UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-QSBQUARTERLY REPORTUNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934FOR QUARTER ENDED SEPTEMBER 30, 2006SATELLITE NEWSPAPERS CORP.(Exact name of small business registrant as specified in its charter)Nevada
        000-26607
        88-0390828(State or other jurisdiction of incorporation or organiztion)
        (Commission File Number)
        (IRS Employer Indentification Number)Bank of America Building980 Post Road EastWestport, Connecticut 06880(Address of principal executive offices) (Zip Code)203 401 8089(Registrants telephone no., including area code)
  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 x   No o  Number of shares of the registrants common stock outstanding as of November 20, 2006 was: 8,456,374  Traditional Small Business Disclosure Format:  Yes o   No x  1    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY  FORM 10-QSB FOR QUARTER ENDED SEPTEMBER 30, 2006  TABLE OF CONTENTS   PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
        03Consolidated Balance Sheet as of September 30, 2006 (Unaudited) and December 31, 2005
        05Consolidated Statements of Operations  For the Three Months Ended September 30, 2006 (Unaudited) and September 30, 2005 and for the Nine Months Ended September 30, 2006 and September 30, 2005
        06Consolidated Statements of Cash Flows  For the Nine Months Ended September 30, 2006 (Unaudited)
        07Notes to Unaudited Condensed Consolidated Financial Statements
        09ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
        10PART II. OTHER INFORMATIONITEM 1. - LEGAL PROCEEDINGS
        12ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS
        12ITEM 3. - DEFAULTS UPON SENIOR SECURITIES
        12ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        12ITEM 5. - OTHER INFORMATION
        12ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
        12SIGNATURES
        13
   2    PART I. FINANCIAL INFORMATION  ITEM 1.
        FINANCIAL STATEMENTS
      SATELLITE ENTERPRISES CORP. AND SUBSIDIARY FINANCIAL STATEMENTS SEPTEMBER 30, 2006 AND 2005  3    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY INDEX TO FINANCIAL STATEMENTS JUNE 31, 2006 AND 2005   FINANCIAL STATEMENTS (UNAUDITED)Consolidated Balance Sheet as of September 30, 2006 (Unaudited) and December 31, 2005Consolidated Statements of Operations (Unaudited)
 For the Three Months Ended September 30, 2006 and 2005 and Nine Months Ended September 30, 2006 and 2005Consolidated Statements of Cash Flows (Unaudited)
 For the Nine Months Ended September 30, 2006 and 2005Notes to Unaudited Condensed Financial Statements
   4    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS  September 30,
        
        
        December 31,2006
        
        
        2005CURRENT ASSETS
        
        (Unaudited)Cash
        $
        21,077
        
        
        $
        37,509Accounts receivable
        
        150,696
        
        
        
        241,002Inventory
        
        
        
        
        
        119,658Total Current Assets
        
        171,773
        
        
        
        398,169EQUIPMENT, net of accumulated depreciation of $300,765 at December 31, 2005
        
        
        
        
        
        1,183,472OTHER ASSETSDeposits
        
        8,826
        
        
        
        8,826Technology rights
        
        
        
        
        
        840,466Total Assets
        $
        180,599
        
        
        $
        2,430,933LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable
        
        1,355,020
        
        
        
        1,321,768Accrued expenses
        
        129,060
        
        
        
        99,523Accrued settlement fees relating to employee costs
        
        1,140,000Accrued salaries and related expenses
        
        163,204
        
        
        
        371,107Total Current Liabilities
        
        2,787,284
        
        
        
        1,792,398LONG-TERM LIABILITIESNotes payable to related parties
        
        429,847
        
        
        
        165,848Loans payable
        
        3,291,294
        
        
        
        3,060,280Total Long-Term Liabilities
        
        3,721,141
        
        
        
        3,226,128STOCKHOLDERS DEFICITPreferred stock, par value $0.001; authorized 500,000,000 Shares, 257,533,000 Class A convertible preferred shares issued and outstanding
        
        258
        
        
        
        258Common stock, $0.001 par value; 500,000,000 shares authorized; 8,469,550 and 8,409,550 issued and outstanding at March 31, 2006 and December 31, 2005.
        
        8,470
        
        
        
        8,410Additional paid in capital.
        
        9,644,329
        
        
        
        9,344,388Stock subscription receivable.Accumulated deficit.
        
        (16,054,341
        )
        
        
        (12,087,594
        )Accumulated other comprehensive loss.
        
        73,458
        
        
        
        146,945Total Stockholders Deficit
        
        (6,327,826
        )
        
        
        (2,587,593
        )Total Liabilities and Stockholders Deficit
        $
        180,599
        
        
        $
        2,430,933
 See accompanying notes to consolidated financial statements.  5    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY  CONDENSES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  Three Months Ended September 30
        
        
        Nine Months Ended JSeptember 302006
        
        2005
        
        
        2006
        
        2005NET SALES
        $
        150,333
        
        $
        341,689
        
        
        $
        484,982
        
        $
        1,784,466COSTS AND EXPENSES:Cost of services
        
        48,156
        
        
        395,250
        
        
        
        207,855
        
        
        666,285Selling, general and administrative
        
        1,348,066
        
        
        529,490
        
        
        
        1,784,466
        
        
        2,317,005Interest expense
        
        35,199
        
        
        74,884
        
        
        
        101,811
        
        
        155,439Research and development
        
        25,306
        
        
        
        
        
        
        99,448Depreciation and amortization
        
        105,811
        
        
        71,563
        
        
        
        302,510
        
        
        207,717Total Costs and Expenses
        
        1,562,538
        
        
        1,071,187
        
        
        
        2,496,090
        
        
        3,346,446NET OPERATING LOSS
        
        (1,412,205
        )
        
        (729,498
        )
        
        
        (2,011,108
        )
        
        (1,561,980
        )OTHER INCOME:Currency gain (loss)
        
        7,212
        
        
        
        
        
        
        (29,267
        )Total Other Income (Expense)
        
        7,212
        
        
        
        
        
        
        (29,267
        )NET LOSS FROM CONTINUING
OPERATIONS
        
        (1,404,993
        )
        
        (729,498
        )
        
        
        (2,040,375
        )
        
        (1,561,980
        )DISCONTINUED OPERATIONSLoss from discontinued operations (less
applicable income tax expense of $0)
        
        (2,397,694
        )
        
        
        
        
        
        (2,529,987
        )Gain from discontinued operations (less
Applicable income tax expense of $0)
        
        
        
        
        
        
        
        
        603,625Total Discontinued Operations
        
        (2,397,694
        )
        
        
        
        
        
        (1,926,372
        )NET INCOME (LOSS)
        $
        (3,802,687
        )
        $
        (729,498
        )
        
        $
        (3,966,747
        )
        $
        (1,561,980
        )NET LOSS PER COMMON SHARE(Basic and diluted)
        $
        (0.45
        )
        $
        (0.16
        )
        
        $
        (0.47
        )
        $
        (0.35
        )WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
        
        
        
        
        
        
        
        
        8,465,374
        
        
        4,504,015
    See accompanying notes to consolidated financial statements.  6    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)   Nine Months Ended September 30,2006
        
        2005CASH FLOW FROM OPERATING ACTIVITIESNet income (loss)
        
        $
        (3,966,747
        )
        $
        (1,561,980
        )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
        
        
        302,510
        
        
        207,717Loss from Discontinued Operations
        
        
        2,397,694Changes in operating assets and liabilities:Increase in accounts receivable
        
        
        (109,694
        )
        
        (929,237
        )Increase in inventory
        
        
        
        
        
        (68,180
        )(Decrease) increase in accounts payable
        
        
        33,252
        
        
        456,828(Decrease) increase in accrued expenses
        
        
        29,536
        
        
        582,811(Decrease) increase in accrued settlement fee relating to employee costs
        
        
        1,140,000(Decrease) increase in accrued salaries and related expenses
        
        
        (207,903
        )
        
        (253,444
        )Net Cash Used in Operating Activities
        
        
        (381,352
        )
        
        (1,565,485
        )CASH FLOWS FROM INVESTING ACTIVITIESPayments for equipment
        
        
        (56,606
        )
        
        1,330,739Deposits
        
        
        
        
        
        (16,785
        )Net Cash Flows (Used in) /Provided by Investing Activities
        
        
        (56,606
        )
        
        1,313,954CASH FLOWS FROM FINANCING ACTIVITIESChanges in notes payable to related party
        
        
        
        
        
        (119,998
        )Net change in notes psayable to related parties
        
        
        495,013
        
        
        (626,877
        )Change in notes payable to financial institutions
        
        
        
        
        
        156,553Proceeds from issuance of common stock
        
        
        
        
        
        247,570Net Cash (Used in) Provided by Financing Activities
        
        
        495,013
        
        
        (342,752
        )EFFECT OF EXCHANGE RATE CHANGES ON CASH
        
        
        (73.487
        )
        
        599,580NET (DECREASE) INCREASE IN CASH
        
        
        (16,432
        )
        
        5,297CASH AND CASH EQUIVALENTS BEGINNING OF YEAR
        
        
        37,509
        
        
        46,897CASH AND CASH EQUIVALENTS END OF PERIOD
        
        $
        21,077
        
        $
        52,194
  See accompanying notes to consolidated financial statements.  7    SATELLITE ENTERPRISES CORP. AND SUBSIDIARY  SUPPLEMENTAL CASH FLOW INFORMATION (UNAUDITED)   Nine Months Ended September 30,2006
        
        2005Non-Cash ActivitiesAccounts receivable
        
        $
        200,000Prepaid production costs
        
        
        300,000Inventory
        
        
        119,658Equipment - net
        
        
        1,101,476Technology rights
        
        
        676,560
  See accompanying notes to consolidated financial statements.  8    SATELLITE ENTERPRISE CORP. AND SUBSIDIARIES  NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2006  NOTE 1 BASIS OF PRESENTATION  The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included.  Results for the nine months ended September 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.  For further information, refer to the financial statements and footnotes thereto included in the Satellite Enterprise Corp. and Subsidiaries annual report on Form 10-KSB for the year ended December 31, 2005.  NOTE 2  GOING CONCERN  As shown in the accompanying financial statements, the Company has incurred cumulative net operating losses of $16,054,341 and, has a negative working capital, and a stockholders deficit.  Management has ceased operations as of September 30, 2006 of the operations of Satellite Newspapers Suisse GMBH, its operating subsidiary.  The ceasing of the operation does not allow the Company to generate revenues.  As a result, it is questionable whether the Company can continue as a going concern.  NOTE 3  SALE OF SATELLITE NEWSPAPER CONTENT B.V. AND SATELLITE NEWSPAPER TRADING B.V.  On May 2, 2006, Satellite Newspapers Suisse GMBH, a wholly owned subsidiary of Satellite Enterprise Corp., sold its interest in Satellite Newspaper Content B.V. and Satellite Newspaper Trading B.V.  Accordingly, a gain from discontinued operations has been recognized in the statement of operations.  NOTE 4  STOCKHOLDERS DEFICIT  On July 1, 2006, the Companys Board of Directors and shareholders approved a 50 to 1 reverse split.  Accordingly, all shares and per share numbers have been restated to reflect the reverse split.  NOTE 5  DEFAULT JUDGEMENT  In May 2004, Fred DeVries and Renato Mariani filed suit in the Fifteenth Judicial Circuit Court located in Palm Beach County, Florida, claiming breach of employment contracts against the Company and against the Companys CEO, claiming Fraud.  The parties were seeking monies and benefits.  The parties were recently awarded and filed a default judgment against the Company in the amount of $1,440,000 of which $300,000 has previously been reserved.  NOTE 6  CLOSING OF SATELLITE NEWSPAPERS SUISSE GMBH  As of September 30, 2006, the Company has determined to cease the operation of Satellite Newspapers Suisse GMBH.  Accordingly, the Company has made a provision for the assets related to Satellite Newspapers Suisse GMBH.  9    ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OERATION.  Management has ceased operations as of September 30, 2006 of the operations of Satellite Newspapers Suisse GMBH, its operating subsidiary.  The ceasing of the operation does not allow the Company to generate revenues.  As a result, it is questionable whether the Company can continue as a going concern.  PRIOR HISTORY OF SATELLITE  The Company was formed as a Nevada corporation on April 14, 1998, to operate as a specialty retailer of fine jewelry. In its fiscal year ending June 30, 2000, the Company sold a limited quantity of jewelry through direct mail and word of mouth advertising.  On July 29, 2000, subsequent to the close of its June 30, 2000 fiscal year, the Company acquired 100% of the outstanding shares of GreenVolt Corp., an Ontario Corporation (GreenVolt) in a stock for stock exchange. GreenVolt was in the process of developing fuel cell technologies for commercial and industrial use. In connection with this transaction, management of the Company changed, and the Company disposed of its retail jewelry  business in September 2000, by transfer of  all jewelry  assets and liabilities to Larry Beck, a former director of the company. In connection with such transaction, the Company changed its name from Beck & Co., Inc. to GreenVolt Power Corp.  On August 27, 2002, Satellite Holdings, Ltd., a corporation organized under the laws of Turks & Caicos, acquired 13,783,740 shares of the Companys common stock from Thomas L. Faul. Such shares represented approximately 53% of the issued and outstanding common stock of the Company. Mr. Faul resigned as the Companys sole officer and director, after appointing Robert Hodge as the Companys new President and CEO, and as Chairman of the Board of Directors. In addition, in exchange for the release by Faul of the Company for various claims, the Company transferred its wholly owned subsidiary, GreenVolt Corp., to Faul.  On August 28, 2002, the Board of Directors of the Company resolved to change the name of the Company to Satellite Enterprises Corp., and on September 15, 2002, the Company completed a one-for-one-hundred reverse stock split (the Reverse Stock Split) of its outstanding common stock.  During fiscal year 2003, the Company concentrated its efforts on maintaining its corporate status and seeking a merger candidate.  On June 20, 2003, in conjunction with a previously reported change of control of the Company, the Company entered into a Rights Agreement with Satellite Newspapers Worldwide NV, a corporation organized under the laws of the Netherlands (hereinafter Satellite Newspapers). Under said Rights Agreement, Satellite Newspapers appointed the Company as its irrevocable commercial exclusive distributor to promote the sale and/or lease of its newspaper Kiosks (hereinafter KiOSK) and the associated Satellite newspaper content distribution technology for which Satellite Newspapers has developed the technology, owns the patents, engineering and technical design. These Rights include the exclusive rights to use the trade names, logos and other trade designations, including, but not limited to, all rights to the Satellite Newspapers derived content fed into the territory granted therein to the
Company and the names Satellite Newspapers devices or variants thereof as a corporate or trade name of Satellite Newspapers. These Rights also include the exclusive rights to distribute all available contents of its KiOSKs in its territory which includes all of North, Central and South America including but not limited to Mexico, the United States and all its territories, and all the Caribbean Islands, including the existing inventory of prototype and placebo units of its KiOSKs in the Americas. The Rights further include all parts and supply inventory owned by Satellite Newspapers relating to its KiOSKs in said territory.  In October 2003, Satellite Newspapers took a different direction. Satellite Newspapers sold their patents, software and trademarks to Media Finance en Suisse Holding GmbH, a Swiss corporation (hereinafter Media Finance). Thereafter, Media Finance set up an operating subsidiary, Satellite Newspapers Suisse GmbH, a Swiss corporation (hereinafter Satellite Swiss). Media Finance granted Satellite Swiss a twenty-year exclusive license to distribute all satellite derived contents for the purpose of commercializing their product under a revenue sharing arrangement.  10    On November 26, 2003, the Company entered into a Stock Purchase Option Agreement dated November 26, 2003 with Media Finance for the purchase of 100% of Satellite Swiss. This option agreement allowed the Company to acquire the right to purchase 100% of the shares of common stock of Satellite Swiss. On February 15, 2004, the Company exercised the option and acquired 100% of Satellite Swiss in consideration for the issuance of 126,000,000 shares of common stock.  On December 19, 2003, as part of the Companys desire to obtain Satellite Swiss, Roy Piceni, founder of Satellite Newspapers and whose family owns 100% of Media Finance was elected the Companys chairman of the board and as its president.  Satellite Swiss consists of two subsidiaries, Satellite Newspapers Content BV a Dutch corporation that negotiates agreements with newspapers throughout the world for the rights to distribute their content and Satellite Newspapers Trading BV which has the production rights to produce and sell the KiOSKs.  On March 11, 2004 the Company amended its Articles of Incorporation whereby the authorized number of shares of common stock were increased from 200,000,000 to 500,000,000 and thereafter declared a 3-for-1 stock split effective in the form of a 200 per cent stock dividend payable on or about March 31, 2004 to shareholders of record as of March 22, 2004 thereby increasing its issued shares as of that date to 197,887,545.  On August 31, 2004, the Company entered into an agreement to acquire a 52% interest in SoliDAM, a software development company located in the Netherlands. The purchase price is to consist of the issuance of a $125,000 note payable to the stockholders of SoliDAM as well as 919,926 shares of the Companys stock. On September 15, 2005, the Company and the shareholders of SoliDAM decided that the acquisition of SoliDAM was not in the best interests of either party. It was mutually agreed to unwind the transaction. Accordingly the shareholders of SoliDAM returned the 919,926 shares of the Companys common stock and released the Company from its note obligation in the amount of $125,000.  In June 2005, Swiss Satellite incorporated two new Swiss subsidiary entities. Satellite Newspapers Content GmbH and Satellite Newspapers Trading GmbH. Except for the Development and Network Management, the Swiss Companies will take over all activities from the Dutch Companies.  On November 30, 2005, the Company changed its name from Satellite Newspapers Corp. to Satellite Newspapers Corp. In addition, effective November 30, 2005, the Companys quotation symbol on the OTC Bulletin Board changed from SENR to SNWP.  On December 5, 2005, Mr. Roy Piceni resigned as Chief Executive Officer of the Company. On December 5, 2005, the Board of Directors appointed Ms. Jerri L. Palmer as the new Chief Executive Officer of the Company. Mr. Piceni will continue to serve as the Chairman of the Board of Directors.  On March 31, 2006, the Companys subsidiary Swiss Satellite entered into a binding Secured Purchase Agreement which closed on the same date with Media Finance en Suisse Holding GmbH whereby the Company sold $2,700,000 original principal amount of Series A Premium Secured Convertible Debenture and its two Dutch subsidiaries Satellite Newspapers Content BV and Satellite Newspapers Trading BV.  Media Finance en Suisse Holding GmbH paid for the Debentures and the two subsidiaries when it was transferred to Swiss Satellite all its validity issued and subsisting Intellectual Properties, such as patents to the manufacture of the KiOSKS that was owned by Media Finance en Suisse Holding GmbH. With this transaction, the twenty-year exclusive license distribution agreement with Media Finance has ended and the Company is free from its monthly fee obligation, since the Company is now the holder of these rights.  Management has ceased operations as of September 30, 2006 of the operations of Satellite Newspapers Suisse GMBH, its operating subsidiary.  The ceasing of the operation does not allow the Company to generate revenues.  As a result, it is questionable whether the Company can continue as a going concern.  11    PART II. OTHER INFORMATION  ITEM 1.
        LEGAL PROCEEDINGS
  From time to time, the Company is a party to litigation or other legal proceedings that we consider to be part of the ordinary course of our business. Except for the following, we are not involved currently in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations:  On May 2004, Fred de Vries and Renato Mariani filed suit in the Fifteenth Judicial Circuit Court located in Palm Beach County, Florida, claiming breach of employment agreements against the Company and against the Companys CEO claiming fraud. The parties were seeking monies and benefits owed in connection with their employment agreements as well as other damages. On June 27, 2005, the company had agreed upon a settlement which is now in default.  As a result of the default, The company owes Fred de Vries and Renato Mariani an amount of $1,440,000.  Three Dutch companies in the Netherlands have commenced a legal procedure against Satellite Newspapers Content BV, claiming an amount due to them of approximately $156,000. They have agreed to suspend legal action until June 1, 2005 based upon a settlement reached in February 2004 whereby a shareholder of the Company will surrender a comparable number of Company shares to offset the obligation  To date The Company is still in negotiation with the three Dutch companies in order to find a solution. While negotiations are pending, legal actions against the company are suspended.  The Company may become involved in material legal proceedings in the future.  ITEM 2.
        CHANGES IN SECURITIES AND USE OF PROCEEDS
  None  ITEM 3.
        DEFAULTS UPON SENIOR SECURITIES
  None  ITEM 4.
        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  None.  ITEM 5.
        OTHER INFORMATION
  None.  ITEM 6.
        EXHIBITS AND REPORTS ON FORM 8-K
  (a)
        Exhibits:
  Exhibit 31.1
        Certification of Roy Piceni, Chairman & CEO
 Exhibit 31.2
        Certification of Randy Hibma, Director, President & CFO
  Exhibit 32.1
        Certification of Roy Piceni, Chairman & CEO
 Exhibit 32.2
        Certification of Randy Hibma, Director, President & CFO
  (b)
        Reports on Form 8-K:
  Three months ended September 30, 2006  None.  12    SIGNATURES  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  SATELLITE NEWSPAPERS CORP..(Registrant)Date: November 20, 2006
        
        By:/s/ ROY PICENIRoy PiceniChief Executive Officer andChairman of the Board(Duly Authorized Officer)Date: November 20, 2006
        
        By:/s/ RANDY HIBMARandy HibmaPresident and ChiefFinancial Officer and Director(Principal Financialand Accounting Officer)
   13