**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 SEPTEMBER 30, 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.)





300
      State St. East, Suite 226, Oldsmar, Florida 34677


(Address
      of principal executive offices)





(813)
      749-8805


(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
      September 30, 2007, we had 159,234,925 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
            12Item
                3. Controls and
                Procedures
            
            15**PART
                II. OTHER INFORMATION**Item
                1. Legal
                Proceedings
            
            15Item
                2. Unregistered Sales of Equity Securities
                and Use of Proceeds
            15Item
                3. Defaults of Senior
                Securities
            
            16Item
                4. Submission of Matters to a Vote
                of
                Security Holders
            16Item
                5. Other Information
            
            16Item
                6. Exhibits
            
            16







**PART
      I - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL
      STATEMENTS
      .**







Condensed
                Consolidated Financial Statements (Unaudited)
            **Page**Balance
              Sheets - September 30, 2007 and December 31,
              2006
            2Statements
                of Operations - Three and Nine
                months ended September 30, 2007 and 2006
            3Statements
                of Cash Flows- Nine months ended
                September 30, 2007 and 2006
            4Notes
                to Condensed Consolidated Financial
                Statements
            5






1











Table
      of
      Contents






**FTS
                  GROUP, INC. AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED BALANCE SHEETS****SEPTEMBER
                  30, 2007 AND DECEMBER  31, 2006**Assets
              
              2007
              2006Current
                  assets:Cash
                  and cash equivalents
              
              $
              25,030
              $         115,056Restricted
                  cash
              
              
              
              -
              -Accounts
                  receivable
              
              
              
              34,956
              130,025Inventories,
                  net
              
              
              
              365,305
              373,734Prepaid
                  expenses and current assets
              
              448,925
              247,686Total
                  current assets
              
              
              874,216
              866,501Property
                  and equipment, net of accumulated depreciation
              
              157,642
              303,641Domain
                  portfolio
              
              
              
              236,511
              -Unamortized
                  discount on convertible debt
              
              168,485
              232,925Unamortized
                  debt issuance costs
              
              -
              29,573Investments
              
              
              
              -
              92,505Goodwill
              
              
              
              
              5,177,696
              5,177,696Deposits
              
              
              
              
              16,482
              16,482Total
                  assets
              
              
              $
              6,631,032
              $      6,719,323Liabilities
                  and Stockholders' EquityCurrent
                  liabilities:Accounts
                  payable and accrued expenses
              $
              735,235
              $        548,707Current
                  portion of notes payable to related parties, net of
                  discount
              
              2,567,817
              1,820,215Convertible
                  debentures-current portion
              
              1,154,074
              1,238,321Current
                  installments of long-term debt-equipment loans
              
              -
              4,824Total
                  current liabilities
              
              4,457,126
              3,612,067Fair
                  value of derivative liabilities
              
              
              286,972
              453,039Convertible
                  debentures
              
              
              
              
              -Long-term
                  debt to related parties, less current installments
              
              -
              1,000,000Total
                  liabilities
              
              
              
              4,744,098
              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 September 30,
                  2007.
              10,000
              10,000Common
                  stock, $.001 par value.  Authorized 855,000,000
                  shares:159,234,925
                  shares issued and outstanding at September 30, 2007.137,650,469
                  shares issued and outstanding at December 31, 2006.
              
              159,235
              137,650Additional
                  paid-in capital
              
              
              12,598,452
              12,231,626Accumulated
                  deficit
              
              
              
              (10,867,420)
              (10,704,226)Total
                  stockholders' equity
              
              1,900,267
              1,675,050Deferred
                  stock compensation
              
              
              (13,333)
              (20,833)Total
                  liabilities and stockholders' equity
              $
              6,631,032
              $      6,719,323See
                  accompanying notes to consolidated financial statements.




2





Table
      of
      Contents





**FTS
                  GROUP, INC. AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS****FOR THE
                  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND
                  2006**Three
                  Months Ended September 30,
              
              
              Nine
                  Months ended September 302007
              
              
              2006
              
              
              2007
              
              
              2006(Restated)
              
              
              
              
              
              (Restated)Revenues
              
              $
              1,826,229
              
              
              $
              1,645,247
              
              
              $
              5,393,322
              
              
              $
              4,912,254Cost
                  of goods sold
              
              
              740,754
              
              
              
              530,754
              
              
              
              2,187,495
              
              
              
              1,586,747Gross
                  profit
              
              
              1,085,475
              
              
              
              1,114,493
              
              
              
              3,205,827
              
              
              
              3,325,507General and administrative
                  expenses
              
              
              1,214,015
              
              
              
              1,008,030
              
              
              
              3,294,968
              
              
              
              3,082,858Income
                  (loss) from operations
              
              
              (128,540
              )
              
              
              106,463
              
              
              
              (89,141
              )
              
              
              242,649Other income
                  (expense)Change
                  in fair value of derivative liabilities
              
              
              96,132
              
              
              
              315,966
              
              
              
              166,067
              
              
              
              (336,909
              )Interest
              
              
              (13,393
              )
              
              
              (74,828
              )
              
              
              (240,115
              )
              
              
              (184,420
              )82,739
              
              
              
              241,138
              
              
              
              (74,048
              )
              
              
              (521,329
              )Net income
                  (loss)
              
              $
              (45,801
              )
              
              $
              347,601
              
              
              $
              (163,189
              )
              
              $
              (278,680
              )Per share
                  information:Weighted average shares
                  outstandingBasic
              
              
              157,574,154
              
              
              
              114,977,066
              
              
              
              154,142,294
              
              
              
              112,767,697Diluted
              
              
              157,574,154
              
              
              
              117,230,110
              
              
              
              154,142,294
              
              
              
              122,383,360Net loss per
                  common share:Basic
              
              $
              (0.00
              )
              
              $
              0.00
              
              
              $
              (0.00
              )
              
              $
              (0.00
              )Diluted$
              (0.00
              )
              
              $
              0.00
              
              
              $
              (0.00
              )
              
              $
              (0.00
              )See
                  accompanying notes to consolidated financial statements.


3





Table
      of
      Contents





**FTS
                  GROUP, INC. AND
                  SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS****NINE
                  MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**2007
              
              2006(Restated)Cash
                  flows from operating activities:Net
                  income (loss)
              
              
              $
              (163,189)
              $
              (278,680)Adjustments
                  to reconcile net income (loss) to net cash provided
                  by(used
                  in) operating activities:Depreciation
                  and amortization
              
              
              366,539
              
              291,042Common
                  shares issued for services
              
              -
              
              98,400Amortization
                  of debt discount
              
              
              13,775
              
              -Amortization
                  of deferred stock compensation
              
              7,500
              
              6,667Loss
                  on disposal of assets
              
              
              
              87,607
              
              -Change
                  in fair value of derivative liabilities
              
              (166,067)
              
              336,909(Increase)
                  decrease in operating assets:Accounts
                  receivable
              
              
              
              95,069
              
              (72,191)Inventories
              
              
              
              8,429
              
              (192,152)Prepaid
                  expenses
              
              
              
              (201,239)
              
              338,947Other
                  assets
              
              
              
              -
              
              (1,043)Increase
                  (decrease) in operating liabilities:Accounts
                  payable and accrued expenses
              
              197,990
              
              (356,808)Net
                  cash provided by (used in) operating activities
              
              246,414
              
              171,091Cash
                  flows from investing activities:Net
                  assets 100% acquisition of See World Satellites, Inc.
              
              -
              
              (206,100)Investment
                  in private entities
              
              
              
              (35,874)
              
              (59,339)Capital
                  expenditures for property and equipment
              
              (14,860)
              
              (88,177)Expenditures
                  for acquisition of intellectual property
              
              (108,132)Proceeds
                  from funding restricted for investment in acquisition
              
              -
              
              (440,000)Release
                  of restriction on funding proceeds for investment in
                  acquisition
              
              -
              
              1,060,000Payment
                  to See World Satellites, Inc. acquisition
              
              -
              
              (1,000,000)Net
                  cash provided by (used in) investing activities
              
              (158,866)
              
              (733,616)Cash
                  flows from financing activities:Proceeds
                  from issuance of stock
              
              
              
              -
              
              665,964Proceeds
                  from convertible debentures
              
              
              -
              
              30,000Proceeds
                  from notes payable related parties
              
              45,000
              
              -Repayments
                  of notes payable-truck loans
              
              (4,824)
              
              (12,411)Repayments
                  of notes payable to individuals
              
              (162,500)
              
              635,002Repayment
                  of loans from related parties
              
              (55,250)
              
              (973,753)Net
                  cash provided by (used in) financing activities
              
              (177,574)
              
              344,802Net
                  decrease in cash
              
              
              (90,026)
              
              (217,723)Cash
                  at beginning of year
              
              
              
              115,056
              
              243,079Cash
                  at end of year
              
              
              $
              25,030
              $
              25,356Supplemental
                  schedule of cash flow information:Interest
                  paid
              
              
              
              $
              4,822
              
              4,524Supplemental
                  disclosure of non-cash investing and financing activities:Stock
                  issued in exchange for convertible debentures
              $
              136,647
              
              8,085Acquisition
                  of See World Satellites, Inc.Final
                  negotiated purchase price of 100% of See World Satellites, Inc.
                  stock
              $
              *-*
              
              5,500,000Amount
                  financed through formal promissory note
              
              *-*
              
              (3,500,000)Paid
                  in preferred stock of FTS Group, Inc.
              
              *-*
              
              (1,000,000)Due
                  upon contact execution completion-restricted cash at
                  3/31/2006
              
              *-*
              
              (500,000)Cash
                  paid for See World Satellites, Inc. acquisition
              $
              *-*
              
              500,000Stock
                  issued as loan inducements
              
              $
              251,764
              $
              -Reassignment
                  of note payable from Richard Miller to Funds
              $
              1,000,000
              $See
                  accompanying notes to consolidated financial statements.


4





Table
      of
      Contents




**FTS
      GROUP, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30, 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 wireless subsidiaries, See World Satellites, Inc. and FTS Wireless,
      Inc., the Company operates a diversified wireless business engaged in the
      installation and 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
      installer and distributor of satellite television systems and related products
      and services for DISH Networks in the western Pennsylvania marketplace. The
      Company's wholly-owned subsidiary, FTS Wireless, Inc., is a retail distributor
      of wireless communications products and accessories primarily operating in
      the
      gulf coast market of Florida. Through its third wholly-owned subsidiary, Elysium
      Internet, Inc., the Company operates a diversified Internet advertising and
      directory business.  Elysium owns and operates a network of
      advertising related web sites through its extensive domain portfolio, as well
      as
      a business directory targeting the therapeutic provider community. Elysium
      currently has several other directory sites under development.




**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.




**Principles
      of Consolidation**




The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries: FTS Wireless, Inc., See World Satellites, Inc. and
      Elysium Internet, Inc. All significant inter-company 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 and nine month periods ended September 30, 2007 are not
      indicative of the results that may be expected for the year ending December
      31,
      2007.




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.




**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.






5







Table
      of
      Contents





**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 September 30, 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. The Company also recognizes revenue when a customer signs up for
      advertising through its Internet directory site or when it generates Pay Per
      Click (“PPC”) advertising revenue through its Internet affiliate
      relationships.




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.




**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
      and nine months ended September 30, 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 was $90,854 and
      $74,629 for the nine months ended September 30, 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.






6







Table
      of
      Contents




**Fair
      Value of Derivative Financial Instruments**





The
      Company estimates the fair value of complex derivative financial instruments
      that are required to be carried as liabilities at fair value pursuant to
      Statement on Financial Accounting Standards No. 133 *Accounting for
      Derivative Financial Instruments and Hedging Activities (SFAS
      133).*




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
      SFAS 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 principles. SFAS No. 154 requires
      retrospective application of changes in accounting principles 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 FASB 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 has not impacted the financial statements of the
      Company.




In
      December 2004, the FASB 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 has
      not impacted the financial statements of the Company.




In
      November 2004, the 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 has impacted the financial statements of
      the Company.




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




Major
      classes of property and equipment, together with their estimated useful lives,
      consisted of the following at September 30, 2007 and December 31,
      2006:




**Years**
              
              
              **2007**
              
              
              **2006****Leasehold
                  Improvements**
              
              
              5
              
              
              4,032
              
              
              142,822**Furniture
                  and Fixtures**
              
              
              5
              
              
              208,252
              
              
              194,340**Equipment**
              
              
              3-5
              
              
              120,583
              
              
              120,583**Vehicles**
              
              
              3
              
              
              18,777
              
              
              25,777**Total
                  property and equipment**
              
              
              
              
              
              351,644
              
              
              483,522**Less:
                  accumulated depreciation**
              
              
              
              
              
              (194,002
              )
              
              (179,881
              )**Net
                  property and equipment**
              
              
              
              
              
              157,642
              
              
              303,641
  Depreciation
          expense for the nine months ended September 30, 2007 and 2006 was $72,575
          and $92,237, respectively


7










Table
      of
      Contents




**(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 in Secured Convertible Promissory Notes to
      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 an
      additional $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 Notes. 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;
      and





-
      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 and nine months ended September 30, 2007 and 2006 is eliminated
      by
      net operating loss carry forwards.




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




The
      Company leases real property for its six retail locations and its corporate
      office. Four of the locations have lease terms ranging from one to five years
      while two locations are on a month-to-month basis.




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




AnnualYear
                  Ending
              
              Payments2007
              $
              28,2502008
              
              93,6002009
              
              52,8002010
              
              52,8002011
              
              52,8002012
              
              17,600$
              297,850


Rent
      expense was $90,982 and $92,849 for the nine months ended September 30, 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 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
      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
      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
      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
      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.





On
      May 4,
      2007, the Company issued 230,303 restricted shares of common stock to an
      institutional investor relating to the conversion of $3,800 of debt at a price
      of $0.0165 per share.





On
      June
      11, 2007, the Company issued 199,117 restricted shares of common stock to an
      institutional investor relating to the conversion of $3,800 of debt at a price
      of $0.01908 per share.





On
      June
      14, 2007, the Company issued 705,882 restricted shares of common stock to an
      institutional investor relating to the conversion of $14,400 of debt at a price
      of $0.02040 per share.





On
      June
      18, 2007, the Company issued 245,098 restricted shares of common stock to an
      institutional investor relating to the conversion of $5,000 of debt at a price
      of $0.02040 per share.





On
      July
      9, 2007, the Company issued 588,235 restricted shares of common stock to an
      institutional investor relating to the conversion of $11,000 of debt at a price
      of $0.01870 per share.





On
      July
      30, 2007, the Company issued 208,905 restricted shares of common stock to an
      institutional investor relating to the conversion of $3,800 of debt at a price
      of $0.01819 per share.





On
      July
      30, 2007, the Company issued 750,000 restricted shares of common stock to an
      investor relating to a $25,000 loan agreement entered into.





On
      September 18, 2007, the Company issued 1,522,491 shares of common stock to
      an
      institutional investor relating to the conversion of $22,000 of debt at a price
      of $0.0145 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."






8





Table
      of
      Contents




**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, no shares of Series A are outstanding. All Series A Preferred
      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 dividends
      are payable in cash and are cumulative. During the third through fifth
      years 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 Series A 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 Series A Preferred Stock are entitled
      to one vote for each share held of record. Holders of the Series
      A Preferred Stock vote with holders of the common stock as one
      class.




At
      June
      30, 2007, a total of 1,000,000 shares were designated Series B Convertible
      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 pro rata 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. As of June 1, 2006,
      the shares of Series B Convertible Preferred Stock are 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 of shares
      of Series B Convertible Preferred Stock being converted by 25.




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




**Options**




The
      Company had a Non-Qualified Stock Option and Stock Grant 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 September 30, 2007:




The
      Company had 3,000,000 warrants outstanding relating to a dividend declared
      to
      stockholders of record on August 27, 2004. The warrants had an exercise price
      of
      $0.25 and expired on August 7, 2007.




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, Class A and
      Class B Warrants, for each share of common stock purchased. The B Warrants
      had
      an initial exercise price of $0.08 and the 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.




The
      table
      below summarizes warrants issued prior to December 2005 and still
      outstanding as of the period ended Septmber 30, 2007.





**September 30,
                2007**
            
            
            **September 30,
                2007****Underlying
                Shares**
            
            
            **Exercise
                Price**Warrants
                issued during 2000
            
            
            1,036,000
            
            $
            1.50Warrants
                issued during 2004(Expired
                on August 7, 2007)
            
            
            0
            
            $
            0Warrants
                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 Class A and Class
      B Warrants, for each share of common stock purchased. The A Warrants have
      an exercise price of $0.02868 per share and the B Warrants have an exercise
      price of $0.0239 per share.






9





Table
      of
      Contents





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 Class A and B Warrants outstanding as of September 30,
      2007, relating to the financing closed on December 29, 2005.





**September
              30, 2007**
            
            
            **September 30,
              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
      September 30, 2007, 1,185,350 restricted shares due to one of the investors
      remained unissued.




**(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 stockholder 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, pro forma 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
      transactions between January 1, 2006 through January 2, 2006 to be immaterial,
      pro forma presentation is deemed unnecessary.




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




At
      September 30, 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 Satellites, Inc. 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 was due within 30 days of the effective date of a
      new
      five-year contract among 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 September 30, 2007. The Company filed an 8-K with
      the terms and conditions of this note on January 5, 2006.






10





Table
      of
      Contents






**(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 from 2001 to September 30,
      2007.







**September 30,
                2007**
            
            
            **September
                30, 2006**Net
                Income/ (Loss) as reported
            
            $
            (163,189
            )
            
            $
            (278,680
            )Basic
                and diluted earnings per share as reported
            
            $
            (0.00
            )
            
            $
            (0.00
            )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
            
            $
            (163,189
            )
            
            $
            (278,680
            )Pro-forma
                basic and diluted earnings per share as if the fair-value based method
                had
                been applied to all awards.
            
            $
            (0.00
            )
            
            $
            (0.00
            )







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




The
      Company has three reportable segments and corporate overhead: (1) product sales
      for wireless products segment, includes sales of wireless handsets and
      accessories; (2) service revenues for installments of satellites segment,
      includes sales of satellite dish equipment and installations; (3) sales revenue
      generated through Internet advertising and affiliate programs and (4) a holding
      company for current and 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:




Three
                  Months Ended September 30,
              
              
              Nine
                  Months ended September 302007
              
              
              2006
              
              
              2007
              
              
              2006**Revenues:**Service
                  revenue - See World Satellites, Inc.
              
              $
              1,186,663
              
              
              $
              1,233,984
              
              
              $
              3,418,361
              
              
              $
              3,564,075Product
                  sales - FTS Wireless, Inc.
              
              $
              620,092
              
              
              $
              411,263
              
              
              $
              1,955,487
              
              
              $
              1,348,179Internet
                  Media Revenue-Elysium Internet, Inc.
              
              $
              19,474
              
              
              $
              -
              
              
              $
              19,474
              
              
              $
              -Corporate
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -$
              1,826,229
              
              
              $
              1,645,247
              
              
              $
              5,393,322
              
              
              $
              4,912,254**Income
                  (loss) from operations:**Service
                  revenue - See World Satellites, Inc.
              
              $
              208,265
              
              
              $
              356,193
              
              
              $
              679,101
              
              
              $
              977,448Product
                  sales - FTS Wireless, Inc.
              
              $
              (118,692
              )
              
              $
              (71,642
              )
              
              $
              (109,956
              )
              
              $
              (134,105
              )Internet
                  Media Revenue-Elysium Internet, Inc.
              
              $
              10,087
              
              
              $
              -
              
              
              $
              10,087
              
              
              $
              -Corporate
              
              $
              (228,200
              )
              
              $
              (178,088
              )
              
              $
              (668,373
              )
              
              $
              (600,694
              )$
              (128,540
              )
              
              $
              106,463
              
              
              $
              (89,141
              )
              
              $
              242,649**Identifiable
                  assets:**Service
                  revenue - See World Satellites, Inc.
              
              
              
              
              
              
              
              
              
              $
              6,049,511
              
              
              $
              5,807,205Product
                  sales - FTS Wireless, Inc.
              
              
              
              
              
              
              
              
              
              $
              75,523
              
              
              $
              289,866Domains-Elysium
                  Internet, Inc.
              
              
              
              
              
              
              
              
              
              $
              240,371
              
              
              $
              -Corporate
              
              
              
              
              
              
              
              
              
              $
              265,627
              
              
              $
              622,252$
              6,631,032
              
              
              $
              6,719,323


11





Table
      of
      Contents




**(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 Principles 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 10-QSB
      for the period ended September 30, 2006 to include fair value derivative
      accounting and reclassification of certain other financial items.





The
      restatement also reclassified 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 stockholders' 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**Nine
                  months ended September 30, 2006**Interest
                  income (expense)
              
              $
              (110,980
              )
              
              $
              (73,440
              )
              
              $
              (184,420
              )Change
                  in fair value of derivative liabilities
              
              $
              -
              
              
              $
              (336,909
              )
              
              $
              (336,909
              )Total
                  other income (expenses)
              
              $
              (110,980
              )
              
              $
              (410,349
              )
              
              $
              (521,329
              )Net
                  income (loss)
              
              $
              131,669
              
              
              $
              (410,349
              )
              
              $
              (278,680
              )As
              
              
              2006previously
              
              
              Restatement
              
              
              Asreported
              
              
              adjustments
              
              
              restated**September
                  30, 2006**Investments
              
              $
              -
              
              
              $
              59,339
              
              
              $
              59,339Prepaid
                  expenses
              
              $
              199,714
              
              
              $
              (82,672
              )
              
              $
              117,042Accounts
                  payable and accrued expenses
              
              $
              145,483
              
              
              $
              73,440
              
              
              $
              218,923Fair
                  value of derivative liabilities
              
              $
              -
              
              
              $
              2,190,851
              
              
              $
              2,190,851Accumulated
                  deficit
              
              $
              (10,174,095
              )
              
              $
              (2,040,180
              )
              
              $
              (12,214,275
              )Deferred
                  Compensation
              
              $
              -
              
              
              $
              23,333
              
              
              $
              23,333


In
      addition, two reclassifications are required for previously reported activity.
      First, 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. Second, 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.




**(15) 
      Subsequent Events**




Subsequent
      to the period ended September 30, 2007, the Company acquired intellectual
      property relating to a patent application filed with the United States Patent
      and Trademark Office relating to a patent application submitted by an inventor
      that covers the process of a cell phone translation device whereby the filed
      patent application illustrates the process of translating languages from one
      to
      another (Spanish to English and English to Spanish, etc.) over a cellular
      network.




**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 and nine months ended September 30, 2007 and the same
      period in 2006. This discussion and analysis should be read in conjunction
      with
      the unaudited 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. 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 the risks described
      in this report, our annual report on Form 10-KSB, as amended, 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. 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.






12





Table
      of
      Contents




**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 two of our 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 six retail
      wireless locations in the Gulf Coast market of Florida. All of the retail
      locations are leased properties. Through our third wholly-owned subsidiary,
      Elysium Internet, Inc., an online media Company focused on developing and
      acquiring a subscription based targeted Internet directory business. We own
      and
      operate an Internet media and advertising business. We generate revenue by
      selling advertising directly to customers through our directory web sites as
      well as through affiliate programs that leverage the direct navigation Internet
      traffic of our domain portfolio.





**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.




**Fair
      Value of Derivative Financial Instruments**




We
      estimate the fair value of complex derivative financial instruments that are
      required to be carried as liabilities at fair value pursuant to Statement on
      Financial Accounting Standards No. 133 *Accounting for Derivative Financial
      Instruments and Hedging Activities (SFAS 133).*





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 SFAS 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., See World Satellites, Inc. and
      Elysium Internet, Inc. All significant inter-company 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 and nine month periods ended September 30, 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.




**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 (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. 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 September 30,
      2007 or December 31, 2006.




**Revenue
      Recognition**




Through
      our wholly-owned subsidiary, FTS Wireless, Inc., 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.





Through
      our wholly-owned subsidiary Elysium Internet, Inc., we recognize revenue when
      we
      sell advertising to a customer on our Internet directory as well as when we
      realize Pay Per Click,or PPC, sales through our affiliate channel
      partners.






13





Table
      of
      Contents




**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 and nine months ended September 30, 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.




**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.






**Results
      of Operations**


**Segment
      Results for the Three and Nine Months Ended September 30, 2007 and
      2006**


Three
                  Months Ended September 30, 2007
              
              
              
              
              
              Nine
                  Months Ended September 30, 2007FTS
              
              
              FTS
              
              
              See
              
              
              Elysium
              
              
              
              
              
              FTS
              
              
              FTS
              
              
              See
              
              
              ElysiumGroup
              
              
              Wireless
              
              
              World
              
              
              Internet
              
              
              
              
              
              Group
              
              
              Wireless
              
              
              World
              
              
              InternetInc.
              
              
              Inc.
              
              
              Satellites
              
              
              Inc.
              
              
              Total
              
              
              Inc.
              
              
              Inc.
              
              
              Satellites
              
              
              Inc.
              
              
              TotalRevenuesExternal
              
              $
              -
              
              
              $
              620,092
              
              
              $
              1,186,663
              
              
              $
              19,474
              
              
              $
              1,826,229
              
              
              $
              -
              
              
              $
              1,955,487
              
              
              $
              3,418,361
              
              
              $
              19,474
              
              
              $
              5,393,322Internal
              
              
              375,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              375,000
              
              
              
              1,125,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,125,000Segment
                  Revenues
              
              
              375,000
              
              
              
              620,092
              
              
              
              1,186,663
              
              
              
              19,474
              
              
              
              2,201,229
              
              
              
              1,125,000
              
              
              
              1,955,487
              
              
              
              3,418,361
              
              
              
              19,474
              
              
              
              6,518,322Cost
                  of Goods Sold
              
              
              -
              
              
              
              539,637
              
              
              
              191,730
              
              
              
              9,387
              
              
              
              740,754
              
              
              
              -
              
              
              
              1,629,073
              
              
              
              549,035
              
              
              
              9,387
              
              
              
              2,187,495Gross
                  Profit
              
              
              375,000
              
              
              
              80,455
              
              
              
              994,933
              
              
              
              10,087
              
              
              
              1,460,475
              
              
              
              1,125,000
              
              
              
              326,414
              
              
              
              2,869,326
              
              
              
              10,087
              
              
              
              4,330,827Selling,
                  General, & AdministrativeExternal
              
              
              220,868
              
              
              
              108,580
              
              
              
              777,385
              
              
              
              -
              
              
              
              1,106,833
              
              
              
              646,735
              
              
              
              325,496
              
              
              
              2,162,606
              
              
              
              -
              
              
              
              3,134,837Internal
              
              
              -
              
              
              
              75,000
              
              
              
              300,000
              
              
              
              -
              
              
              
              375,000
              
              
              
              -
              
              
              
              225,000
              
              
              
              900,000
              
              
              
              -
              
              
              
              1,125,000Segment
                  S, G, &A
              
              
              220,868
              
              
              
              183,580
              
              
              
              1,077,385
              
              
              
              -
              
              
              
              1,481,833
              
              
              
              646,735
              
              
              
              550,496
              
              
              
              3,062,606
              
              
              
              -
              
              
              
              4,259,837Subtotal
              
              
              154,132
              
              
              
              (103,125
              )
              
              
              (82,452
              )
              
              
              10,087
              
              
              
              (21,358
              )
              
              
              478,265
              
              
              
              (224,082
              )
              
              
              (193,280
              )
              
              
              10,087
              
              
              
              70,990Derivative
                  Gain (Loss)
              
              
              96,132
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              96,132
              
              
              
              166,067
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              166,067Depreciation
              
              
              (7,332
              )
              
              
              (2,960
              )
              
              
              (9,282
              )
              
              
              -
              
              
              
              (19,574
              )
              
              
              (21,638
              )
              
              
              (23,267
              )
              
              
              (27,619
              )
              
              
              -
              
              
              
              (72,524
              )Loss
                  in Disposed Assets
              
              
              -
              
              
              
              (87,607
              )
              
              
              -
              
              
              
              -
              
              
              
              (87,607
              )
              
              
              -
              
              
              
              (87,607
              )
              
              
              -
              
              
              
              -
              
              
              
              (87,607
              )Interest
              
              
              (13,135
              )
              
              
              -
              
              
              
              (259
              )
              
              
              -
              
              
              
              (13,394
              )
              
              
              (239,210
              )
              
              
              -
              
              
              
              (905
              )
              
              
              -
              
              
              
              (240,115
              )Net
                  Income (Loss)
              
              
              229,797
              
              
              
              (193,692
              )
              
              
              (91,993
              )
              
              
              10,087
              
              
              
              (45,801
              )
              
              
              383,484
              
              
              
              (334,956
              )
              
              
              (221,804
              )
              
              
              10,087
              
              
              
              (163,189
              )Intersegment
                  Adjustments
              
              
              (375,000
              )
              
              
              75,000
              
              
              
              300,000
              
              
              
              -
              
              
              
              -
              
              
              
              (1,125,000
              )
              
              
              225,000
              
              
              
              900,000
              
              
              
              -
              
              
              
              -0
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0$
              (145,203
              )
              
              $
              (118,692
              )
              
              $
              208,007
              
              
              $
              10,087
              
              
              $
              (45,801
              )
              
              $
              (741,516
              )
              
              $
              (109,956
              )
              
              $
              678,196
              
              
              $
              10,087
              
              
              $
              (163,189
              )


**Results
      of Operations and Financial Condition**





***Three
      Months Ended September 30, 2007 versus September 30,
      2006***





*Total
      Operating Revenues*





We generated
      $1,826,229 of total revenues for the three months ended September 30, 2007
      as
      compared to $1,645,247 for the three months ended September 30, 2006 resulting
      in an increase of 11%. The increase in year over year revenue is primarily
      related to a revenue increase of $208,829 or 50.7% at FTS Wireless and the
      inclusion of revenues related to our new Internet media business, Elysium
      Internet, Inc.





*Total
      Operating Costs and Expenses*





Total
      operating costs rose $415,985 or 27.0% to $1,954,769 for the three months ended
      September 30, 2007 compared to $1,538,784 for the three months ended September
      30, 2006. Included in total operating cost was a 39.6% increase in cost of
      goods
      sold from $530,754 during the three months ended September 30, 2006 to $740,754
      during the three months ended September 30, 2007. The primary reason for the
      increase in cost of goods sold was related to the increase in sales at our
      lower
      margin business FTS Wireless and a decrease in sales at our higher margin
      business at See World Satellites. The decrease in sales at See World Satellites
      in related to lower commissions received on satellite installations during
      the
      period. General and Administrative expenses increased $205,985 or 20.4% from
      $1,008,030 during the three months ended September 30, 2006 to $1,214,015 during
      the three months ended September 30, 2007. The increase in General and
      Administrative expenses primarily relates to increases in gas prices at See
      World satellite and increased legal and accounting expenses incurred as a
      result of  issues relating to our accounting for derivatives.





*Other
      Income (Expense)*





Included
      in other income is a decrease of $219,834 in income relating to changes in
      the
      fair value of derivative liabilities. Income from derivative liabilities
      decreased from $315,966 during the three months ended September 30, 2006 to
      $96,132 for the three months ended September 30, 2007.





*Net
      Income (Loss) from Continuing Operations*





We reported
      a net loss of $45,801 for the three months ended September 30, 2007 compared
      to
      net income of $347,601 for the three months ended September 30, 2006. The
      $301,800 decrease in net income is primarily related to the decrease in
      derivative liability income and the increase in legal, accounting and SEC filing
      expenses incurred during the period ended September 30, 2007.





***Nine
      Months Ended September 30, 2007 versus September 30,
      2006***





*Total
      Operating Revenues*





We generated
      $5,393,322 of total revenues for the nine months ended September 30, 2007 as
      compared to $4,912,254 for the nine months ended September 30 2006 resulting
      in
      an increase of 9.8%. The increase in year over year revenue is primarily related
      to a revenue increase of   $607,308 or 45.0% at FTS Wireless and
      the inclusion of revenues related to our new Internet media business, Elysium

      Internet, Inc.





*Total
      Operating Costs and Expenses*





Total
      operating costs rose $812,858 or 17.4% to $5,482,463 for the nine months ended
      September 30, 2007 compared to $4,669,605 for the nine months ended September
      30, 2006. Included in total operating cost was a 37.9% increase in cost of
      goods
      sold from $1,586,747 during the nine months ended September 30, 2006 to
      $2,187,495 during the nine months ended September 30, 2007. The primary reason
      for the increase in cost of goods sold was related to the increase in sales
      at
      our lower margin business FTS Wireless and a decrease in sales at our higher
      margin business at See World Satellites. The decrease in sales at See World
      Satellites in related to lower commissions received on satellite installations
      during the period ended September 30, 2007. General and Administrative expenses
      increased $212,110 or 6.9% from $3,082,858 during the nine months ended
      September 30, 2006 to $3,294,968 during the nine months ended September 30,
      2007. The increase in General and Administrative expenses is related to
      increases in gas prices at See World Satellites and increased legal, accounting
      and SEC filing expenses incurred during the period ended September 30,
      2007.





*Other
      Income (Expense)*





Included
      in other income is an increase of $502,976 in income relating to changes in
      the
      fair value of derivative liabilities. Income from derivative liabilities
      increased from an expense of $336,909 during the nine months ended
      September 30, 2006 to income of $166,067 for the nine months ended
      September 30, 2007. Interest expenses increased $55,695 from $184,420 for the
      nine months ended September 30, 2006 to $240,115 for the nine months ended
      September 30, 2007. The increase in interest expenses is related to increased
      financing related expenses incurred during the nine months ended September
      30,
      2007.





*Net
      Income (Loss) from Continuing Operations*





We reported
      a net loss of $163,189 for the nine months ended September 30, 2007 compared
      to
      a net loss of $278,680 for the nine months ended September 30, 2006. The
      $115,491 improvement in net income is primarily related to changes in the fair
      value calculations of derivative liabilities.








14








Table
      of
      Contents






**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 nine months ended September 30, 2007
      includes cash generated from operating activities and cash received from the
      issuance of common stock.




As
      of
      September 30, 2007, our Current Assets were $874,216, consisting of $25,030
      in
      cash, $365,305 in inventories, net, $34,956 of accounts receivables and $448,925
      of prepaid expenses and current assets. Current Liabilities were $4,457,126,
      consisting of $1,154,074 of convertible debentures, current portion, $2,567,817
      of notes payable to related parties and $735,235 in accounts payable and accrued
      expenses.




At
      September 30, 2007, we had total assets of $6,631,032, consisting of, in
      addition to the assets described above, Goodwill of $5,177,696, Property and
      equipment, net of accumulated depreciation of $157,642, unamortized discount
      of
      convertible debt of $168,485, Internet domain portfolio of $236,511 and Deposits
      of $16,482.




**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 unaudited, interim consolidated financial
      statements express substantial doubt about our ability to continue as a going
      concern.




**Financing
      Activities**




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




On
      February 13, 2007, We 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
      February 14, 2007, We 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
      March
      1, 2007, We 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, We 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, We 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.





On
      May 4,
      2007, We issued 230,303 restricted shares of common stock to an institutional
      investor relating to the conversion of $3,800 of debt at a price of $0.0165
      per
      share.





On
      June
      11, 2007, We issued 199,117 restricted shares of common stock to an
      institutional investor relating to the conversion of $3,800 of debt at a price
      of $0.01908 per share.





On
      June
      14, 2007, We issued 705,882 restricted shares of common stock to an
      institutional investor relating to the conversion of $14,399.99 of debt at
      a
      price of $0.02040 per share.





On
      June
      18, 2007, We issued 245,098 restricted shares of common stock to an
      institutional investor relating to the conversion of $5,000 of debt at a price
      of $0.02040 per share.





On
      July
      9, 2007, We issued 588,235 restricted shares of common stock to an
      institutional investor relating to the conversion of $11,000 of debt at a price
      of $0.01870 per share.




On
        July
        30, 2007, We issued 750,000 restricted shares of common stock to an
        investor relating to a $25,000 loan agreement.


On
      July
      30, 2007, We issued 208,905 restricted shares of common stock to an
      institutional investor relating to the conversion of $3,800 of debt at a price
      of $0.01819 per share.




On
      September 18, 2007, We issued 1,522,491 shares of common stock to an
      institutional investor relating to the conversion of $22,000 of debt at a price
      of $0.0145 per share.




**Subsidiaries**




As
      of
      September 30, 2007, we had three wholly-owned subsidiaries, FTS Wireless,
      Inc., See World Satellites, Inc. and Elysium Internet, 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.




**Changes
      in Internal Controls**





There
      was
      no change in our internal control over financial reporting that occurred during
      the third 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
      July
      30, 2007, we issued 750,000 restricted shares of common stock to an
      investor relating to a $25,000 loan agreement.




With
      respect to the sales of our securities described above, we relied on the
      Section 4(2) exemption from securities registration under the federal
      securities laws for transactions not involving any public offering. No
      advertising or general solicitation was employed in offering the securities.
      The
      securities were sold to accredited investors. The securities were offered for
      investment purposes only and not for the purpose of resale or distribution,
      and
      the transfer thereof was appropriately restricted by us.







15





Table
      of Contents




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




None.




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




None.




**ITEM
      5. OTHER INFORMATION.**




None.




**ITEM
      6. EXHIBITS.**




**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 reference).




4.2
      A
      Warrant Form (included as exhibit 4.1 to the Form 8-K filed March 24, 2005,
      and
      incorporated herein by reference).




4.3
      B
      Warrant Form (included as exhibit 4.2 to the Form 8-K filed March 24, 2005,
      and
      incorporated herein by reference).




4.4
      A
      Warrant Form (included as Exhibit 4.1 to the Form 8-K filed January 5, 2006,
      and
      incorporated herein by reference).




4.5
      B
      Warrant Form (included as Exhibit 4.2 to the Form 8-K filed January 5, 2006,
      and
      incorporated herein by reference).




4.6
      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
      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).




10.2
      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).




10.3
      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).




10.4
      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).




10.5
      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).




10.6
      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).




10.7
      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).




10.8
      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).




10.9
      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).




10.10
      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).




10.11
      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).




10.12
      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).




10.13
      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).




10.14
      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).




10.15
      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).




10.16
      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).




10.17
      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).




10.18
      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).




10.19
      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).




10.20
      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).





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**




In
      accordance with the requirements of the Exchange Act, the registrant 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 OfficerNovember
                19, 2007




16