , which is incorporated herein by reference thereto.

On December 5, 2011, the Company entered into a Limited Liability Company Membership Interests Purchase Agreement (the “LLC Purchase Agreement”) with CIG Properties, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“CIG Properties”), BAC Berlin Atlantic Holding GmbH & Co. KG, a German Kommanditgesellschaft (“BAC Berlin”), and Communications Infrastructure Group, LLC (the “CI Group”).  BAC Berlin sold one hundred percent (100%) of the membership interests of the CI Group (the “Membership Interests”) to CIG Properties.  Further information regarding the CI Group transaction is set forth in the Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 7, 2011, which is incorporated herein by reference thereto.

As of the date of filing of this Report, the Company is fully engaged in the business of the management of towers and other wireless infrastructure. The Company now conducts its business and all operations through the CI Group.  In addition, the Company has moved its offices to Five Concourse Parkway, Suite 3100, Atlanta, GA 30328.  The Company’s new telephone number is (678) 332-5000.  The Company has adopted September 30^th as its fiscal year end. Previously, the Company’s fiscal year end was February 28^th.

Results of operations

Accounting Survivor

The CI Group is the accounting survivor of the Company’s acquisition of the CI Group.  As a result, all comparative information that follows refers to the results of operations for the CI Group.

Background

The CI Group (Communications Infrastructure Group, LLC) is a limited liability company and was formed on July 24, 2009 under the Delaware Limited Liability Act for the purpose of investing in telecommunication towers throughout the United States of America and subsequently leasing space on the towers to major wireless and broadband carriers.  The CI Group’s offices are located in Atlanta, Georgia.

About The CI Group

The CI Group rents antenna and other equipment space on its towers on the basis of long term contracts with wireless carriers, governmental and public entities and utilities.  The towers are either acquired on the open market or through the successful awarding to the CI Group of carrier tower projects.

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The CI Group currently owns 40 wireless communications towers that are online and in commercial service with one or more antenna tenants.  The CI Group also owns six additional wireless communications towers that are currently in various phases of construction and which are expected to be completed with on-line antenna tenants prior to the end of the first calendar quarter 2012. 

The legal and economic interests in four of the six wireless towers under construction are legally and beneficially owned solely by the CI Group. 

The economic interests in the remaining 42 wireless communications towers owned by CI Group, although legally owned by CI Group, are currently subject in their entirety to the rights of certain third party investment funds (collectively, the “Compartment LPs”).  The Compartment LPs participation rights in the Company extend only to the revenues derived specifically from the 42 towers, as well as the proceeds upon any sale or disposition of the towers.  The Compartment LPs do not participate in any other equity or revenues of the Company and their participation interests in the towers are subordinated to creditors of the Company.  The Compartment LPs with interests in the 42 CI Group towers are not shareholders of the Company.   

In addition to the aggregate of 46 wireless communications towers legally owned by CI Group, the CI Group also manages 32 additional towers for third parties. 

In total, the CI Group currently manages 78 wireless communications towers.

The CI Group manages, develops, and markets rooftop space in New York City and Athens, GA. The CI Group believes that it is in a strong position to develop this business line through aggressive marketing and pricing.  The majority of CI Group’s towers can accommodate more than one tenant which can facilitate supplemental revenue streams without incurring additional capital costs. 

The CI Group plans to move into the business of Distributed Antenna Systems (“DAS”) in 2012. The CI Group DAS development program is currently underway in conjunction with a major property owner in New York. 

The CI Group regularly bids for Carrier Build-to-Suit tenders (“BTS”) and has won nine such tower bids through the date of this Report.  Eight of the BTS projects were for major regional carriers in the Southern California market, and one was for a major regional carrier in the Alabama market. Five of the California BTS tower projects were withdrawn by the CI Group and returned to one of the carriers because they were deemed too high in risk by CI Group’s management.

Subsequent to the period covered by this Report, two new tower bids were won during the month of January 2012.  Both of the bids were for towers to be constructed for a major regional carrier  in the Alabama market.

The tower business is not seasonal. However, the availability of towers for acquisition on the market varies greatly.

The CI Group, like all of its competitors, is bound to the tower build plans of the various carriers, which are subject to numerous variables outside control of the CI Group, including the general economy, carrier cash flow, regulatory issues, and consolidation of the wireless industry.

The CI Group deploys its working capital for the acquisition of third party towers on the open market or for the construction costs of BTS. Working capital is also used for marketing purposes. Additionally, working capital is used to develop and market search rings, which are locations which have been identified as prime candidates for the placement of cell phone towers, roof top systems or DAS.

The CI Group is reliant, to a large extent, on the wireless carriers build and search ring development plans. Possible consolidation in the industry plays a significant role in carrier builds and lease ups. Government agencies (such as Homeland Security, local police and fire departments, and port authorities) in addition to utilities, provide potential supplementary tower facilities’ leasing income.

Steel is the major raw material used in the construction of the towers. The CI Group uses leading contractors to carry out the actual building of the towers.

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Tower Management Operations

The CI Group manages, develops, owns, leases and operates cell phone towers and other wireless infrastructure.  The Company’s wholly owned subsidiary CIG Services provides all administration management and operation services on behalf of the CI Group.

CIG Services has entered into seven Tower Management Agreements (each a “Tower Management Agreement”) with various parties owning (i) cell phone or wireless transmission towers (the “Tower Owners”); or (ii) the economic interests of cell phone or wireless transmission towers (the “Tower Interest Holders” and referred to collectively herein with the Tower Owners as the “Tower Proprietors”).  During the respective term of each Tower Management Agreement, CIG Services, as manager, shall perform functions necessary to maintain, market, operate, manage and administer the tower sites of the Tower Proprietors.  The initial terms of the various Tower Management Agreements are expected to expire between December 31, 2014 and June 30, 2018.  Each Tower Proprietor shall pay a base management fee to CIG Services.  The base management fees applicable to each Tower Proprietor may vary significantly depending on the specific terms and conditions negotiated with each Tower Proprietor.  The Tower base management fees are expected to be paid in quarterly installments.  CIG Services may also in certain circumstances be eligible to receive ancillary compensation in consideration for procuring new tenants on tower sites, whereby CIG Services would receive a small percentage of the aggregate net rent for the initial term of each such new lease.

Ring Development License Agreement

On October 7, 2011, CIG Services (“Licensee”) and BAC-CIG, LLC (“Licensor”) entered into a Search Ring License & Service Agreement (the “Ring Development Agreement”).  The Licensor holds all right, title and interest and/or indirect economic interests, to a portfolio of search rings (collectively, the “Search Ring Assets”).  The Ring Development Agreement grants CIG Services an exclusive license to utilize the Search Ring Assets to develop, construct and market telecommunication tower and infrastructure assets (“Future Tower Assets”).  The Ring Development Agreement expires on December 31, 2012, subject to extension upon mutual consent of the parties.  The Ring Development Agreement provides that the Licensor will be paid a license fee of 70% of the net profits collected by Licensee through the exploitation, distribution, construction, sales, servicing and/or marketing of Search Ring Assets or Future Tower Assets.  Under the terms of the Ring Development Agreement, the Licensor contributed an aggregate of $2,000,000 to the Company, through the purchase of the Company’s Series A 4% 2012 Convertible Redeemable Preferred Stock, to fund the development, construction and marketing of the Future Tower Assets.  Upon termination of the Ring Development Agreement, all right, title and interests in undeveloped Search Ring Assets will revert to the Licensor without any residual rights retained by CIG Services.  Further information regarding the Ring Development Agreement is set forth in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 11, 2011 , which is incorporated herein by reference thereto.

Results of Operations

For the Three Month Period Ended December 31, 2011 and December 31, 2010

Sales, Income and Expenses for the CI Group

The results of operations referred to below for the three months ended December 31, 2011 represents the combined results of operations for the predecessor entity for the period from October 1, 2011 through November 30, 2011 and the successor entity for the period from December 1, 2011 through December 31, 2011.

During the three months ended December 31, 2011, the CI Group had total revenues of $414,159, including rent of $363,604, services of $25,704, and management fees from related parties of $24,851.  Total revenues decreased from the three month period ended December 31, 2010.  During the three month period ended December 31, 2010, the CI Group had total revenues of $589,392, including rent of $409,778, origination fees from related parties of $54,804, services of $99,959, and management fees from related parties of $24,851.

During the three month period ended December 31, 2011, the CI Group had total operating expenses of $1,518,370, which was a decrease from total operating expenses of $2,280,314 for the three month period ended December 31, 2010.  Operating expenses for the three month period ended December 31, 2011 included general and administrative expenses of $1,047,718, shared services with related parties of $67,258, site rental of $142,751, depreciation and accretion of $222,092, other costs of $122,301 and gains on the sale of assets to related party investors of $83,750.  Operating expenses for the three month period ended December 31, 2010 included general and administrative expenses of $586,001, shared services

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with related parties of $452,242, site rental of $220,682, search rings of $452,018, depreciation and accretion of $211,384, other costs of $407,792 and gains on the sale of assets to related party investors of $49,805.

During the three month period ended December 31, 2011, the CI Group had a total loss from operations of $1,104,211, which represented a decrease in losses from the three months ended December 31, 2010, during which time CI Group had a total loss from operations of $1,690,922.

During the fiscal year ended December 31, 2011, the CI Group had total other income of $1,883,384, which included losses allocated to related party investors of $918,205, interest expenses to related parties of $6,643, a gain on foreign currency exchange of $264, and a bargain purchase gain of $971,558.  Total other income increased from the three month period ended December 31, 2010, during which the CI Group had total other income of $1,726,573, which included losses allocated to related party investors of $1,638,690, interest income from related parties of $45,223, and a gain on foreign currency exchange of $42,650.

The CI Group’s net income for the three month period ended December 31, 2011 was $779,173, which was an increase from $35,651 for the three month period ended December 31, 2010.

The Company has entered into six Atypical Silent Partnership Agreements with related party limited partnership investors which made loans to the Company for acquisition of tower assets which are segregated on the books by investment group. Profits from these towers are allocated to these investors after a designated internal rate of return of between 8 – 20%.  Operating expenses and losses from these towers are 100% allocated to the investors until there is a net profit.

The losses allocated to these related party investors are reflected in the statements of operations in “losses allocated to related party investors.” The total losses allocated during the three month periods ended December 31, 2011 and 2010 were $918,205 and $1,638,690, respectively.

Between November 2009 and February 2010, the Company entered into six Atypical Silent Partnership Agreements with related party limited partnership investors which made contributions to the Company for acquisition of tower assets which are segregated on the books by investment group. No separate legal entity was created through these agreements. The investment agreements all have similar terms, conditions, and termination dates as defined in the agreements. Termination dates range from December 31, 2014 through September 30, 2015.  On each such termination date, each respective investor may elect termination of the arrangement and the Company may then either liquidate the towers for cash payments after their share of any liabilities, distribute the net tower assets in kind or distribute stock in an entity which holds the tower assets.  Because these are mandatory variable repayment obligations occurring on each termination date, the net obligations to these investors are accounted for as long-term subordinated obligations.  Management fees, origination fees and interest charged to the investors and third-party consulting and other revenue received by the Company not related to the tower ownership or operations are segregated as Company revenue with minimal or no offset by Company overhead expenses.

Liquidity and Capital Resources

As of December 31, 2011, the CI Group’s total assets were $20,340,999, including property and equipment, net of accumulated depreciation in the amount of $16,314,367, construction in progress in the amount of $1,124,595, deferred rent assets in the amount of $162,561 and long-term prepaid rent in the amount of $173,618.  The CI Group’s total assets increased from September 30, 2011, at which time the CI Group’s total assets were $17,367,665, including property and equipment, net of accumulated depreciation in the amount of $15,166,970, construction in progress in the amount of $563,913, deferred rent assets in the amount of $147,157 and long-term prepaid rent in the amount of $174,759. 

As of December 31, 2011, the CI Group’s total current assets were $2,565,858, consisting of cash in the amount of $1,587,127, accounts receivable in the amount of $155,167, accounts receivable from related parties in the amount of $797,258, and prepaid expenses and other current assets in the amount of $26,306.  CI Group’s total current assets increased from September 30, 2011, at which time the CI Group’s total current assets were $1,314,866, consisting of cash in the amount of $214,675, accounts receivable in the amount of $197,634, accounts receivable from related parties in the amount of $858,957, and prepaid expenses and other current assets in the amount of $43,600.

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As of December 31, 2011, the CI Group’s total liabilities were $17,792,690, including long-term subordinated obligations to related parties of $13,826,198, deferred rent liabilities of $262,530, and asset retirement obligations of $477,932.  As of September 30, 2011, the CI Group’s total liabilities were $16,188,907, including long-term subordinated obligations to related parties of $13,184,767, deferred rent liabilities of $270,976, and asset retirement obligations of $480,740. 

As of December 31, 2011, the CI Group’s total current liabilities were $3,226,030, consisting of accounts payable and accrued expenses in the amount of $1,499,136, accounts payable to related parties in the amount of $400,049, debt to related parties of $1,145,960 and deferred revenue in the amount of $180,885.  Total current liabilities represented an increase from September 30, 2011, at which time the CI Group’s total current liabilities were $2,252,424, consisting of accounts payable and accrued expenses in the amount of $1,636,583, accounts payable to related parties in the amount of $453,920 and deferred revenue in the amount of $161,921.

Employees and Directors

As of February 17, 2012, the Company had 17 persons serving as officers and in employee capacities for the Company.  The Company has 4 persons serving as directors of the Company, including Mr. Paul McGinn who serves as both an officer and director of the Company.

Research and Development

As of the date of this Report, the CI Group has not expended significant amounts on research and development.  The CI Group does not currently have any funds allocated for research or development as of the date of this Report.  The CI Group intends to assess prospective research and development programs during the foreseeable future and allocate a responsive portion of the CI Group’s budget accordingly.

 Recent accounting pronouncements

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

Off Balance Sheet Arrangements

As of December 31, 2011, we did not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.        

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ITEM 3.                QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not Applicable.

ITEM 4.                CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The Company maintains "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company conducted an evaluation (the "Evaluation"), under the supervision and with the participation of the Company’s Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures ("Disclosure Controls") as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, the Company’s CEO and CFO concluded that the Company’s Disclosure Controls were not effective because of the identification of a material weakness in the Company’s internal control over financial reporting which is identified below, which the Company views as an integral part of its disclosure controls and procedures.

The material weakness relates to the monitoring and review of work performed by the Company’s limited accounting staff in the preparation of financial statements, footnotes and financial data provided to the Company’s independent registered public accounting firm in connection with the annual audit. More specifically, the material weakness in the Company’s internal control over financial reporting is due to the fact that:

The Company is currently taking the following actions to improve controls and procedures:

-          Subsequent to the period covered by this Report, the Company has commenced the process of hiring supplemental support staff to the accounting team;

-          The Company is acquiring new accounting software and has scheduled commencement of installation during the latter part of February 2012;

-          New internal reporting and controlling procedures are being implemented based upon management and controlling systems developed by Enex Group Management, SA.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended December 31, 2011 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II.               OTHER INFORMATION

ITEM 1.                LEGAL PROCEEDINGS.

Not Applicable.

ITEM 1A.          RISK FACTORS.

Not Applicable.

ITEM 2.             UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Series A 4% Convertible Redeemable Preferred Stock:

On October 7, 2011, the Company issued to BAC-CIG, LLC, a Delaware investment company owned by BAC Berlin Atlantic Holding GmbH & Co. KG one million shares of restricted preferred stock, designated as Series A 4% Convertible Redeemable Preferred Stock, par value $0.00001 per share (the “Series A 4% Preferred Stock”), at a purchase price of $2.00 per share, resulting in an aggregate of $2,000,000 in proceeds received by the Company. The Series A 4% Preferred Stock had the following attributes: (i) a stated value of $2.00 per share; an annual dividend of 4% per year (payable in cash or in common stock); (ii) a liquidation preference of $2.00 per share (together with accrued dividends and other adjustments); (iii) conversion rights by the holder to Company common stock, exercisable at any time prior to redemption at a conversion price of $2.00 per share (subject to customary adjustments for stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events); and (iv) an optional redemption right exercisable by the Company if the volume weighted average of the Company’s common stock equals or exceeds 160% of the conversion price (as then in effect); and (v) voting rights equal to the equivalent number of common shares the preferred stock is convertible into.  As a result of the sale of these preferred shares, Berlin Atlantic Holding GmbH & Co. KG became a related party to the Company. The Company issued the Series A 4% Preferred Stock under a Certificate of Designation filed with the Secretary of State of Nevada on October 7, 2011, which provided for mandatory redemption by the Company in the amount of $2,000,000 no later than December 31, 2012, together with accrued dividends and other adjustments, all of which may be paid in cash or in shares of common stock at the option of the Company.  The Company issued the Series A 4% Preferred Stock to a Delaware investment company in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D promulgated thereunder. On December 20, 2011, the Company and the Delaware investment company executed the conversion of shares of Series A 4% 2012 Convertible Redeemable Preferred Stock into shares of the Company’s common stock.  There are no shares of Convertible Redeemable Preferred Stock outstanding as of the date of this Report.  Further information regarding the Series A 4% Preferred Stock is set forth in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 11, 2011 , which is incorporated herein by reference thereto.

The CI Group Securities Acquisition Issuance:

On December 5, 2011, the Company entered into the LLC Purchase Agreement with CIG Properties, BAC Berlin, and the CI Group pursuant to which BAC Berlin sold one hundred percent (100%) of the CI Group Membership Interests to CIG Properties.  As consideration for the acquisition of the Membership Interests, the Company, on behalf of CIG Properties, issued to BAC Berlin 750,000 shares of the Company’s common stock as the Consideration Shares.  The Company issued the Consideration Shares in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

ITEM 3.             DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 4.             MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5.             OTHER INFORMATION.

Not Applicable.

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ITEM 6.     EXHIBITS.

The following documents are included herein:

SIGNATURES

Pursuant to the requirements of 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.

Dated: February 21, 2012

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