**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-QSB**


(MARK
      ONE)




**|X|
      QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE**


**ACT
      OF**


**1934
      FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007**




**|_|
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES**


**EXCHANGE**


**ACT
      OF 1934 FOR THE TRANSITION PERIOD FROM**


**__________
      TO __________**




*COMMISSION
      FILE NUMBER 000-24829*





**FTS
      GROUP, INC.**


(exact
      name of small business issuer as specified in its charter)







Nevada
            84-1416864(State
                or Jurisdiction of Incorporation or Organization)
            (I.R.S.
                Employer Identification No.)





7610
      West Hillsborough Ave., Tampa, Florida 33615


(Address
      of principal executive offices)





(215)
      688-2355


(issuer's
      telephone number)





Check
      whether the issuer (1) has 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 in for the past 90 days. Yes |X| No
      |_|




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




As
      of
      March 31, 2007 we had 154,784,894 shares of common stock, par value $0.001,
      outstanding.




Transitional
      Small Business Disclosure Format (check one): Yes |_| No |X|








**FTS
                GROUP, INC.****TABLE
                OF CONTENTS****PART
                I. FINACIAL INFORMATION**
            
            **Page**Item
                1. Financial Statements
            
            1Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            19Item
                3. Controls and Procedures
            
            27**PART
                II. OTHER INFORMATION**Item
                1. Legal Proceedings
            
            28Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            28Item
                3. Defaults of Senior Securities
            
            29Item
                4. Submission of Matters to a Vote of Security Holders
            29Item
                5. Other Information
            
            29Item
                6. Exhibits
            
            29







**PART
      I - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS.**







Condensed
                Consolidated Financial Statements (Unaudited)
            **Page**Balance
                Sheet- March 31, 2007 and December 31, 2006
            2Statements
                of Operations- Three months ended March 31, 2007 and 2006
            3Statement
                of Cash Flows- Three months ended March 31, 2007 and 2006
            4Notes
                to Condensed Consolidated Financial Statements
            5




1










**FTS
                GROUP, INC. AND SUBSIDIARIES****CONDENSED CONSOLIDATED
                BALANCE SHEET****MARCH
                31, 2007 AND DECEMBER 31, 2006**Assets
            
            
            2007
            
            
            2006Current
                assets:Cash
                and cash equivalents
            
            $
            57,617
            
            $
            115,056Restricted
                cash
            
            
            -
            
            
            -Accounts
                receivable
            
            
            18,374
            
            
            130,025Inventories,
                net
            
            
            328,729
            
            
            373,734Prepaid
                expenses and current assets
            
            
            343,134
            
            
            247,686Total
                current assets
            
            
            747,854
            
            
            866,501Property
                and equipment, net of accumulated depreciation
            
            
            277,351
            
            
            303,641Unamortized
                discount on convertible debt
            
            
            342,036
            
            
            232,925Unamortized
                debt issuance costs
            
            
            -
            
            
            29,573Investments
            
            
            114,734
            
            
            92,505Goodwill
            
            
            5,177,696
            
            
            5,177,696Deposits
            
            
            16,482
            
            
            16,482Total
                assets
            
            $
            6,676,153
            
            $
            6,719,323Liabilities
                and Stockholders' EquityCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            $
            $581,807
            
            $
            548,707Current
                portion of notes payable to related parties, net of
                discount
            
            
            1,925,111
            
            
            1,820,215Convertible
                debentures-current portion
            
            
            1,165,474
            
            
            1,238,321Current
                installments of long-term debt-equipment loans
            
            
            2,994
            
            
            4,824Total
                current liabilities
            
            $
            3,675,386
            
            
            3,612,067Fair
                value of derivative liabilities
            
            
            392,785
            
            
            453,039Convertible
                debentures
            
            
            
            
            
            -Long-term
                debt to related parties, less current installments
            
            
            750,000
            
            
            1,000,000Total
                liabilities
            
            $
            4,818,171
            
            
            5,065,106Stockholders'
                equity:10%
                Convertible preferred stock, Series A, $0.01 par value:150,000
                shares authorized; 0 shares issued and outstanding
            
            
            -
            
            
            -Preferred
                stock, $0.01 par value: 4,850,000 undesignatedshares
                authorized, none issued.
            
            
            -
            
            
            -Convertible
                preferred stock, Series B, $0.01 par value:1,000,000
                shares authorized, issued and outstanding at March 31,
                2007.
            
            
            10,000
            
            
            10,000Common
                stock, $0.001 par value:  855,000,000 shares
                authorized:154,784,894
                shares issued and outstanding at March 31, 2007.137,650,469
                shares issued and outstanding at December 31, 2006.
            
            
            154,785
            
            
            137,650Additional
                paid-in capital
            
            
            12,532,621
            
            
            12,231,626Accumulated
                deficit
            
            
            (10,821,091
            )
            
            (10,704,226
            )Total
                stockholders' equity
            
            
            1,876,315
            
            
            1,675,050Commitments
                and contingent liabilities
            
            
            (18,333
            )
            
            (20,833
            )Total
                liabilities and stockholders' equity
            
            $
            6,676,153
            
            $
            6,719,323See
                accompanying notes to condensed consolidated financial
                statements.




2











**FTS
                GROUP, INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****FOR
                THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**2007
            
            
            2006(Restated)REVENUESService
                Revenue-See World Satelltites, Inc.
            
            $
            1,098,458
            
            $
            1,138,036Product
                Retail Sales-FTS Wireless, Inc.
            
            
            702,962
            
            
            495,5781,801,420
            
            
            1,633,614COST
                OF GOODS SOLDService-See
                World Satelltites, Inc.
            
            
            176,708
            
            
            209,208Product-FTS
                Wireless, Inc.
            
            
            550,623
            
            
            374,274727,331
            
            
            583,482GROSS
                PROFITService-See
                World Satelltites, Inc.
            
            
            921,750
            
            
            928,828Product-FTS
                Wireless, Inc.
            
            
            152,339
            
            
            121,3041,074,089
            
            
            1,050,132GENERAL
                AND ADMINISTRATIVE EXPENSESSelling,
                general and administrative expenses
            
            
            1,081,684
            
            
            1,008,1861,081,684
            
            
            1,008,186INCOME
                (LOSS) FROM OPERATIONS
            
            
            (7,595
            )
            
            41,946OTHER
                INCOME (EXPENSE)Change
                in fair value of Derivative Liabilities
            
            
            60,254
            
            
            (7,478,664
            )Interest
            
            
            (169,524
            )
            
            (39,029
            )(109,270
            )
            
            (7,517,693
            )NET
                INCOME (LOSS)
            
            $
            (116,865
            )
            $
            (7,475,747
            )PER
                SHARE INFORMATION:WEIGHTED
                AVERAGE SHARES OUTSTANDINGBasic
            
            
            137,868,401
            
            
            107,195,939Diluted
            
            
            251,897,851
            
            
            120,862,553NET
                LOSS PER COMMON SHARE:Basic
            
            
            ($0.00
            )
            
            ($0.07
            )Diluted
            
            
            ($0.00
            )
            
            ($0.06
            )See
              accompanying notes to condensed consolidated financial
              statements.




3







**FTS
                  GROUP, INC. AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENT OF CASH FLOWS****FOR
                  THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**2007
              
              
              2006(Restated)Cash
                  flows from operating activities:Net
                  income (loss)
              
              
              
              
              $
              (116,865
              )
              $
              (7,475,747
              )Adjustments
                  to reconcile net income to net cashused
                  in operating activities:Depreciation
                  and amortization
              
              
              
              
              
              146,753
              
              
              95,169Common
                  shares issued for services
              
              
              
              
              
              -
              
              
              98,400Amortization
                  of debt discount
              
              
              
              
              
              2,679
              
              
              -Amortization
                  of deferred stock compensation
              
              
              
              
              
              2,500
              
              
              1,167Change
                  in fair value of derivative liabilities
              
              
              
              
              
              (60,254
              )
              
              7,478,664(Increase)
                  decrease in operating assets:Accounts
                  receivable
              
              
              
              
              
              111,651
              
              
              (38,754
              )Inventories
              
              
              
              
              
              45,005
              
              
              (35,083
              )Prepaid
                  expenses
              
              
              
              
              
              (95,448
              )
              
              437,310Other
                  assets
              
              
              
              
              
              -
              
              
              (1,043
              )Increase
                  (decrease) in operating liabilities:Accounts
                  payable and accrued expenses
              
              
              
              
              
              38,099
              
              
              (336,064
              )Net
                  cash provided by operating activities
              
              
              
              
              
              74,120
              
              
              224,019Cash
                  flows from investing activities:Net
                  assets 100% acquisition of See World Satellites, Inc.
              
              
              
              
              
              -
              
              
              (206,100
              )Capital
                  expenditures for property and equipment
              
              
              
              
              
              -
              
              
              (74,000
              )Release
                  of restriction on funding proceeds for investment in acquisition
              
              
              
              
              
              -
              
              
              60,000Payment
                  to See World Satellites, Inc. acquisition from escrowed amounts
              
              
              
              
              
              -
              
              
              (500,000
              )Payments
                  for investment
              
              
              
              
              
              (22,229
              )
              
              (15,000
              )Net
                  cash used in investing activities
              
              
              (22,229
              )
              
              (735,100
              )Cash
                  flows from financing activities:Proceeds
                  from issuance of stock
              
              
              
              
              
              -
              
              
              140,109Proceeds
                  from convertible debentures
              
              
              
              
              
              -
              
              
              30,000Proceeds
                  from notes payable individuals
              
              
              
              
              
              -
              
              
              635,002Proceeds
                  from loans related parties
              
              
              
              
              
              20,000
              
              
              -Repayments
                  of notes payable-truck loans
              
              
              
              
              
              (1,830
              )
              
              (4,708
              )Repayments
                  of notes payable to individuals
              
              
              
              
              
              (125,000
              )
              
              (375,000
              )Repayment
                  of loans from related parties
              
              
              
              
              
              (2,500
              )
              
              (32,600
              )Net
                  cash provided by (used in) financing activities
              
              
              
              
              
              (109,330
              )
              
              392,803Net
                  increase (decrease) in cash
              
              
              
              
              
              (57,439
              )
              
              (118,278
              )Cash
                  at beginning of year
              
              
              
              
              
              115,056
              
              
              243,079Cash
                  at end of year
              
              
              
              
              $
              57,617
              
              $
              124,801Supplemental
                  schedule of cash flow information:Interest
                  paid
              
              
              
              
              $
              1,911
              
              $
              389Supplemental
                  disclosure of non-cash investing and financing activities:Stock
                  issued in exchange for convertible debentures
              
              
              
              
              $
              72,847
              
              $
              8,085Stock
                  issued as loan inducements
              
              
              
              
              $
              245,283
              
              $
              0Reassignment
                  of note payable from Richard Miller to Funds
              
              
              
              
              $
              1,000,000See
                  accompanying notes to condensed consolidated financial statements.
  4


**FTS
      GROUP, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2007**


**(UNAUDITED)**




**(1)**  **Summary
      of Significant Accounting Policies**




**Organization,
      Ownership and Business**




FTS
      Group, Inc. (the "Company"), is a holding company incorporated under the laws
      of
      the State of Nevada. The Company is focused on developing, acquiring and
      investing in cash-flow positive businesses and viable business ventures
      primarily in the Internet, Wireless and Technology industries. Through its
      two
      wholly-owned subsidiaries, See World Satellites, Inc. and FTS Wireless, Inc.,
      the Company has acquired and developed a diversified wireless business engaged
      in the distribution of next generation wireless communications and entertainment
      products and services for businesses and consumers alike. The Company's
      wholly-owned subsidiary, See World Satellites, Inc., is a leading distributor
      of
      satellite television systems and relating products and services for DISH
      Networks in the western Pennsylvania marketplace. The Company's wholly-owned
      subsidiary, FTS Wireless, Inc., is an emerging retail wireless distributor
      operating in the gulf coast market of Florida.




**Principles
      of Consolidation**




The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries: FTS Wireless, Inc. and See World Satellites, Inc.
      All
      significant intercompany transactions and balances have been eliminated in
      consolidation.




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with U.S. generally accepted accounting principles
      ("GAAP") for interim financial information and with the instructions to Form
      10-QSB. Accordingly, they do not include all of the information and footnotes
      required by GAAP for complete financial statements. In the opinion of
      management, all adjustments (consisting of normal recurring adjustments)
      considered necessary for a fair presentation have been included. Operating
      results for the three month period ended March 31, 2007 are not indicative
      of
      the results that may be expected for the year ending December 31,
      2007.




As
      contemplated by the Securities and Exchange Commission (SEC) under the Rules
      of
      Regulation S-B, the accompanying financial statements and related footnotes
      have
      been condensed and do not contain certain information that will be included
      in
      the Company's annual financial statements and footnotes thereto. For further
      information, refer to the Company's audited consolidated financial statements
      and related footnotes thereto included in the Company's annual report on Form
      10-KSB, as amended, for the year ended December 31, 2006.




**Cash
      and Cash Equivalents**




For
      purposes of the statement of cash flows, the Company considers all short-term
      debt securities with maturity of three months or less to be cash
      equivalents.




5





**Accounts
      Receivable**




Accounts
      receivable consist primarily of trade receivables, net of a valuation allowance
      for doubtful accounts.




**Inventories**




Inventories
      are valued at the lower-of-cost or market on a first-in, first-out
      basis.




**Investment
      Securities**




The
      Company accounts for its investments in accordance with Statement of Financial
      Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
      Equity Securities." Management determines the appropriate classification of
      its
      investments in marketable securities at the time of purchase and reevaluates
      such determination at each balance sheet date. Securities that are bought and
      held principally for the purpose of selling them in the near term are classified
      as trading securities. Debt securities for which the Company does not have
      the
      intent or ability to hold to maturity and equity securities not classified
      as
      trading securities are classified as available-for-sale. The cost of investments
      sold is determined on the specific identification or the first-in, first-out
      method. Trading securities are reported at fair value with unrealized gains
      and
      losses recognized in earnings, and available-for-sale securities are also
      reported at fair value but unrealized gains and losses are shown in the caption
      "unrealized gains (losses) on shares available-for-sale" included in
      stockholders' equity. Management determines fair value of its investments based
      on quoted market prices at each balance sheet date.




**Property,
      Equipment and Depreciation**




Property
      and equipment are recorded at cost less accumulated depreciation. Upon
      retirement or sale, the cost of the assets disposed of and the related
      accumulated depreciation are removed from the accounts, with any resultant
      gain
      or loss included in the results of operations. Depreciation is computed over
      the
      estimated useful lives of the assets (3-20 years) using the straight-line method
      for financial reporting purposes and accelerated methods for income tax
      purposes. Maintenance and repairs are charged to operations as
      incurred




**Intangible
      Assets**




SFAS
      No.
      142 eliminates the amortization of goodwill, and requires annual impairment
      testing of goodwill and introduces the concept of indefinite life intangible
      assets. The Company adopted SFAS No. 142 effective January 1, 2002. Goodwill
      and
      indefinite-lived intangible asset impairment is always assessed based upon
      a
      comparison of carrying value with fair value.




6





**Impairment
      of Long-Lived Assets**




Realization
      of long-lived assets, including goodwill, is periodically assessed by the
      management of the Company. Accordingly, in the event that facts and
      circumstances indicate that property and equipment, and intangible or other
      assets may be impaired, an evaluation of recoverability would be performed.
      If
      an evaluation is required, the estimated future undiscounted cash flows
      associated with the asset are compared to the asset's carrying amount to
      determine if a write-down to market value is necessary. In management's opinion,
      there was no impairment of such assets at March 31, 2007 or December 31,
      2006.




**Revenue
      Recognition**




The
      Company recognizes revenue from the activation of new wireless customers and
      the
      sale of wireless handsets, airtime and accessories at the time of activation
      or
      sale.




Net
      revenues from wireless activations are recognized during the month the
      activation is performed. Allowances for charge-backs, returns, discounts and
      doubtful accounts are provided when sales are recorded. Shipping and handling
      costs are included in cost of sales.




Although
      the Company's post-paid activations are subject to possible charge-back of
      commissions if a customer deactivates service within the allowable 180-day
      period after signing the contract, they still recognize the activation in the
      period of the activation. The Company has set up a reserve for possible
      activation charge-backs. Based on SFAS No. 48, this is permitted if reliable
      estimates of the expected refunds can be made on a timely basis, the refunds
      are
      being made for a large pool of homogeneous items, there is sufficient
      company-specific historical basis upon which to estimate the refunds, and the
      amount of the commission specified in the agreement at the outset of the
      arrangement is fixed, other than the customer's right to request a
      refund.




The
      Company's wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue
      when it makes a sale within the store, completes a retail satellite receiver
      installation at the customer's home and the customer signs a contract, or
      completes a retail service provider satellite receiver installation at the
      customer's home and signs a contract.




7





**Income
      Taxes**




The
      Company is a taxable entity and recognizes deferred tax assets and liabilities
      for the future tax consequences attributable to differences between the
      financial statement carrying amounts of existing assets and liabilities and
      their respective tax basis. Deferred tax assets and liabilities are measured
      using enacted tax rates expected to be in effect when the temporary differences
      reverse. The effect on the deferred tax assets and liabilities of a change
      in
      tax rates is recognized in income in the year that includes the enactment date
      of the rate change. A valuation allowance is used to reduce deferred tax assets
      to the amount that is more likely than not to be realized.




**Earnings
      Per Share**




The
      basic
      net earnings (loss) per common share is computed by dividing the net earnings
      (loss) by the weighted average number of shares outstanding during a period.
      Diluted net earnings (loss) per common share is computed by dividing the net
      earnings, adjusted on an as if converted basis, by the weighted average number
      of common shares outstanding plus potential dilutive securities. For the three
      months ended March 31, 2007 and 2006, potential dilutive securities that had
      an
      anti-dilutive effect were not included in the calculation of diluted net
      earnings (loss) per common share. These securities include options to purchase
      shares of common stock.




**Advertising
      Costs**




The
      cost
      of advertising is expensed as incurred. Advertising expense wa s
      $21,705
      and $31,001 for the
      three
      months ended March 31, 2007 and 2006 respectively.




**Management’s
      Estimates and Assumptions**




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities, disclosure of contingent
      assets and liabilities at the date of the financial statements, and the reported
      amounts of revenues and expenses. Actual results could differ from these
      estimates.




**Stock-Based
      Compensation**




Effective
      the first quarter of fiscal 2006, the Company adopted SFAS 123(R) which
      establishes accounting for stock-based awards exchanged for employee services.
      Accordingly, stock-based compensation cost is measured at grant date, based
      on
      the fair value of the award, over the requisite service period. The Company
      previously applied APB 25 and related interpretations, as permitted by SFAS
      123.




8





**Critical
      Accounting Policies and Estimates**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      judgments and estimates.




The
      Company believes the following critical accounting policies affect the Company’s
      more significant judgments and estimates used in the preparation of its
      consolidated financial statements.





·
            Estimating
                the fair value of the Company’s complex derivative financial instruments
                that are required to be carried as liabilities at fair value pursuant
                to
                Statements on Financial Accounting Standards No. 133*Accounting
                for Derivative Financial Instruments and Hedging Activities (FAS
                133).*





**Fair
      Value of Derivative Financial Instruments**





The
      Company does not use derivative financial instruments to hedge exposures to
      cash-flow, market or foreign-currency risks. However, the Company frequently
      enters into certain other financial instruments and contracts, such as debt
      financing arrangements, preferred stock arrangements and freestanding warrants
      with features that are either (i) not afforded equity classification, (ii)
      embody risks not clearly and closely related to host contracts or (iii) may
      be
      net-cash settled by the counterparty to a financing transaction. As required
      by
      FAS 133, these instruments are required to be carried as derivative liabilities,
      at fair value, in the Company’s financial statements.





The
      Company estimates fair values of derivative financial instruments using various
      techniques, and combinations thereof, that are considered to be consistent
      with
      the objective measuring of fair values. In selecting the appropriate
      technique(s), the Company considers, among other factors, the nature of the
      instrument, the market risks that such instruments embody and the expected
      means
      of settlement. For less complex derivative instruments, such as free-standing
      warrants, the Company generally uses the Black Scholes option valuation
      technique, since it embodies all of the requisite assumptions, including trading
      volatility, estimated terms and risk free rates, necessary to fair value these
      instruments. For complex derivative instruments, such as embedded conversion
      options, the Company generally uses the Flexible Monte Carlo valuation technique
      since it embodies all of the requisite assumptions, including credit risk,
      interest-rate risk and exercise/conversion behaviors, that are necessary to
      fair
      value these more complex instruments. For forward contracts that contingently
      require net-cash settlement as the principal means of settlement, the Company
      projects and discounts future cash flows applying probability-weightage to
      multiple possible outcomes. Estimating fair values of derivative financial
      instruments requires the development of significant and subjective estimates
      that may, and are likely to, change over the duration of the instrument with
      related changes in internal and external market factors. In addition,
      option-based techniques are highly volatile and sensitive to changes in the
      Company’s trading market price which has high-historical volatility. Since
      derivative financial instruments are initially and subsequently carried at
      fair
      values, the Company’s income will reflect the volatility in these estimate and
      assumption changes.




**New
      Accounting Standards**




In
      May
      2005, the Financial Accounting Standards Board ("FASB") issued Statement of
      Financial Accounting Standards ("SFAS") No. 154, Accounting Changes and Error
      Corrections. SFAS No. 154 replaces Accounting Principles Board Opinion No.
      20,
      Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Internal
      Financial Statements, and changes the requirements for the accounting for and
      reporting of a change in accounting principle. SFAS No. 154 requires
      retrospective application of changes in accounting principle to prior periods'
      financial statements, unless it is impracticable to determine either the
      period-specific effects or the cumulative effect of the change. SFAS No. 154
      is
      effective for accounting changes and corrections of errors made in fiscal years
      beginning after December 15, 2005. The Company adopted SFAS No. 154 on January
      1, 2006. Any impact on the Company's consolidated results of operations and
      earnings per share will be dependent on the amount of any accounting changes
      or
      corrections of errors whenever recognized.




In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 153. This statement addresses the measurement
      of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29,
      "Accounting for Nonmonetary Transactions," is based on the principle that
      exchanges of nonmonetary assets should be measured based on the fair value
      of
      the assets exchanged.




The
      guidance in that opinion; however, included certain exceptions to that
      principle. This statement amends Opinion 29 to eliminate the 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. A nonmonetary exchange has commercial substance if the
      future cash flows of the entity are expected to change significantly as a result
      of the exchange. This statement is effective for financial statements for fiscal
      years beginning after June 15, 2005. Earlier application is permitted for
      nonmonetary asset exchanges incurred during fiscal years beginning after the
      date this statement was issued. Management believes the adoption of this
      statement will have no impact on the financial statements of the
      Company.




9





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 152, which amends FASB statement No. 66,
      "Accounting for Sales of Real Estate," to reference the financial accounting
      and
      reporting guidance for real estate time-sharing transactions that is provided
      in
      AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
      Transactions." This statement also amends FASB Statement No. 67, "Accounting
      for
      Costs and Initial Rental Operations of Real Estate Projects," to state that
      the
      guidance for (a) incidental operations and (b) costs incurred to sell real
      estate projects does not apply to real estate time-sharing transactions. The
      accounting for those operations and costs is subject to the guidance in SOP
      04-2. This statement is effective for financial statements for fiscal years
      beginning after June 15, 2005. Management believes the adoption of this
      statement will have no impact on the financial statements of the
      Company.




In
      November 2004, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standards No. 151, "Inventory Costs--an amendment of
      ARB
      No. 43, Chapter 4." This statement amends the guidance in ARB No. 43, Chapter
      4,
      "Inventory Pricing," to clarify the accounting for abnormal amounts of idle
      facility expense, freight, handling costs, and wasted material (spoilage).
      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
      believe the adoption of this statement will have any immediate material impact
      on the Company.




**(2)**  **Property
      and Equipment**




Major
      classes of property and equipment together with their estimated useful lives,
      consisted of the following at March 31, 2007 and December 31, 2006:







**Years**
            
            
            **2007**
            
            
            **2006****Leasehold
                Improvements**
            
            
            5
            
            
            142,822
            
            
            142,822**Furniture
                and Fixtures**
            
            
            5
            
            
            194,340
            
            
            194,340**Equipment**
            
            
            3-5
            
            
            120,583
            
            
            120,583**Vehicles**
            
            
            3
            
            
            25,777
            
            
            25,777**Total
                property and equipment**
            
            
            
            
            
            483,522
            
            
            483,522**Less:
                accumulated depreciation**
            
            
            
            
            
            (206,171
            )
            
            (179,881
            )**Net
                property and equipment**
            
            
            
            
            
            277,351
            
            
            303,641




Depreciation
      expense for the three months ended March 31, 2007 and 2006 was $26 ,291
      and
      $28,902




10





**(3)**  **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's ability to continue as a going concern
      is contingent upon its ability to expand its operations and secure additional
      financing. The Company has warrants outstanding that if exercised will provide
      for additional operating capital, however there is no guarantee that the
      warrants will be exercised. The Company is pursuing additional financing options
      in order to raise funds required to reduce outstanding debt obligations and
      execute its operating and expansion plans. Failure to secure financing or expand
      operations may result in the Company not being able to continue as a going
      concern. The financial statements do not include any adjustments to reflect
      the
      possible future effects of 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.




**(4)**  **Convertible
      Debt**




In
      December 2005 and January 2006 the Company raised a total of $1,470,000 from
      the
      issuance of $1,858,622 Secured Convertible Promissory Notes with selected
      subscribers. The Notes were issued at an original discount of 21%. On December
      29, 2005, the Company received $1,000,000 of the proceeds and a further $470,000
      in January 2006. Both amounts were after discount, but before expenses. The
      Company agreed to issue 100 class A, and 50 class B warrants for each 100 shares
      on the closing date of the issuance of the Notes, assuming complete conversion.
      The Company also agreed to issue 36,260,486 shares of common stock to be
      distributed pro rata to purchasers of the Notes (the common stock was issued
      effective December 29, 2005 and is included in the number of shares issued
      and
      outstanding at December 31, 2005). The conversion prices of the Notes, Class
      A
      Warrants, and Class B Warrants as stated on the Notes are $0.04, $0.02868 and
      $0.0239 respectively.





On
      January 3, 2005, the Company acquired See World Satellites, Inc., a Pennsylvania
      corporation. As part of the purchase price for See World, currently a
      wholly-owned subsidiary of the Company, the Company agreed to issue a promissory
      note in the amount of $3,500,000. On January 22, 2007, the Company assigned
      a
      $1,000,000 portion of this Note to four investors (the "Assignees"). The Company
      issued a Note to each Assignee with a combined principle amount of $1,000,000.
      The Notes bear interest at a rate of 20% which was paid in the form of an
      original issue discount to the Note. Payments are due to each Assignee in
      accordance with their pro rata share.





As
      consideration for the assignment, the Company agreed to issue 15,000,000 shares
      of common stock to be distributed pro rata among the Assignees of the Notes.
      The
      shares were issued in accordance with Rule 506 of Regulation D under the
      Securities Act of 1933, as amended, in that:





-
      the
      sales were made to an accredited investor, as defined in Rule 501;





-
      the
      Company gave the Assignee the opportunity to ask questions and receive answers
      concerning the terms and conditions of the offering and to obtain any additional
      information which it possessed or could acquire without unreasonable effort
      or
      expense that is necessary to verify the accuracy of information
      furnished;




The
      Company accounted for the issuance of stock and warrants under the convertible
      notes in line with the provisions of EITR 00-27 which states that when a debt
      instrument includes detachable instruments such as warrants, the proceeds of
      the
      issuance should be allocated to the convertible instrument and the detachable
      instruments in proportion to their relative fair market values. Accordingly,
      the
      Company calculated fair value of the stock based on current market price and
      fair value of the warrants using the Black-Scholes pricing model. Total proceeds
      from the funding were then allocated among debt and equity based on their
      relative fair values.




**(5)**  **Income
      Taxes**




Income
      taxes for the interim periods were computed using the effective tax rate
      estimated to be applicable for the full fiscal year, which is subject to ongoing
      review and evaluation by management. The estimated federal income tax expense
      for the three months ended March 31, 2007 and 2006 is eliminated by net
      operating loss carry forwards.





11







**(6)**  **Operating
      Leases**




The
      Company leases real property for its seven retail locations. Six of the
      locations have lease terms ranging from three months to three years while one
      location is on a month-to-month basis.




Future
      minimum payments due on the non-cancelable leases are as follows:







**Year
                Ending**
            
            
            **Annual
                Payments**2007
            
            $
            51,1752008
            
            $
            30,000$
            81,175========




Rent
      expense was
      $53,297 and $49,713 for the three months
      ended March 31, 2007 and 2006, respectively.




**(7)**  **Concentration
      of Credit Risk**




The
      Company's concentrations of credit risk consist principally of Accounts
      Receivable and Accounts Payable. The Company purchases approximately 95% of
      its
      satellite system supplies from Echostar Satellite, L.L.C. and DISH Network
      Service, L.L.C. The Company further purchases approximately 90% of its telephone
      supplies from one vendor, Metro PCS. Additionally, these three vendors are
      major
      customers of the Company who provide products that generate over 90% of
      revenue.




**(8)**  **Stock**




On
      January 22, 2007, the Company issued 15,000,000 restricted shares of common
      stock to four accredited investors relating to a $1,000,000
      financing.




On
      January 5, 2007, the Company issued 1,000,000 restricted shares of common stock
      relating to the conversion of $40,000 of debt at a price of $0.04 per
      share.




On
      February 14, 2007, the Company issued 188,857 restricted shares of common stock
      relating to the conversion of $4,627 of debt at a price of $0.025 per
      share.




On
      February 13, 2007, the Company issued 160,177 restricted shares of common stock
      relating to the conversion of $4,627 of debt at a price of $0.029 per
      share.




On
      March
      1, 2007, the Company issued 263,911 restricted shares of common stock to two
      investors relating to the conversion of $6,940 of debt at a price of $0.026
      per
      share.




On
      March
      16, 2007, the Company issued 246,050 restricted shares of common stock relating
      to the conversion of $9,710 of debt at a price of $0.039 per share.




On
      March
      30, 2007 the Company issued 275,430 restricted shares of common stock to two
      investors relating to the conversion of $6,940 of debt at a price of $0.025
      per
      share.




**Common
      Stock**




Holders
      of shares of common stock are entitled to one vote for each share on all matters
      to be voted on by the stockholders. Holders of common stock do not have
      cumulative voting rights. Holders of common stock are entitled to share ratably
      in dividends, if any, as may be declared from time to time by the Company's
      Board of Directors in its discretion from funds legally available therefore,
      subject to the rights of Preferred stockholders. Holders of common stock have
      no
      preemptive rights to purchase the Company’s common stock. There are no
      conversion or redemption rights or sinking fund provisions with respect to
      the
      common stock. In the event of the Company's liquidation, dissolution or winding
      up, the holders of common stock are entitled to share pro rata all assets
      remaining after payment in full of all liabilities, subject to the rights of
      Preferred stockholders. Please refer to the discussion below under "Preferred
      Stock."




12


**Preferred
      Stock**




The
      Company's Articles of Incorporation, as amended, vest its Board of Directors
      with authority to divide the Company’s Preferred Stock into series and to fix
      and determine the relative rights and preferences of the shares of any such
      series so established to the full extent permitted by the laws of the State
      of
      Nevada and the Articles of Incorporation, as amended, in respect to, among
      other
      things, (i) the number of shares to constitute such series and the distinctive
      designations thereof; (ii) the rate and preference of dividends, if any, the
      time of payment of dividends, whether dividends are cumulative and the date
      from
      which any dividend shall accrue; (iii) whether Preferred Stock may be redeemed
      and, if so, the redemption price and the terms and conditions of redemption;
      (iv) the liquidation preferences payable on Preferred Stock in the event of
      involuntary or voluntary liquidation; (v) sinking fund or other provisions,
      if
      any, for redemption or purchase of Preferred Stock; (vi) the terms and
      conditions by which Preferred Stock may be converted, if the Preferred Stock
      of
      any series are issued with the privilege of conversion; and (vii) voting rights,
      if any. A total of 150,000 shares were designated Series A Preferred Stock,
      however, none are outstanding. All Series A shares have an issue price and
      preference on liquidation equal to $1.00 per share. The Series A Preferred
      Shares accrue dividends at the rate of 10% per annum during the first two years
      following issuance, which dividend is payable in cash and is cumulative. During
      the third through fifth year in which the Series A Preferred Shares are
      outstanding, the holders are entitled to 3.75% of the Company's net profits,
      also payable in cash. The Company may redeem this Preferred Stock at any time
      following notice to the holder for an amount equal to the issue price, plus
      any
      accrued but unpaid dividends.




The
      Series A Preferred Shares are convertible into shares of the Company's common
      stock at the option of the holder on a one for one basis at any time up to
      the
      fifth anniversary of the issuance. On the fifth anniversary, the Series A
      Preferred Shares automatically convert into shares of the Company's common
      stock. The conversion rate is subject to adjustment in certain events, including
      stock splits and dividends. Holders of our Preferred Stock are entitled to
      one
      vote for each share held of record. Holders of the Preferred Stock vote with
      holders of the common stock as one class.




At
      March
      31, 2007, a total of 1,000,000 shares were designated Series B Preferred Stock
      and all 1,000,000 shares are outstanding. Upon liquidation (voluntary or
      otherwise), dissolution or winding up of the Company, holders of Series B
      Convertible Preferred Stock will receive their prorate share of the total value
      of the assets and funds of the Company to be distributed, assuming the
      conversion of Series B Convertible Preferred Stock to common stock. The holders
      of shares of Series B Convertible Preferred Stock shall not be entitled to
      receive dividends and shall have no voting rights. After June 1, 2006, the
      shares of Series B Convertible Preferred Stock shall be redeemable at $2.00
      per
      share solely at the Company's option.




Any
      shares of Series B Convertible Preferred Stock may, at any time after January
      3,
      2008, at the option of the holder or the Company, be converted into fully paid
      and nonassessable shares of common stock. The number of shares of common stock
      to which a holder of Series B Convertible Preferred Stock shall be entitled
      upon
      a conversion shall be the product obtained by multiplying the number the number
      of shares of Series B Convertible Preferred Stock being converted by
      25.




13


**(9)**  **Options
      and Warrants**




**Options**




The
      Company had a Non-Qualified Stock Option and Stock Grant Plan (the “Plan”). For
      the year ended December 31, 2005, the Company had not granted any options.
      Under
      the Plan, the Company's board of directors had reserved 2,500,000 shares that
      may have been granted at the board of directors' discretion. No option may
      have
      been granted after July 27, 2007 and the maximum term of the options under
      the
      Plan is ten years. In accordance with SFAS 123R, the Company reviewed the
      provisions of the Plan and its related outstanding options to comply with the
      required fair value analysis component to SFAS 123R that took effect January
      1,
      2006. During this analysis, the Company determined that the 598,000 options
      previously issued have expired and are no longer outstanding as of January
      1,
      2006 per Plan provisions.




**Warrants**




The
      following details warrants outstanding as of March 31, 2007:




The
      Company had 3,000,000 warrants outstanding relating to a dividend declared
      to
      stockholders of record on August 27, 2004. The warrants have an exercise price
      of $0.25 and expire on August 7, 2007. The Company does not expect these
      warrants to be exercised in the near future because the exercise price exceeds
      the current stock price.




In
      accordance with the subscription agreement relating to the private placement
      the
      Company closed during the period ended March 31, 2005, the Company issued the
      following warrants. Investors received two classes of warrants, Series A and
      Series B warrants, for each share of common stock purchased. The B warrants
      had
      an initial exercise price of $0.08 and A warrants had an initial exercise price
      of $0.12. The Company filed the terms and conditions of the financing and
      registration rights in March 2005 on Form 8-K. The funds raised in the private
      placement were primarily used for working capital, costs related to the opening
      of new locations and to reduce outstanding liabilities.







**March
                31, 2007**
            
            
            **March
                31, 2007****Underlying
                Shares**
            
            
            **Exercise
                Price**Warrants
                issued during 2000
            
            
            1,036,000
            
            $
            1.50Warrants
                issued during 2004
              (10%
                Warrant Dividend)
            
            
            3,000,000
            
            $
            0.25Warrants
                issued during 2004 and 2005, A Warrants
            
            
            4,956,250
            
            $
            0.045





On
      September 28, 2005, the Company reduced the exercise price of the A warrants
      from $0.12 to $0.10. Additionally, the Company reduced the exercise price of
      the
      B warrants from $0.08 to $0.03. On July 17, 2006, the Company lowered the
      exercise price on the A warrants from $0.10 to $0.045.




In
      accordance with the subscription agreement relating to the private placement
      closed on December 29, 2005, the Company issued the following warrants.
      Investors received two classes of warrants, called Series A and Series B
      warrants, for each share of common stock purchased. The A warrants have an
      exercise price of $0.02868 and the B warrants have an exercise price of
      $0.0239.




14


The
      Company filed the terms and conditions of the financing and registration rights
      in January 2006 on Form 8-K. The funds raised in the private placement were
      primarily used for the acquisition of the Company's wholly-owned subsidiary
      See
      World Satellites, Inc.




The
      table
      below summarizes the A and B warrants outstanding as of March 31, 2007 relating
      to the financing closed on December 29, 2005.





**March
                31, 2007**
            
            
            **March
                31, 2007****Underlying
                Shares**
            
            
            **Exercise
                Price****Warrants
                issued in December 2005****A
                Warrants**
            
            
            46,465,550
            
            $
            0.02868**B
                Warrants**
            
            
            11,774,437
            
            $
            0.0239**B
                Warrants (new)**
            
            
            11,458,338
            
            $
            0.04




At
      March
      31, 2007, 1,185,350 restricted shares due to one of the investors remained
      unissued.




15


**(10)**  **See
      World Acquisition**




Effective
      January 3, 2006, the Company acquired 100% of the capital stock of See World
      Satellites, Inc. ("See World"), for consideration, providing for (i) $1,000,000
      in cash to the shareholder of See World, (ii) a promissory note in the amount
      of
      $3,500,000, and (iii) $1,000,000 in convertible preferred stock of the Company.




As
      required by SFAS No. 141, the Company has recorded the acquisition using the
      purchase method of accounting with the purchase price allocated to the acquired
      assets and liabilities based on their respective estimated fair values at the
      acquisition date. The purchase price of $5,500,000 had been allocated at
      follows:







**Current
                assets**
            **$185,850****Property
                and Equipment, net**
            **$136,454****Goodwill**
            **$5,177,696****$5,500,000****===========**




Goodwill
      recorded as a result of the acquisition is assignable to the See World
      Satellites, Inc. segment and is tax deductible over a period of fifteen years.




Unaudited
      pro forma data (included in the Company's 8-K/A filing on March 3, 2006)
      summarizes the results of operations of the Company for the years ended December
      31, 2005 and 2004 as if the acquisition had been completed on January 1, 2004.
      The pro forma data gives effect to the actual operating results prior to
      acquisition. The pro forma results do not purport to be indicative of the
      results that would have actually been achieved if the acquisition had occurred
      on January 1, 2004 or may be achieved in the future.




SFAS
      141
      also requires in the year of the acquisition, proforma information displaying
      the results of operations for the current period as if the combination had
      been
      completed at the beginning of the period, unless the acquisition was at or
      near
      the beginning of the period. Since See World Satellites, Inc. was acquired
      on
      January 3, 2006, the first business day of the year, and the Company determined
      that transactions between January 1, 2006 through January 2, 2006 to be
      immaterial, proforma presentation is deemed unnecessary.




**(11)**  **Related
      Party Transactions (See World Acquisition)**




At
      March
      31, 2007, the Company had the following debt obligations and made the following
      payments to Mr. Richard Miller, a director and President of the Company's
      wholly-owned subsidiary See World. The Company paid Mr. Miller $500,000 on
      January 3, 2006 relating to the acquisition of See World. The Company carried
      a
      short-term note obligation in the amount of $500,000 due to Mr. Miller. This
      note is due within 30 days of the effective date of a new five-year contract
      between Echo Star Satellites, L.L.C., DISH Network Services, L.L.C. and See
      World. During the three months ended September 30, 2006, the Company paid this
      note in full. Additionally, the Company issued 1,000,000 shares of its Series
      B
      Convertible Preferred stock to Mr. Miller during the three months ended March
      31, 2006. The conversion rate for the Series B stock is 25 shares of common
      stock for each share of Series B Convertible Preferred Stock. The shares of
      Series B Convertible Preferred Stock may be converted into common stock at
      any
      time after January 3, 2008, at the Company's option or that of the holder.
      The
      Series B stock has no voting rights. Each share is worth $1.00. On April 3,
      2006, the Company made a $250,000 payment to Mr. Miller reducing the outstanding
      note amount to $3.25 million as of June 30, 2006. On July 5, 2006, the Company
      made a $250,000 payment to Mr. Miller reducing the outstanding note amount
      to $3
      million. In October 2006, the Company made a $250,000 payment to Mr. Miller
      reducing the outstanding note amount due to $2.75 million. In January 2007,
      the
      Company made a $1,000,000 payment to Mr. Miller reducing the outstanding note
      amount to $1.75 million. In February 2007, the Company made a $162,500 payment
      to Mr. Miller reducing the outstanding note amount to $1.587 million at March
      31, 2007. The Company filed an 8-K with the terms and conditions of this note
      on
      January 5, 2006.




16





**(12)**  **Stock-Based
      Compensation**




The
      disclosures required by paragraph 84 of SFAS 123 ( R ) are stated below,
      although the Company had not granted any options since 2001 to the March 31,
      2007.







**March
                31, 2007**
            
            
            **March
                31, 2006**Net
                Income/ (Loss) as reported
            
            
            ($116,865
            )
            
            ($7,517,693
            )Basic
                and diluted earnings per share as reported
            
            
            ($0.00
            )
            
            ($0.06
            )Share-based
                employee compensation cost net of related tax effects included in
                net
                income as reported
            
            
            -
            
            
            -Share-based
                employee compensation cost net of related tax effects that would
                have been
                included in the net income if the fair-value based method had been
                applied
                to all awards
            
            
            -
            
            
            -Pro-forma
                net income as if the fair-value method had been applied to all
                awards
            
            
            ($116,865
            )
            
            ($7,517,693
            )Pro-forma
                basic and diluted earnings per share as if the fair-value based method
                had
                been applied to all awards.
            
            
            ($0.00
            )
            
            ($0.06
            )




**(13)** **** **Segment
      Information**





The
      Company has two reportable segments and corporate overhead: (1) product sales
      for wireless products segment include sales of wireless handsets and
      accessories; (2) service revenues for installments of satellites segment
      includes sales of satellite dish equipment and installations; and (3) a holding
      company for future commercial ventures. The corporate overhead includes the
      Company's investment holdings including financing current operations and
      expansion of its current holdings as well as evaluating the feasibility of
      entering into additional businesses.




The
      accounting policies of the segments are the same as those described in the
      summary of significant accounting policies. The Company evaluates performances
      based on profit or loss from operations before income taxes, not including
      nonrecurring gains and losses and foreign exchange gains and
      losses.




The
      Company's reportable segments are strategic business units that offer different
      technology and marketing strategies.




The
      Company's areas of operations are principally in the United States. No single
      foreign country or geographic area is significant to the consolidated financial
      statements.




Consolidated
      revenues, operating income/(losses), and identifiable assets were as
      follows:




**March
                31****2007**
            
            **2006****Revenues:**
            $
            
            $Service
                revenue - See World Satellites, Inc.
            
            1,098,458
            
            1,138,036Product
                sales - FTS Wireless, Inc.
            
            702,962
            
            495,578Corporate
            
            -
            
            -$
            1,801,420
            $
            1,633,614


**Income
                (loss) from operations:**
            $
            
            $Service
                revenue - See World Satellites, Inc.
            
            201,302
            
            234,025Product
                sales - FTS Wireless, Inc.
            
            27,516
            
            (14,947)Corporate
            
            (236,413)
            
            (177,132)$
            (7,595)
            $
            41,946


**Identifiable
                assets:**
            $
            
            $Service
                revenue - See World Satellites, Inc.
            
            5,895,481
            
            5,923,343Product
                sales - FTS Wireless, Inc.
            
            543,620
            
            933,787Corporate
            
            237,052
            
            266,226$
            6,676,153
            $
            7,123,356




17





**(14)**  **Restatement**




The
      Company has restated its financial statements for the year ended December 31,
      2005 to amend and restate the accounting for derivatives issued in connection
      with a financing closed December 29, 2005. These security components were
      originally treated as equity transactions associated with the issuance of
      secured, convertible promissory notes. Upon further review of accounting issues,
      statements and pronouncements by the APB (Accounting Principals Board), FASB
      (Financial Accounting Standards Board) and EITF (Emerging Issues Task Force)
      the
      Company identified the need to include fair value accounting of certain
      warrants, considered to be derivatives in order to be compliant with GAAP
      (Generally Accepted Accounting Principals) accounting in its quarterly and
      annual financial statements. For this reason the Company restated its 10QSB/A
      for the period ended March 31, 2006 to include fair value derivative accounting
      and reclassification of certain other financial items.





The
      restatement will also reclassify the restricted portion of cash to a separate
      line item on the Balance Sheet with a corresponding correction to the Statement
      of Cash Flows to reflect the restriction.





There
      were also related adjustments to the Company’s consolidated statement of cash
      flows and consolidated statement of stockholder’s equity.





The
      effect of the restatement on specific amounts provided in the consolidated
      financial statements is as follows:







**Restatement
                of previously Issued Quarterly Data (Unaudited)**Aspreviously
            
            
            Restatement
            
            
            Asreported
            
            
            adjustments
            
            
            restated**Three
                months ended March 31, 2006**Interest
                income (expense)
            
            
            
            
            
            (36,695
            )
            
            (2,334
            )
            
            (39,029
            )Change
                in fair value of derivative liabilities
            
            
            
            
            
            0
            
            
            (7,478,664
            )
            
            (7,478,664
            )Total
                other income (expenses)
            
            
            
            
            
            (36,695
            )
            
            (7,480,998
            )
            
            (7,517,693
            )Net
                income (loss)
            
            
            
            
            
            5,251
            
            
            (7,480,998
            )
            
            (7,475,747
            )As
            
            
            2005
            
            
            2006previously
            
            
            Restatement
            
            
            Restatement
            
            
            Asreported
            
            
            adjustments
            
            
            adjustments
            
            
            restated**March
                31, 2006**Cash
                and cash equivalents
            
            $
            624,801
            
            $
            -
            
            $
            (500,000
            )
            $
            124,801Restricted
                cash
            
            $
            -
            
            $
            -
            
            $
            500,000
            
            $
            500,000Property
                and equipment, net
            
            $
            319,762
            
            $
            -
            
            $
            70,000
            
            $
            389,762Investment
                in private entity
            
            $
            70,000
            
            $
            -
            
            $
            (70,000
            )
            $
            -Investments
            
            $
            -
            
            $
            -
            
            $
            15,000
            
            $
            15,000Prepaid
                expenses
            
            $
            122,512
            
            $
            -
            
            $
            (43,333
            )
            $
            79,179Accounts
                payable and accrued expenses
            
            $
            236,552
            
            $
            -
            
            $
            2,334
            
            $
            238,886Fair
                value of derivative liabilities
            
            $
            -
            
            $
            -
            
            $
            9,332,605
            
            $
            9,332,605Convertible
                preferred stock
            
            $
            1,000,000
            
            $
            -
            
            $
            (990,000
            )
            $
            10,000Additional
                paid-in capital
            
            $
            10,699,663
            
            $
            (219,535
            )
            $
            985,425
            
            $
            11,465,553Accumulated
                deficit
            
            $
            (10,300,511
            )
            $
            (1,629,831
            )
            $
            (7,480,998
            )
            $
            (19,411,340
            )Deferred
                Compensation
            
            $
            -
            
            $
            -
            
            $
            28,333
            
            $
            28,333




18





In
      addition, two reclassifications are required for previously reported activity.
      Firstly, the Company invested funds into Elysium Internet. This investment
      was
      initially treated as prepaid expense; however, a reclassification to Investment
      is appropriate in each of the first three quarters. Secondly, David Rasmussen
      was given 1,500,000 shares of the Company’s common stock as part of his
      employment contract. The value of this stock was entered as a prepaid item,
      and
      is being amortized over the term of his employment contract. However, a
      reclassification to Deferred Compensation is appropriate for this item. These
      two items have balance sheet impact only.




**ITEM
      2. Management’s Discussion and Analysis or Plan of
      Operation.**




The
      following discussion and analysis contains a comparison of the results of
      operations for the three months ended March 31, 2007 and the same period in
      2006. This discussion and analysis should be read in conjunction with the
      un-audited interim consolidated financial statements and the notes thereto
      included in this report, and the audited financial statements in our Annual
      Report on Form 10-KSB, as amended, for the year ended December 31,
      2006.




**CAUTIONARY
      STATEMENT REGARDING FORWARD LOOKING STATEMENTS**




This
      report on Form 10-QSB contains forward-looking statements that involve risks
      and
      uncertainties. We generally use words such as "believe," "may," "could," "will,"
      "intend," "expect," "anticipate," "plan," and similar expressions to identify
      forward-looking statements. You should not place undue reliance on these
      forward-looking statements. Our actual results could differ materially from
      those anticipated in the forward-looking statements for many reasons, including
      , but not limited to, our ability to raise capital, our ability to continue
      as a
      going concern, our ability to effectively manage our growth, changes in
      technology, the impact of competition and pricing, and other risks described
      in
      this report, our annual report on Form 10-KSB and other filings we made from
      time to time filed with the Securities and Exchange Commission. Although we
      believe the expectations reflected in the forward-looking statements are
      reasonable, they relate only to events as of the date on which the statements
      are made, and our future results, levels of activity, performance or
      achievements may not meet these expectations. We do not intend to update any
      of
      the forward-looking statements after the date of this document to conform these
      statements to actual results or to changes in our expectations, except as
      required by law.




19





**Overview**




We
      are an
      acquisition and development Company focused on developing, acquiring and
      investing in cash-flow positive businesses and viable business projects
      primarily in the Internet, Wireless and Technology industries. We operate a
      diversified wireless business through our two wholly-owned subsidiaries See
      World Satellites, Inc. and FTS Wireless, Inc. See World is a Regional Service
      Provider, or RSP, and retail distributor for DISH Network Services satellite
      television systems primarily to business and retail customers in the western
      Pennsylvania market and nationally through our retail channel. FTS Wireless
      is
      an emerging distributor of next generation wireless communications devices
      and
      related products and services. FTS Wireless operates a chain of nine retail
      wireless locations in the Gulf Coast market of Florida. All of the retail
      locations are leased properties.





**Critical
      Accounting Policies and Estimates**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      judgments and estimates.




We
      believe the following critical accounting policies affect our more significant
      judgments and estimates used in the preparation of our consolidated financial
      statements.





·
            Estimating
                the fair value of our complex derivative financial instruments that
                are
                required to be carried as liabilities at fair value pursuant to Statements
                on Financial Accounting Standards No. 133*Accounting
                for Derivative Financial Instruments and Hedging Activities (FAS
                133).*





**Fair
      Value of Derivative Financial Instruments**





We
      do not
      use derivative financial instruments to hedge exposures to cash-flow, market
      or
      foreign-currency risks. However, we frequently enter into certain other
      financial instruments and contracts, such as debt financing arrangements,
      preferred stock arrangements and freestanding warrants with features that are
      either (i) not afforded equity classification, (ii) embody risks not clearly
      and
      closely related to host contracts or (iii) may be net-cash settled by the
      counterparty to a financing transaction. As required by FAS 133, these
      instruments are required to be carried as derivative liabilities, at fair value,
      in our financial statements.





We
      estimate fair values of derivative financial instruments using various
      techniques, and combinations thereof that are considered to be consistent with
      the objective measuring of fair values. In selecting the appropriate
      technique(s), we consider, among other factors, the nature of the instrument,
      the market risks that such instruments embody and the expected means of
      settlement. For less complex derivative instruments, such as free-standing
      warrants, we generally use the Black Scholes option valuation technique, since
      it embodies all of the requisite assumptions, including trading volatility,
      estimated terms and risk free rates, necessary to fair value these instruments.
      For complex derivative instruments, such as embedded conversion options, we
      generally use the Flexible Monte Carlo valuation technique since it embodies
      all
      of the requisite assumptions, including credit risk, interest-rate risk and
      exercise/conversion behaviors, that are necessary to fair value these more
      complex instruments. For forward contracts that contingently require net-cash
      settlement as the principal means of settlement, we project and discount future
      cash flows applying probability-weightage to multiple possible outcomes.
      Estimating fair values of derivative financial instruments requires the
      development of significant and subjective estimates that may, and are likely
      to,
      change over the duration of the instrument with related changes in internal
      and
      external market factors. In addition, option-based techniques are highly
      volatile and sensitive to changes in our trading market price which has
      high-historical volatility. Since derivative financial instruments are initially
      and subsequently carried at fair values, our income will reflect the volatility
      in these estimate and assumption changes.




**Principles
      of Consolidation**




The
      consolidated financial statements include our accounts and those of our
      wholly-owned subsidiaries: FTS Wireless, Inc. and See World Satellites, Inc.
      All
      significant intercompany transactions and balances have been eliminated in
      consolidation.




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with U.S. generally accepted accounting principles,
      or
      GAAP, for interim financial information and with the instructions to Form
      10-QSB. Accordingly, they do not include all of the information and footnotes
      required by GAAP for complete financial statements. In the opinion of
      management, all adjustments (consisting of normal recurring adjustments)
      considered necessary for a fair presentation have been included. Operating
      results for the three months period ended March 31, 2007 are not indicative
      of
      the results that may be expected for the year ending December 31,
      2007.




As
      contemplated by the Securities and Exchange Commission, under the rules of
      Regulation S-B, the accompanying financial statements and related footnotes
      have
      been condensed and do not contain certain information that will be included
      in
      our annual financial statements and footnotes thereto. For further information,
      refer to our audited consolidated financial statements and related footnotes
      thereto included in our annual report on Form 10-KSB, as amended, for the year
      ended December 31, 2006.




**Accounts
      Receivable**




Accounts
      receivable consist primarily of trade receivables, net of a valuation allowance
      for doubtful accounts.




**Inventories**




Inventories
      are valued at the lower-of-cost or market on a first-in, first-out
      basis.




20





**Investment
      Securities**




We
      account for our investments in accordance with Statement of Financial Accounting
      Standards No. 115, "Accounting for Certain Investments in Debt and Equity
      Securities." We determine the appropriate classification of our investments
      in
      marketable securities at the time of purchase and reevaluate such determination
      at each balance sheet date. Securities that are bought and held principally
      for
      the purpose of selling them in the near term are classified as trading
      securities. Debt securities for which we do not have the intent or ability
      to
      hold to maturity, and equity securities not classified as trading securities,
      are classified as available-for-sale. The cost of investments sold is determined
      on the specific identification or the first-in, first-out method. Trading
      securities are reported at fair value with unrealized gains and losses
      recognized in earnings, and available-for-sale securities are also reported
      at
      fair value but unrealized gains and losses are shown in the caption "unrealized
      gains (losses) on shares available-for-sale" included in stockholders' equity.
      We determine fair value of our investments based on quoted market prices at
      each
      balance sheet date.




**Property,
      Equipment and Depreciation**




Property
      and equipment are recorded at cost less accumulated depreciation. Upon
      retirement or sale, the cost of the assets disposed of and the related
      accumulated depreciation are removed from the accounts, with any resultant
      gain
      or loss being recognized as a component of other income or expense. Depreciation
      is computed over the estimated useful lives of the assets (5-20 years) using
      the
      straight-line method for financial reporting purposes and accelerated methods
      for income tax purposes. Maintenance and repairs are charged to operations
      as
      incurred.




**Intangible
      Assets**




SFAS
      No.
      142 eliminates the amortization of goodwill, and requires annual impairment
      testing of goodwill and introduces the concept of indefinite life intangible
      assets. We adopted SFAS No. 142 effective January 1, 2002. Goodwill and
      indefinite-lived intangible asset impairment is always assessed based upon
      a
      comparison of carrying value with fair value.




**Impairment
      of Long-Lived Assets**




We
      periodically assess realization of long-lived assets, including goodwill.
      Accordingly, in the event that facts and circumstances indicate that property
      and equipment, and intangible or other assets may be impaired, an evaluation
      of
      recoverability would be performed. If an evaluation is required, we compare
      the
      estimated future undiscounted cash flows associated with the asset to the
      asset's carrying amount to determine if a write-down to market value is
      necessary. We believe there was no impairment of such assets at March 31, 2007
      or December 31, 2006.




21





**Revenue
      Recognition**




We
      recognize revenue from the activation of new wireless customers and the sale
      of
      wireless handsets, airtime and accessories at the time of activation or
      sale.




Net
      revenues from wireless activations are recognized during the month the
      activation is performed. Allowances for charge-backs, returns, discounts and
      doubtful accounts are provided when sales are recorded. Shipping and handling
      costs are included in cost of sales.




Although
      our post-paid activations are subject to possible charge-back of commissions
      if
      a customer deactivates service within the allowable 180-day period after signing
      the contract, we still recognize the activation in the period of the activation.
      We have set up a reserve for possible activation charge-backs. Based on SFAS
      No.
      48, this is permitted if reliable estimates of the expected refunds can be
      made
      on a timely basis, the refunds are being made for a large pool of homogeneous
      items, there is sufficient company-specific historical basis upon which to
      estimate the refunds, and the amount of the commission specified in the
      agreement at the outset of the arrangement is fixed, other than the customer's
      right to request a refund.




Our
      wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue when
      it
      makes a sale within the store, completes a retail satellite receiver
      installation at the customer's home and the customer signs a contract, or
      completes a retail service provider satellite receiver installation at the
      customer's home and signs a contract.




Net
      revenues from product sales are recognized upon the transfer of title and risk
      of ownership to customers. Allowances for estimated returns, discounts and
      doubtful accounts are provided when sales are recorded. Shipping and handling
      costs are included in cost of sales.




We
      recognize revenue from the sale and activation of wireless handsets and related
      accessories.




22





**Income
      Taxes**




We
      are a
      taxable entity and recognize deferred tax assets and liabilities for the future
      tax consequences attributable to differences between the financial statement
      carrying amounts of existing assets and liabilities and their respective tax
      basis. We measure deferred tax assets and liabilities using enacted tax rates
      expected to be in effect when the temporary differences reverse. The effect
      on
      the deferred tax assets and liabilities of a change in tax rates is recognized
      in income in the year that includes the enactment date of the rate change.
      We
      use a valuation allowance to reduce deferred tax assets to the amount that
      is
      more likely than not to be realized.




**Earnings
      Per Share**




We
      compute the basic net earnings (loss) per common share by dividing the net
      earnings (loss) by the weighted average number of shares outstanding during
      a
      period. We compute diluted net earnings (loss) per common share by dividing
      the
      net earnings, adjusted on an as if converted basis, by the weighted average
      number of common shares outstanding plus potential dilutive securities. For
      the
      three months ended March 31, 2007 and 2006, we did not include potential
      dilutive securities that had an anti-dilutive effect in the calculation of
      diluted net earnings (loss) per common share. These securities include options
      to purchase shares of common stock.




**Advertising
      Costs**




The
      cost
      of advertising is expensed as incurred.




23





**Management’s
      Estimates and Assumptions**




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires us to make estimates and assumptions that affect
      the reported amounts of assets and liabilities, disclosure of contingent assets
      and liabilities at the date of the financial statements, and the reported
      amounts of revenues and expenses. Actual results could differ from these
      estimates.




**Stock-Based
      Compensation**




Effective
      the first quarter of fiscal 2006, we adopted SFAS 123(R) which establishes
      accounting for stock-based awards exchanged for employee services. Accordingly,
      stock-based compensation cost is measured at grant date, based on the fair
      value
      of the award, over the requisite service period. We previously applied APB
      25
      and related interpretations, as permitted by SFAS 123.




**Three-Months
      Ended March 31, 2007 as Compared to Three-Months Ended March 31,
      2006**




**Results
      of Operations**


**Segment
      Results for the Three-Months Ended March 31, 2007**


Three
                Months Ended March 31, 2007FTS
            
            
            FTS
            
            
            SeeGroup
            
            
            Wireless
            
            
            WorldInc.
            
            
            Inc.
            
            
            Satellites
            
            
            TotalRevenuesExternal
            
            $
            -
            
            $
            702,962
            
            $
            1,098,458
            
            $
            1,801,420Internal
            
            
            375,000
            
            
            
            
            
            
            
            
            375,000Segment
                Revenues
            
            
            375,000
            
            
            702,962
            
            
            1,098,458
            
            
            2,176,420Cost
                of Goods Sold
            
            
            -
            
            
            550,623
            
            
            176,708
            
            
            727,331Gross
                Profit
            
            
            375,000
            
            
            152,339
            
            
            921,750
            
            
            1,449,089Selling,
                General, and AdministrativeExternal
            
            
            229,490
            
            
            114,686
            
            
            711,215
            
            
            1,055,391Internal
            
            
            -
            
            
            75,000
            
            
            300,000
            
            
            375,000Segment
                Selling, General, and Administrative
            
            
            229,490
            
            
            189,686
            
            
            1,011,215
            
            
            1,430,391Subtotal
            
            
            145,510
            
            
            (37,347
            )
            
            (89,465
            )
            
            18,698Change
                in fair value of derivative liabilities
            
            
            60,254
            
            
            
            
            
            
            
            
            60,254Depreciation
            
            
            (6,923
            )
            
            (10,137
            )
            
            (9,233
            )
            
            (26,293
            )Interest
            
            
            (169,016
            )
            
            -
            
            
            (508
            )
            
            (169,524
            )Net
                Income (Loss)
            
            
            29,825
            
            
            (47,484
            )
            
            (99,206
            )
            
            (116,865
            )Intersegment
                Adjustments
            
            
            (375,000
            )
            
            75,000
            
            
            300,000
            
            
            -$
            (345,175
            )
            $
            27,516
            
            $
            200,794
            
            $
            (116,865
            )Subtotal
            
            
            145,510
            
            
            (37,347
            )
            
            (89,465
            )
            
            18,698Depreciation
            
            
            (6,923
            )
            
            (10,137
            )
            
            (9,233
            )
            
            (26,293
            )138,587
            
            
            (47,484
            )
            
            (98,698
            )
            
            (7,595
            )(375,000
            )
            
            75,000
            
            
            300,000
            
            
            -(236,413
            )
            
            27,516
            
            
            201,302
            
            
            (7,595
            )







***Sales
      Revenue***




**Consolidated**




For
      the
      three months ended March 31, 2007, consolidated sales increased $167,806 or
      10.2% to $1,801,420, as compared to $1,633,614 for the three months ended March
      31, 2006. The increase in year to date consolidated sales is primarily related
      to a $207,384 year-over-year sales increase at FTS Wireless, Inc.




**FTS
      Wireless, Inc.**




For
      the
      three months ended March 31, 2007, FTS Wireless sales increased by $207,384
      or
      41.8% to $702,962 when compared to sales of $495,578 for the three months ended
      March 31, 2006. FTS Wireless generated 39% of our consolidated sales during
      the
      period ended March 31, 2007 compared to 25% of our consolidated sales during
      the
      three months ended March 31, 2006. Our sales revenue for FTS Wireless is
      primarily generated from the sale of wireless handsets, wireless accessories
      and
      related products. The increase in sales revenue at FTS Wireless is primarily
      related to the expanded network footprint of our primary wireless carrier vendor
      Metro PCS through the opening of the Orlando, Florida market.




**See
      World Satellites, Inc.**




For
      the
      three months ended March 31, 2007, See World sales decreased by $39,578 or
      3.5%
      to $1,098,458 compared to sales of $1,138,036 for the period ended March 31,
      2006. See World Satellites generated 61% of our consolidated sales during the
      period ended March 31, 2007 as compared to 75% during the period ended March
      31,
      2006. Our sales revenue for See World Satellites, Inc. is primarily generated
      from the sale, service and installation of DISH Network satellite television
      systems. The decrease in year-over-year sales is primarily related to bad
      weather conditions experienced in the western Pennsylvania area during the
      quarter ended March 31, 2007.




24





***Cost
      of Goods Sold***




**Consolidated**




For
      the
      three months ended March 31, 2007, consolidated cost of goods sold increased
      by
      $143,849 or 24.7% to $727,331, as compared to $583,482 for the three months
      ended March 31, 2006. The increase in cost of goods sold is primarily related
      to
      increased wireless handset buying and the increase in year over year sales
      at
      FTS Wireless.




**FTS
      Wireless, Inc.**




For
      the
      three months ended March 31, 2007, FTS Wireless reported an increase in cost
      of
      goods sold of $176,349 or 47.1% to $550,623 when compared to cost of goods
      sold
      of $374,274 for the three months ended March 31, 2006. The increase in cost
      of
      goods sold is primarily related to increased purchases of wireless handsets
      and
      related products as sales have increased.




**See
      World Satellites, Inc.**




For
      the
      three months ended March 31, 2007 See World Satellites reported a decrease
      in
      cost of goods sold of $32,500 or 15.5% to $176,708 for the three months ended
      March 31, 2006 when compared to cost of goods sold of $209,208 for the three
      months ended March 31, 2006. The decrease in cost of goods sold is related
      to a
      decrease in product purchasing as sales dropped slightly during the
      quarter.




***Gross
      Profits***




**Consolidated**




For
      the
      three months ended March 31, 2007, gross profits increased by $23,957 or 2.3%
      to
      $1,074,089 from $1,050,132 during the three months ended March 31, 2006. The
      increase in gross profits is attributed to the increase in sales revenue at
      FTS
      Wireless as described above. Gross profits as a percentage of sales decreased
      4.7% to 59.6% for the three months ended March 31, 2007 as compared to 64.3%
      gross profit as a percentage of sales during the three months ended March 31,
      2006. The decrease in gross profits as a percentage of sales is related to
      the
      decrease in sales at the higher margin business of See World Satellites for
      the
      year-over-year period.




**FTS
      Wireless, Inc.**




For
      the
      three months ended March 31, 2007, gross profits increased by $31,035 or 25.6%
      to $152,339 when compared to gross profit of $121,304 for the three months
      ended
      March 31, 2006. The increase in gross profits is primarily related to increased
      sales of Metro PCS wireless handsets and related increased sales of wireless
      accessories during the year-over-year period.




**See
      World Satellites, Inc.**




For
      the
      three months ended March 31, 2007, See World Satellites’ gross profit decreased
      by $6,532 or 0.7%, to $921,750 as compared to gross profits of $928,282 during
      the three months ended March 31, 2006. The slight decrease in gross profit
      is
      related to the decrease in sales at See World during the year-over-year
      period.




**Selling,
      General and Administrative**




Selling,
      General and Administrative Expenses for the three months ended March 31, 2007,
      increased $73,498 or 7.3% to $1,081,684 as compared to $1,008,186 for the three
      months ended March 31, 2006. The increase in Selling, General and Administrative
      Expenses for the three months ended March 31, 2007 was primarily related to
      increased funding costs and legal and accounting expenses relating to the
      acquisition of See World Satellites.




**Operating
      Income/Loss**




Operating
      income decreased $49,541 to a loss of $7,595 as compared to operating income
      of
      $41,946 during the three months ended March 31, 2006. The decrease in operating
      income was directly related to increased financing costs and the sales decline
      at See World Satellites.




**Net
      Loss**




Net
      loss
      decreased by $7,358,882 to $116,865 as compared to a net loss of $7,475,747
      during the three months ended March 31, 2006. The primary change to the net
      loss
      is related to the accounting change in fair value of derivative liabilities
      associated with outstanding warrants. During the three months ended March 31,
      2007, fair value derivative liability was a positive $60,254 as compared to
      a
      loss of $7,478,664 during the three months ended March 31, 2006.




25





**Interest
      Expense**




Interest
      expense increased by $130,495 to $169,524 for the three months ended March
      31,
      2007, as compared to $39,029 for the three months ended March 31, 2006. The
      year-over-year increase in interest expenses is related to increased financing
      costs incurred during the year-over-year period.




**Liquidity
      and Capital Resources**




Our
      requirements for capital are to:




o
      pay
      down debt,




o
      fund
      possible acquisitions, and




o
      provide
      working capital and funds to expand our current business.




Our
      primary source of financing during the three months ended March 31, 2007
      includes cash received from the issuance of common stock and cash generated
      from
      operations.




As
      of
      March 31, 2007, our Current Assets were $747,854 consisting of $57,617 in cash,
      $328,729 in inventories, net, $18,374 of accounts receivables and $343,134
      of
      prepaid expenses and current assets. Current Liabilities were $3,675,386,
      consisting of $1,165,474 of convertible debentures, current portion, $1,925,111
      of notes payable to related parties, $581,807 in accounts payable and accrued
      expenses and $2,994 of long-term debt, equipment loans.




At
      March
      31, 2007, we had total assets of $6,676,153 consisting of, in addition to the
      assets described above, Goodwill of $5,177,696, property and equipment, net
      of
      accumulated depreciation of $277,351, unamortized discount of convertible debt
      of $342,036, Investments of $114,734 and Deposits of $16,482.




26





**Going
      Concern Opinion**




We
      believe that our continued existence is dependent upon our ability to grow
      the
      profits of our satellite television operations and make our retail wireless
      operations profitable, and our ability to raise additional capital to reduce
      debt. Accordingly, the notes to our un-audited, interim financial statements
      express substantial doubt about our ability to continue as a going
      concern.




**Financing
      Activities**




On
      January 22, 2007 we issued 15,000,000 unregistered shares of common stock to
      a
      group of institutional investors relating to a $1,000,000
      financing.




On
      January 5, 2007, we issued 1,000,000 restricted shares of common stock relating
      to the conversion of $40,000 of debt at a price of $0.04 per share.




On
      February 14, 2007, we issued 188,857 restricted shares of common stock relating
      to the conversion of $4,627.70 of debt at a price of $0.025 per
      share.




On
      February 13, 2007, we issued 160,177 restricted shares of common stock relating
      to the conversion of $4,627.70 of debt at a price of $0.029 per
      share.




On
      March
      1, 2007, we issued 263,911 restricted shares of common stock to two investors
      relating to the conversion of $6,940.85 of debt at a price of $0.026 per
      share.




On
      March
      16, 2007, we issued 246,050 restricted shares of common stock relating to the
      conversion of $9,710.60 of debt at a price of $0.039 per share.




On
      March
      30, 2007, we issued 275,430 restricted shares of common stock to two investors
      relating to the conversion of $6,940.85 of debt at a price of $0.025 per
      share.




**Subsidiaries**




As
      of
      March 31, 2007, we had two wholly-owned subsidiaries, FTS Wireless, Inc. and
      See
      World Satellites, Inc.




**ITEM
      3. CONTROLS AND PROCEDURES.**





**Evaluation
      of Disclosure Controls and Procedures**





Our
      management evaluated, with the participation of our Chief Executive
      Officer/Interim Chief Financial Officer, the effectiveness of our disclosure
      controls and procedures as of the end of the period covered by this Quarterly
      Report on Form 10-QSB. Based on this evaluation, our Chief Executive
      Officer/Interim Chief Financial Officer has concluded that our disclosure
      controls and procedures are effective to ensure that information we are required
      to disclose in reports that we file or submit under the Securities Exchange
      Act
      of 1934 (i) is recorded, processed, summarized and reported within the time
      periods specified in Securities and Exchange Commission rules and forms, and
      (ii) is accumulated and communicated to our management, including our Chief
      Executive Officer/Interim Chief Financial Officer, as appropriate to allow
      timely decisions regarding required disclosure. Our disclosure controls and
      procedures are designed to provide reasonable assurance that such information
      is
      accumulated and communicated to our management. Our disclosure controls and
      procedures include components of our internal control over financial reporting.
      Management's assessment of the effectiveness of our internal control over
      financial reporting is expressed at the level of reasonable assurance that
      the
      control system, no matter how well designed and operated, can provide only
      reasonable, but not absolute, assurance that the control system's objectives
      will be met.




27





**Changes
      in Internal Controls**





There
      was
      no change in our internal control over financial reporting that occurred during
      the first quarter covered by this Quarterly Report on Form 10-QSB that
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.




**PART
      II - OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS.**




We
      are
      not aware of any litigation or potential litigation that could have a material
      impact on our business.




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




On
      January 22, 2007, we issued 15,000,000 unregistered shares of our common stock
      to a group of institutional investors relating to a $1,000,000
      financing.




On
      January 5, 2007, we issued 1,000,000 restricted shares of our common stock
      relating to the conversion of $40,000 of debt at a price of $0.04 per
      share.




On
      February 14, 2007, we issued 188,857 restricted shares of our common stock
      relating to the conversion of $4,627.70 of debt at a price of $.025 per
      share.




On
      February 13, 2007, we issued 160,177 restricted shares of our common stock
      relating to the conversion of $4,627.70 of debt at a price of $0.029 per
      share.




On
      March
      1, 2007, we issued 263,911 restricted shares of our common stock to two
      investors relating to the conversion of $6,940.85 of debt at a price of $0.026
      per share.




On
      March
      16, 2007, we issued 246,050 restricted shares of our common stock relating
      to
      the conversion of $9,710.60 of debt at a price of $0.039 per share.




On
      March
      30, 2007, we issued 275,430 restricted shares of our common stock to two
      investors relating to the conversion of $6,940.85 of debt at a price of $0.025
      per share.









28








**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES.**




We
      have
      filed a Registration Statement on Form SB-2. The purpose of the Registration
      Statement is to register the resale of certain securities we issued as part
      of a
      private placement completed in January 2006.Until the Registration Statement
      is
      declared effective by the Securities and Exchange Commission, we are accruing
      liquidated damages that we anticipate paying either in cash or by issuing shares
      of common stock.




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




None.




**ITEM
      5. OTHER INFORMATION.**




None.




**ITEM
      6. EXHIBITS.**








**Number**       **Description
      of Exhibits**





2.1
      Agreement and Plan of Merger between the Company and FTS Apparel, Inc., dated
      December 23, 2003 (included as Attachment A to the Definitive Proxy on Form
      DEF
      14A filed January 9, 2004, and incorporated herein by reference).




3.1
      Articles of Incorporation dated December 23, 2003 (included as Attachment B
      to
      the Definitive Proxy on Form DEF 14A filed January 9, 2004, and incorporated
      herein by reference).




3.2
      Bylaws (included as Attachment C to the Definitive Proxy on Form DEF 14A filed
      January 9, 2004, and incorporated herein by reference).





3.3
      Amendment to the Articles of Incorporation (included as exhibit 10.1 to the
      Form
      8-K filed March 13, 2006, and incorporated herein by reference).




3.4
      Certificate of Designation for Series B Convertible Preferred Stock dated March
      8, 2006 (included as Exhibit 10.1 to the Form 8-K filed March 13, 2006 and
      incorporated herein by reference).





4.1
      Form
      of Certificate for Common Shares (included as exhibit 4.1 to the Registrant's
      Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998 and
      incorporated herein by this reference).




4.2
      Subscription Agreement Form (included as exhibit 10.1 to the Form 8-K filed
      February 24, 2003, and incorporated herein by reference).




4.3
      Debenture Agreement between the Company and Dutchess Private Equities Fund,
      L.P., dated February 14, 2003 (included as exhibit 10.2 to the Form 8-K filed
      February 24, 2003, and incorporated herein by reference).




4.4
      Registration Rights Agreement between the Company and Dutchess Private Equities
      Fund, L.P., dated February 14, 2003 (included as exhibit 10.3 to the Form 8-K
      filed February 24, 2003, and incorporated herein by reference).




4.5
      Debenture Exchange Agreement between the Company and Dutchess Private Equities
      Fund, L.P., dated February 14, 2003 (included as exhibit 10.5 to the Form 8-K
      filed February 24, 2003, and incorporated herein by reference).




4.6
      Addendum to the Subscription Agreement, dated July 21, 2003 (included as Exhibit
      10.1 to the Form 8-K filed July 22, 2003, and incorporated herein by
      reference).




4.7
      Amended Debenture between the Company and Dutchess Private Equities Fund, L.P.,
      dated February 14, 2003 (included as Exhibit 10.2 to the Form 8-K filed July
      22,
      2003, and incorporated herein by reference).




4.8
      Registration Rights Agreement between the Company and Dutchess Private Equities
      Fund, L.P., dated January 9, 2004 (filed as Exhibit 10.16 to the Form SB-2
      filed
      January 28, 2004, and incorporated herein by reference).




4.9
      Subscription Agreement Form (included as exhibit 10.1 to the Form 8-K filed
      March 24, 2005, and incorporated herein by reference).




4.10
      A
      Warrant Form (included as exhibit 4.1 to the Form 8-K filed March 24, 2005,
      and
      incorporated herein by reference).




4.11
      B
      Warrant Form (included as exhibit 4.2 to the Form 8-K filed March 24, 2005,
      and
      incorporated herein by reference).




4.12
      Promissory Note between the Company and Dutchess Private Equities Fund, II,
      L.P., dated October 27, 2004 (included as exhibit 4.11 to the Form SB-2 filed
      June 17, 2005, and incorporated herein by reference).




4.13
      Promissory Note between the Company and Dutchess Private Equities Fund, II,
      L.P., dated January 10, 2005 (included as exhibit 4.12 to the Form SB-2 filed
      June 17, 2005, and incorporated herein by reference).




4.14
      A
      Warrant Form (included as Exhibit 4.1 to the Form 8-K filed January 5, 2006,
      and
      incorporated herein by reference).




4.15
      B
      Warrant Form (included as Exhibit 4.2 to the Form 8-K filed January 5, 2006,
      and
      incorporated herein by reference).




4.16
      Form
      of Common Stock Purchase Warrant between the Company and Olympus Securities,
      (included as exhibit 4.16 to the Form SB-2/A filed July 5, 2006, and
      incorporated herein by reference).




10.1
      Subscription Agreement Form (included as exhibit 10.1 to the Form 8-K filed
      February 24, 2003, and incorporated herein by reference).




10.2
      Debenture Agreement between the Company and Dutchess Private Equities Fund,
      LP,
      dated February 14, 2003 (included as exhibit 10.2 to the Form 8-K filed February
      24, 2003, and incorporated herein by reference).




10.3
      Registration Rights Agreement between the Company and Dutchess Private Equities
      Fund, LP, dated February 14, 2003 (included as exhibit 10.3 to the Form 8-K
      filed February 24, 2003, and incorporated herein by reference).




10.4
      Escrow Agreement between the Company and Dutchess Private Equities Fund, LP,
      dated February 14, 2003 (included as exhibit 10.4 to the Form 8-K filed February
      24, 2003, and incorporated herein by reference).




10.5
      Debenture Exchange Agreement between the Company and Dutchess Private Equities
      Fund, LP, dated February 14, 2003 (included as exhibit 10.5 to the Form 8-K
      filed February 24, 2003, and incorporated herein by reference).




10.6
      Addendum to the Subscription Agreement, dated July 21, 2003 (included as Exhibit
      10.1 to the Form 8-K filed July 22, 2003, and incorporated herein by reference).




10.7
      Amended Debenture between the Company and Dutchess Private Equities Fund, LP,
      dated February 14, 2003 (included as Exhibit 10.2 to the Form 8-K filed July
      22,
      2003, and incorporated herein by reference).




10.8
      Memorandum of Understanding between the Company and Malsha Imports, Inc., dated
      February 28, 2003 (included as Exhibit 10.11 to the Form SB-2/A filed September
      15, 2003, and incorporated herein by reference).




10.9
      Confidentiality and No Conflict Agreement between the Company and American
      Connections, LLC, dated February 28, 2003 (included as Exhibit 10.12 to the
      Form
      SB-2/A filed September 15, 2003, and incorporated herein by
      reference).




10.10
      Authorized Subcontractor Agreement between the Company and American Connections,
      LLC, dated February 28, 2003 (included as Exhibit 10.13 to the Form SB-2/A
      filed
      September 15, 2003, and incorporated herein by reference).




10.11
      Lease Agreement between the Company and American Connections Florida, LLC,
      dated
      May 22, 2003 (included as Exhibit 10.14 to the Form SB-2/A filed September
      15,
      2003, and incorporated herein by reference).




10.12
      Investment Agreement between the Company and Dutchess Private Equities Fund,
      LP,
      dated January 9, 2004 (included as exhibit 10.15 to the Form SB-2 filed January
      28, 2004, and incorporated herein by reference).




10.13
      Registration Rights Agreement between the Company and Dutchess Private Equities
      Fund, LP, dated January 9, 2004 (included as Exhibit 10.16 to the Form SB-2
      filed January 28, 2004, and incorporated herein by reference).




10.14
      Placement Agent Agreement between the Company, Dutchess Private Equities Fund,
      LP, and Charleston Capital Securities, dated January 9, 2004 (included as
      Exhibit 10.17 to the Form SB-2 filed January 28, 2004, and incorporated herein
      by reference).




10.15
      Consulting Agreement between the Company and W. Scott McBride, dated January
      15,
      2004 (included as exhibit 99.1 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.16
      Corporate Consulting Agreement between the Company and Theodore J. Smith, Jr.,
      dated January 28, 2004 (included as exhibit 99.2 to the Form S-8 filed February
      3, 2004, and incorporated herein by reference).




10.17
      Consulting Agreement between the Company and Mike DeGirolamo, dated January
      5,
      2004 (included as exhibit 99.3 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.18
      Consulting Agreement between the Company and Jeff Teischer, dated January 5,
      2004 (included as exhibit 99.4 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.19
      Consulting Agreement between the Company and David Taylor, dated December 12,
      2003 (included as exhibit 99.5 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.20
      Consulting Agreement between the Company and Pablo Oliva, dated November 12,
      2003 (included as exhibit 99.6 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.21
      Consulting Agreement between the Company and Tommy Hollman, dated January 27,
      2004 (included as exhibit 99.7 to the Form S-8 filed February 3, 2004, and
      incorporated herein by reference).




10.22
      Compensation Agreement between the Company, W. Scott McBride, David Rasmussen,
      James H. Gilligan, and Scott Gallagher, dated January 29, 2004 (included as
      exhibit 99.8 to the Form S-8 filed February 3, 2004, and incorporated herein
      by
      reference).




10.23
      Lease Agreement between the Company and Investments Limited, dated August 25,
      2004 (included as exhibit 10.1 to the Form 8-K filed September 9, 2004, and
      incorporated herein by reference).




10.24
      Consulting Agreement between the Company and Pablo Oliva, dated October 26,
      2004
      (included as exhibit 99.1 to the Form S-8 filed January 11, 2005, and
      incorporated herein by reference).




10.25
      Corporate Consulting Agreement between the Company and Theodore J. Smith, Jr.,
      dated October 26, 2004 (included as exhibit 99.2 to the Form S-8 filed January
      11, 2005, and incorporated herein by reference).




10.26
      Subscription Agreement Form (included as exhibit 10.1 to the Form 8-K filed
      March 24, 2005, and incorporated herein by reference).




10.27
      Promissory Note between the Company and Alpha Capital Aktiengesellschaft
      (included as Exhibit 10.1 to the Form 8-K filed January 5, 2006, and
      incorporated herein by reference).




10.28
      Subscription Agreement between the Company and certain subscribers, dated
      December 29, 2005 (included as Exhibit 10.2 to the Form 8-K filed January 5,
      2006, and incorporated herein by reference).




10.29
      Guaranty Agreement between the Company and certain lenders, dated December
      29,
      2005 (included as Exhibit 10.3 to the Form 8-K filed January 5, 2006, and
      incorporated herein by reference).




10.30
      Security Agreement between the Company and certain lenders, dated December
      29,
      2005 (included as Exhibit 10.4 to the Form 8-K filed January 5, 2006, and
      incorporated herein by reference).




10.31
      Security and Pledge Agreement between the Company and certain lenders, dated
      December 29, 2005 (included as Exhibit 10.5 to the Form 8-K filed January 5,
      2006, and incorporated herein by reference).




10.32
      Collateral Agent Agreement between the Company and certain lenders (included
      as
      Exhibit 10.6 to the Form 8-K filed January 5, 2006, and incorporated herein
      by
      reference).




10.33
      Promissory Note between the Company and Richard E. Miller, dated January 3,
      2006
      (included as Exhibit 10.1 to the Form 8-K filed January 9, 2006, and
      incorporated herein by reference).




10.34
      Stock Purchase Agreement between the Company and Richard E. Miller, dated
      January 3, 2006 (included as Exhibit 10.2 to the Form 8-K filed January 9,
      2006,
      and incorporated herein by reference).




10.35
      Stock Escrow Agreement between the Company, Richard E. Miller, and Lambert&
Martineau, attorneys at law, dated January 3, 2006 (included as Exhibit 10.3
      to
      the Form 8-K filed January 9, 2006, and incorporated herein by
      reference).




10.36
      Amendment Number 1 to the Retailer Agreement between the Company and EchoStar
      Satellite LLC, dated March 31, 2006 (included as Exhibit 10.1 to the Form 8-K
      filed March 31, 2006, and incorporated herein by reference).




10.37
      Amendment to extend Authorized Regional Service Provider Agreement between
      the
      Company and Dish Network Service LLC dated March 31, 2006 (included as Exhibit
      10.2 to the Form 8-K filed March 31, 2006, and incorporated herein by
      reference).




10.38
      Letter Agreement between the Company and EchoStar Satellite LLC, dated March
      27
      2006 (included as exhibit 10.1 to the Form 8-K filed April 5, 2006 and
      incorporated herein by reference).




10.39
      Employment Agreement between the Company and Scott Gallagher dated November
      15,
      2005 with amended start date of February 1, 2007 (included as exhibit 10.27
      to
      the Form 10-QSB filed May 15, 2006 and incorporated herein by
      reference).




10.40
      Employment Agreement between the Company and David Rasmussen dated February
      1,
      2006 (included as exhibit 10.28 to the Form 10-QSB filed May 15, 2006 and
      incorporated herein by reference).




10.41
      Promissory Note between the Company and Alpha Capital Anstalt, dated January
      22,
      2007 (included as exhibit 10.1 to the Form 8-K filed January 26, 2007 and
      incorporated herein by reference).




10.42
      Promissory Note between the Company and Ellis International, Ltd., dated January
      22, 2007 (included as exhibit 10.2 to the Form 8-K filed January 26, 2007 and
      incorporated herein by reference).




10.43
      Promissory Note between the Company and Platinum Long Term Growth V, dated
      January 22, 2007 (included as exhibit 10.3 to the Form 8-K filed January 26,
      2007 and incorporated herein by reference).




10.44
      Promissory Note between the Company and Whalehaven Capital Fund Limited, dated
      January 22, 2007 (included as exhibit 10.4 to the Form 8-K filed January 26,
      2007 and incorporated herein by reference).




10.45
      Assignment and Amendment No. 1 to Note Agreement by and among the Company,
      Richard E. Miller and Assignees, dated January 22, 2007 (included as exhibit
      10.5 to the Form 8-K filed January 26, 2007 and incorporated herein by
      reference).





14.1
      Corporate Code of Conduct and Ethics (filed as exhibit 14.1 to the Form 10-KSB
      filed April 14, 2004, and incorporated herein by reference).





31.1
      Certification of the Chief Executive Officer and Interim Chief Financial Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.





32.1
      Certification of Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.




**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Company has
      caused this report to be signed on its behalf by the undersigned thereunto
      duly
      authorized.




**FTS
      GROUP, INC.**





*/s/
                Scott Gallagher*Scott
                GallagherChief
                Executive Officer,Interim
                Chief Financial Officer and
              Principal
                Accounting OfficerMay
                21, 2007




29