UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

|X| ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934.


                   For the fiscal year ended December 31, 2007

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

          For the transition period from ____________ to _____________.

                        Commission File Number: 000-33327

                         NEXHORIZON COMMUNICATIONS, INC.
        (Exact name of small business issuer as specified in its chapter)

               Delaware                               13-4151225
---------------------------------------- --------------------------------------
    (State or other jurisdiction of      (IRS Employer Identification Number)

               9737 Wadsworth Parkway, Westminster, Colorado 80021
                    (Address of principal executive offices)

                                 (303) 404-9700
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:

      Class                           Name of each exchange on which registered
--------------------------------------------------------------------------------
Common Stock, $0.0001 Par Value                OTCBB: NXHZ

Securities registered under Section 12(g) of the Exchange Act:  None.

Check whether the issuer(1) 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 for the past 90 days. YES [X] NO[ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

<PAGE>

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

State issuer's revenues for its most recent fiscal year:  $343,812

As of the close of  trading on March 15,  2008,  there  were  23,550,113  common
shares  outstanding,  14,710,519  of  which  were  held by  non-affiliates.  The
aggregate market value of the common shares held by non-affiliates, based on the
average  closing  bid and  asked  prices on March 10,  2008,  was  approximately
$3,532,517.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one):    YES  [ ]   NO [X]

<PAGE>

<TABLE>
<CAPTION>


                         NEXHORIZON COMMUNICATIONS, INC.
                        2007 ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS

   ITEM         DESCRIPTION                                                           PAGE
---------
<S>             <C>                                                                   <C>

Part I.

Item 1.         Description of Business                                                    4

Item 2.         Description of Property                                                   14

Item 3.         Legal Proceedings                                                         15

Item 4.         Submission of Matters to a Vote of Security Holders                       15

Part II.

Item 5.         Market for Common Equity and Related Stockholder Matters                  15

Item 6.         Management's Discussion and Analysis or Plan of Operation                 18

Item 7.         Financial Statements                                                      21

Item 8.         Changes in and Disagreements With Accountants on Accounting and           21

Item 8a.        Controls and Procedures.                                                  21

Part III.

Item 9.         Directors, Executive Officers, Promoters and Control Persons and          24

Item 10.        Executive Compensation                                                    26

Item 11.        Security Ownership of Certain Beneficial Owners and Management and

Item 12.        Certain Relationships and Related Transactions, and Director

Part IV.

Item 13.        Index to Exhibits                                                         31

Item 14.        Principal Accountant Fees and Services                                    32
</TABLE>

<PAGE>

                           FORWARD-LOOKING STATEMENTS

    In addition to historical information,  some of the information presented in
this Annual Report on Form 10-KSB contains  "forward-looking  statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). Although Nexhorizon Communications,  Inc. ("Nexhorizon" or the "Company,"
which  may  also be  referred  to as  "we,"  "us" or  "our")  believes  that its
expectations  are  based on  reasonable  assumptions  within  the  bounds of its
knowledge of its business and operations,  there can be no assurance that actual
results will not differ materially from our expectations.  Such  forward-looking
statements  are  subject  to risks and  uncertainties  that could  cause  actual
results to differ materially from those  anticipated,  including but not limited
to,  our  ability  to  reach  satisfactorily  negotiated  settlements  with  our
outstanding   creditors  and  raise  debt  and/or  equity  to  fund   negotiated
settlements  with our  creditors  and to meet our  ongoing  operating  expenses.
Cautionary  statements  regarding  the risks,  uncertainties  and other  factors
associated with these forward-looking statements are discussed on page 18 below.
You are urged to carefully consider these factors,  as well as other information
contained in this Annual Report on Form 10-KSB and in our other periodic reports
and documents filed with the Securities and Exchange Commission ("SEC").

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

HISTORY OF NEXHORIZON COMMUNICATIONS, INC.
------------------------------------------

NexHorizon  Communications,  Inc.  was  incorporated  in Delaware on January 16,
2001.  Prior to January  29,  2007,  NexHorizon  Communications  was named Y-Tel
International,  LLC ("Y-Tel").  On January 29, 2007,  Y-Tel  International,  LLC
changed  its  name  to  NexHorizon  Communications,  Inc.  ("NexHorizon"  or the
"Company" hereafter).

Y-Tel was a telecommunications  carrier featuring wholesale and retail products,
and Wi-Fi  networks,  services and devices.  During the year ended  December 31,
2006, the Company primarily generated revenue through international  termination
of inbound/outbound wholesale voice and data minutes.

Restructuring Activities

During  2006,  the  Company   changed  its  business   objective  from  being  a
telecommunication  carrier to a new strategic objective that redefines the cable
television industry's approach to business in rural areas;  specifically systems
with  subscriber  bases in the range of 2,500 to 35,000  throughout  the  United
States.

On October 17, 2006, the Company  entered into a contract for the acquisition of
Sunrise  Television  Networks,  Inc.  ("STN") (and its  wholly-owned  subsidiary
NexHorizon of Colorado,  Inc.  (formerly Sunrise  Broadband of Colorado,  Inc.))
from Sunrise  Broadband  Group,  Inc. STN's audit was completed in June 2007 and
the Company closed the transaction effective June 22, 2007.

In  connection  with these  changes in its  business  plans,  in late 2006,  the
Company's  management  and board of directors was  restructured.  Messrs.  Steve
Lipman, Todd Wallace and Allen Tracey resigned from the Board of Directors.  Mr.
John Conroy resigned as the acting Chief  Executive  Officer and Chief Financial
Officer, but retained his seat on the Company's Board of Directors.  During this
same  period,  Messrs.  Calvin  Smiley,  Gregory  Liptak and  Daniel  Smith were
appointed to the  Company's  Board of Directors.  Messrs.  Smiley and Smith were
appointed the Company's  Chief Executive  Officer and Chief  Financial  Officer,
respectively.

<PAGE>

In January 2007, the Company changed its name to NexHorizon Communications, Inc.
and affected a reverse split of its issued and outstanding  stock on a 1 for 8.5
basis.

The  Company's  new  mission is to identify a series of  strategically  targeted
rural cable systems and networks.  The Company  intends to selectively  acquire,
upgrade and consolidate  the  capabilities of these systems such that the sum of
the whole will be greater than its parts.  Each acquired  system will expand its
basic cable TV services to include  Digital,  Video on Demand  ("VoD"),  Pay per
View,  High-speed  Internet,  and Telephone  through  either its existing  cable
network or WiFi ("Wireless Fidelity") last mile strategies.

In the first quarter of 2008,  the Company  executed a three-year  debenture for
approximately  $1,760,000.  The  debenture is repaid with  interest only for the
first six months with  principle  and  interest  payments  during the  remaining
months. Payments are made monthly at the higher of 11.5% or prime plus 4%.

A portion of the  debenture  proceeds was used to acquire two cable TV companies
located  in the San  Diego  metropolitan  area  ("Chula  Vista  Cable,  Ltd" and
"National  City Cable,  Inc.") on January 1, 2008.  The combined  entities serve
over  3,400  subscribers  representing  approximately  $1.6  million  in  annual
historical revenue. The combined entities were acquired for $5.0 million paid in
$750,000  of cash,  2.5  million  shares  of  Class A  Preferred  stock  with an
estimated  fair value of  $2,500,000  and $1.75  million in the form of a 3 year
balloon note bearing interest at 6%, paid quarterly.

SERVICES

The  Company   changed  its  business   plan  in  order  to  capitalize  on  the
opportunities  presented by the largely ignored rural cable television  markets.
The Company's management intends to identify a series of strategically  targeted
rural cable systems and networks. We propose to selectively acquire, upgrade and
consolidate the  capabilities of these systems with the goal that the sum of the
whole will be greater than its parts.

The Company's business  operations will be focused on the following elements and
revenue streams:

    1.   Analog  television and cable  services.  These services are traditional
         cable  offerings  providing   television   programming  to  households.
         Traditionally,  they provide  stable  annual  revenue and income and we
         believe will form the foundation of short-term operating results.

    2.   Digital  services.  These  services  are  various  value-added  digital
         offerings   meant  to  provide   subscribers   the  same  or  superior,
         state-of-the-art  services  favorably  compared to both digital ("DBS")
         services and digital  services in urban  areas.  The revenue and income
         streams related to these value-added digital services form a large part
         of the Company's projected growth and penetration within the subscriber
         base of our Company.

    3.   Data  services.  The  provision  of various  value-added  Internet  and
         High-speed  data  services is expected  to generate  large  revenue and
         income  growth.  The  projected  significant  growth  is  supported  by
         industry analysts and trends as cable operators can now offer a bundled
         package of Voice,  Data, and Video,  which  significantly  lowers churn
         rate, while increasing their revenue per subscriber.

In providing the above  services,  the Company intends to utilize an appropriate
combination  of wired and  wireless  technologies  to deliver  the  services  to
business and  residential  customers so as to increase  revenues,  improve gross
margins and generate higher cash flows.  The Company's  management  believes the
flexibility in network architecture and the use of a variety of state of the art
technologies, which were never readily available before, offered at a reasonable
cost will cause capital expenses to be lower than those normally  encountered in
typical cable and telecommunications broadband upgrades. The objectives of using
the most appropriate technology and offering the above noted services are:

<PAGE>

    1.    Develop the digital capability in all distribution sites at the lowest
          cost for the size of each head-end.

    2.    Develop  broadband  capability  for each  head-end  location that uses
          wireless and/or satellite Internet.

    3.    Develop  and  offer  digital  products  and   applications   that  are
          compatible with  compression,  encryption and security  identification
          (i.e.,  Video-On Demand (VOD), games,  digital video,  interactive TV,
          etc.).

    4.    Develop  applications-on-demand  (including video and e-commerce) that
          can be served from a distributed network architecture.

Rural Cable Market Opportunities

The cable industry is a large but very competitive  industry.  According to data
provided by Kagan Research LLC, cable service providers will generate  estimated
annual  revenues in the amount of $69.5 billion as of January 2008.  Cable is an
enormous industry fuelled by a growing  population base and a trend towards home
entertainment.

The United States rural cable market  currently is enormous and includes tens of
millions of  subscribing  households.  Overall,  the United  States  rural cable
market is comprised primarily of under-capitalized  individual system operators,
or  larger  national  entities  whose  focus  is  not  on  small,   rural  cable
subscribers.  This has  created  an  opportunity  for the  Company  to acquire a
significant number of small cable operators and their customers and to use these
acquisitions  to increase its subscriber  base,  revenues and cash flows through
the concurrent addition of additional digital, data and voice type services.

As part of an initiative to deploy  broadband  throughout  rural  markets,  many
smaller cable companies are now attempting to deploy network  upgrades that will
allow them to market a variety of innovative,  digital services. These companies
are examining the upgrade of network  infrastructures in order to provide voice,
data, and video on demand services.  NexHorizon management believes that through
technical  upgrades,  acquired  small cable  systems will  provide  services and
technical  capabilities  that will be  competitive  with those offered by larger
Multiple System Operators ("MSOs").

Competition

The  Company  competes  with other  cable  businesses,  conventional  television
broadcast services,  digital broadcast services,  DSL, and other  communications
and entertainment media,  including  newspapers,  motion picture theatres,  live
sporting events, interactive online computer services and home video products. A
number of cable companies are offering such services and could be competitive to
the Company.

Other cable  solution  providers  and cable  companies  that would be considered
competitive  to  NexHorizon  would  be:  Cox   Communications,   Inc.,  Adelphia
Communications   Corporation,    Cablevision   Systems   Corporation,    Charter
Communications Inc., Insight  Communications,  Inc. and Mediacom  Communications
Corporation, among others.

Regulation

The cable  television  industry is subject to regulation on the federal,  state,
and local  levels.  In  addition,  many  aspects of such  regulation  remain the
subject of judicial proceedings and administrative or legislative proposals. The
Cable Television Consumer Protection and Competition Act of 1992, referred to as
the "1992  Cable  Act,"  significantly  expanded  the scope of cable  television
regulation.  Of particular  significance  are the "franchise  agreements"  which
govern cable service providers in the jurisdictions in which they operate.

<PAGE>

The Company intends to target those potential acquisitions,  which operate under
non-exclusive  franchise agreements granted by local authorities and are subject
to periodic renewal and renegotiation.  The franchise agreements include permits
and similar authorizations issued at the local and state level.

Franchise   agreements  are  usually  not  transferable,   unless  the  granting
governmental authority consents. Further, they are subject to termination in the
event of a material  breach in the  agreement.  Most franchise  agreements  will
require the Company to pay a franchise fee of up to 5.0% of gross revenues.

The  Communications  Act provides for an orderly franchise  renewal process,  in
which granting authorities may not unreasonably  withhold renewals. In the event
that a renewal is not  allowed,  the  granting  authority  must pay the existing
cable company the "fair market value" of the system.  Some  authorities  require
the cable operator to make certain commitments during the renewal process,  such
as requiring technological upgrades to the system, which may require substantial
capital expenditures.

RISK FACTORS
------------

WE HAVE A LIMITED OPERATING HISTORY AND MAY NEVER ACHIEVE OR SUSTAIN  PROFITABLE
OPERATIONS.

We have  recently  restructured  and have limited  operating  history in the new
structure.  Our prospects  are subject to the  substantial  risks,  expenses and
difficulties frequently encountered in the establishment and growth of the rural
cable TV  business  in  particular  and in the  telecommunications  industry  in
general,  which is characterized by a significant  number of market entrants and
intense competition, as well as the various risk factors described herein.

IT IS  POSSIBLE  THAT OUR  OPERATING  LOSSES MAY  INCREASE IN THE FUTURE AND THE
COMPANY MAY NEVER ACHIEVE OR SUSTAIN PROFITABILITY.

We  anticipate  that  we  will  continue  to  incur  operating  losses  for  the
foreseeable  future  due  to a high  level  of  planned  operating  and  capital
expenditures in research and  development,  increase sales and marketing  costs,
additional  personnel  hires,  greater  levels of  product  development  and our
general growth  objectives  related to our proposed new products which we intend
to develop.

OUR  INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING FIRM HAS ISSUED A GOING CONCERN
OPINION AND IF WE DO NOT  GENERATE  ENOUGH CASH FROM  OPERATIONS  TO SUSTAIN OUR
BUSINESS, WE MAY HAVE TO LIQUIDATE ASSETS OR CURTAIL OUR OPERATIONS.

The accompanying  consolidated  financial statements have been prepared assuming
we will continue as a going concern.  Conditions  exist which raise  substantial
doubt about our ability to continue our business  unless we are able to generate
sufficient cash flows to meet our  obligations  and sustain our  operations.  In
addition,  we have limited working  capital.  We cannot assure or guarantee that
additional  capital  and/or debt  financing  will be  available  when and to the
extent  required  or  that  if  available,  it will  be on  terms  favorable  or
acceptable by us. Our financial  statements do not include any  adjustment  that
might result from the outcome of this  uncertainty.  This may be an indicator of
our inability to continue in business which could cause loss of investment.

OUR CURRENT LIABILITIES EXCEED OUR CURRENT ASSETS BY A SIGNIFICANT AMOUNT, WHICH
COULD PUT SHAREHOLDERS/INVESTORS AT SERIOUS RISK OF LOSS OF THEIR INVESTMENT.

We have current  liabilities  totaling $2,493,009 and $123,992 in current assets
as of December 31, 2007. We have a working  capital  deficit of $2,369,017 as of
December 31, 2007. These  liabilities  include accounts payable of approximately
$1,758,003 as of December 31, 2007. In the event that creditors or litigants, if

<PAGE>

any,  were to  attempt  to  collect  by levy  and  attachment  or by  filing  an
involuntary  bankruptcy  petition,  it is likely  that  shareholders,  as equity
holders,  would receive little,  if any return of investment,  because creditors
would be paid first.

WE  WILL  NEED  SIGNIFICANT  ADDITIONAL  FUNDS  FOR  OPERATIONS  AND  MARKETING/
DEVELOPMENT, WHICH WE MAY NOT BE ABLE TO OBTAIN.

The  expansion  and  development  of  our  business  will  require   significant
additional  capital. We intend to seek substantial  additional  financing in the
future to fund the  growth of  operations,  including  funding  the  significant
capital expenditures necessary to provide service in targeted markets. We may be
unable to obtain any future equity or debt  financing on acceptable  terms or at
all. A market downturn or general market  uncertainty  will adversely affect our
ability to secure  additional  financing.  If we are unable to obtain additional
capital or are required to obtain it on terms less satisfactory, we will need to
delay  deployment  of new products or take other  actions  that could  adversely
affect business, prospects,  operating results and financial condition. To date,
our cash  flow from  operations  has been  insufficient  to cover  expenses  and
capital needs.  Our current  capital  resources have been expended and our needs
for  additional  capital  to  continue  expansion,  which  we may not be able to
obtain, and which failure to obtain could impair or curtail operations.

WE May Face Increased Competition Because of Technological Advances, Which Could
Adversely Affect Future Results of Operations.

The market for  telecommunications  in general, and rural cable TV services such
as those that we sell, is intensely  competitive.  Upon completion of the Merger
and the  acquisition  of  Cable  TV  Systems,  we  will  compete  directly  with
high-powered  direct-to-home ("DTH") satellites providers, and compete generally
with  ISP's  and  the  local  telephone  company.  Competitive  factors  in  the
telecommunications  industry  and the  rural  cable TV  segment  include  signal
quality, service support, brand awareness,  price, advertising and promotion and
variety of services offered.

The loss of key personnel could have a material adverse effect on OUR business.

If  any of  our  key  personnel  ceases  to  participate  in  our  business  and
operations,  our  profitability  could  suffer.  Our  success  is  substantially
dependent  upon the  retention  of, and the  continued  performance  by, our key
personnel,  including  Calvin D. Smiley,  Sr., the Chairman and Chief  Executive
Officer of the Company.

WE may  not be  able to  obtain  critical  items  at a  reasonable  cost or when
required, which could adversely affect business, financial condition and results
of operations.

We depend on third-party suppliers for equipment,  software,  services and other
items that are critical for the operation of our cable systems and the provision
of advanced services,  including digital set-top converter boxes,  digital video
recorders and routers,  fiber-optic cable,  telephone  circuits,  software,  the
"backbone"  telecommunications  network  for our  high-speed  data  service  and
construction  services  for  expansion  and  upgrades of our cable  systems.  In
certain  cases,  these items are available  from a limited  number of suppliers.
Demand  for these  items has  increased  with the  general  growth in demand for
Internet and telecommunications  services. We do not typically carry significant
inventories of equipment.  Moreover,  if there are no suppliers that are able to
provide  set-top   converter  boxes  that  comply  with  evolving  internet  and
telecommunications  standards or that are  compatible  with other  equipment and
software that we use,  business,  financial  condition and results of operations
could be  materially  adversely  affected.  If we are unable to obtain  critical
equipment,  software,  communications or other services on a timely basis and at
an acceptable  cost, our ability to offer our products and services and roll out
advanced services may be impaired, and business, financial condition and results
of operations could be materially adversely affected.

<PAGE>

ACTIONS  BY  POLE  OWNERS  MIGHT  SUBJECT  US TO  SIGNIFICANTLY  INCREASED  POLE
ATTACHMENT COSTS.

Our cable facilities are often attached to or use public utility poles, ducts or
conduits.  Historically,  cable system  attachments to public utility poles have
been regulated at the federal or state level. Generally this regulation resulted
in favorable pole attachment rates for cable  operators.  The FCC clarified that
the provision of Internet access does not endanger a cable operator's  favorable
pole rates;  this  approach  ultimately  was upheld by the Supreme  Court of the
United  States.  That ruling,  coupled with the recent  Supreme  Court  decision
upholding  the FCC's  classification  of cable modem  service as an  information
service,  should  strengthen  our  ability to resist such rate  increases  based
solely on the delivery of cable modem  services  over our cable  systems.  As we
continue our deployment of cable telephony and certain other advanced  services,
utilities  may continue to invoke higher  rates.  A formal  hearing is currently
before the FCC in which Alabama Power is  attempting  to  demonstrate  that pole
attachment  rates  above its  marginal  costs  meet the just  compensation  test
approved by the United  States Court of Appeals for the 11th Circuit which would
allow it to ask for and receive  rates from cable  operators  over and above the
rates set by FCC  regulation.  If  successful,  Alabama  Power and  perhaps  all
utilities  in areas  served by us may have a similar  claim  thereby  increasing
their ability to raise rates.

Our  business,  financial  condition  and results of  operations  could suffer a
material adverse impact from any significant increased costs, and such increased
pole attachment costs could  discourage  system upgrades and the introduction of
new products and services.

CHANGES IN COMPULSORY  COPYRIGHT  REGULATIONS MIGHT  SIGNIFICANTLY  INCREASE OUR
LICENSE FEES.

Filed petitions for rulemaking with the United States  Copyright  Office propose
revisions to certain  compulsory  copyright license  reporting  requirements and
seek  clarification  of  certain  issues  relating  to  the  application  of the
compulsory license to the carriage of digital broadcast stations.  The petitions
seek, among other things:  (i)  clarification of the inclusion in gross revenues
of digital  converter fees,  additional set fees for digital service and revenue
from required "buy throughs" to obtain digital service;  (ii) reporting of "dual
carriage" and multicast signals; (iii) revisions to the Copyright Office's rules
and Statement of Account forms,  including  increased detail regarding services,
rates and subscribers,  additional information regarding  non-broadcast tiers of
service, cable head end location information, community definition clarification
and identification of the county in which the cable community is located and the
effect of interest  payments on potential  liability  for late filing;  and (iv)
payment  for certain  distant  signals in  communicates  where the signal is not
carried,  dubbed  "phantom  signals." The Copyright  Office may open one or more
rulemakings in response to these petitions. We cannot predict the outcome of any
such rulemakings;  however,  it is possible that certain changes in the rules or
copyright  compulsory  license fee computations  could have an adverse affect on
our business,  financial  condition and results of operations by increasing  our
copyright  compulsory  license fee costs or by causing  management  to reduce or
discontinue  carriage of certain broadcast signals that are currently carried on
a discretionary basis.

WE ARE SUBJECT TO REGULATION BY FEDERAL, STATE AND LOCAL GOVERNMENTS.

The  federal,  state  and  local  governments  extensively  regulate  the  cable
communications industry. We expect that court actions and regulatory proceedings
will  refine the rights  and  obligations  of  various  parties,  including  the
government,  under the  Communications  Act of 1934, as amended.  In addition to
regulations  already in place, the results of these judicial and  administrative
proceedings may materially  affect our business  operations.  Local  authorities
grant us franchises that permit us to operate our cable systems. We will have to
renew or  renegotiate  these  franchises  from time to time.  Local  franchising
authorities  often demand  concessions  or other  commitments  as a condition to

<PAGE>

renew or transfer,  which  concessions  or other  commitments  could  materially
adversely impact our financial condition and result of operations.  We will also
be regulated by the Federal Communications Commission ("FCC"), or FCC, and state
public utilities  commissions or PUC.  Telecommunications  companies,  including
ours  that have the  ability  to offer  telephone  services  over the  Internet,
generally  are  subject  to  significant   regulation.   This  regulation  could
materially adversely affect business operations.

In  addition,  over the past several  years,  a number of  companies,  including
telephone companies and Internet Service Providers  ("ISPs"),  have asked local,
state and  federal  governmental  authorities  to mandate  that cable  companies
provide capacity on their broadband  infrastructure so that these and others may
deliver  high  speed  cable  Internet  directly  to  customers  over  the  cable
infrastructure.  Some cable  operators  have  initiated  litigation  challenging
municipal efforts to unilaterally impose so called  `open-access'  requirements.
To date, the court  decisions have been  inconsistent  on this issue. If the FCC
rules to provide "open access",  such requirements  could have a negative impact
on our business.

WE MUST COMPLY WITH  ENVIRONMENTAL  REGULATIONS  OR WE MAY HAVE TO PAY EXPENSIVE
PENALTIES OR CLEAN UP COSTS.

We are  subject to  federal,  state,  local and foreign  laws,  and  regulations
regarding  protection of the  environment,  including air, water,  and soil. Our
business involves the use, handling,  storage,  and contracting for recycling or
disposal of, hazardous or toxic substances or wastes, including  environmentally
sensitive materials,  such as solvents,  lubricants,  degreasing agents, plastic
and resin.  We must comply with certain  requirements  for the use,  management,
handling,  and disposal of these  materials.  We do not maintain  insurance  for
pollutant  cleanup and removal.  If we are found  responsible  for any hazardous
contamination, we may have to pay expensive fines or penalties or perform costly
clean-up.  Even if we are  charged,  and later found not  responsible,  for such
contamination or clean up, the cost of defending the charges could be high.

IF WE DO NOT COMPLY WITH  GOVERNMENT  REGULATIONS,  WE MAY BE UNABLE TO SHIP OUR
PRODUCTS OR HAVE TO PAY EXPENSIVE FINES OR PENALTIES.

We are  subject  to  regulation  by  county,  state,  and  federal  governments,
governmental   agencies,  and  regulatory  authorities  from  several  different
countries.  If we fail to  obtain  regulatory  approvals  or  suffer  delays  in
obtaining  regulatory  approvals,  we may not be able to market our products and
services, and generate revenues. Further, we may not be able to obtain necessary
regulatory  approvals.  Although we do not anticipate problems satisfying any of
the regulations  involved, we cannot foresee the possibility of new regulations,
which could adversely  affect our business.  Further our products are subject to
export limitations and we may be prevented from shipping our products to certain
nations or buyers.

THERE ARE LIMITED  TRADING  MARKETS FOR OUR COMMON  STOCK,  THEREBY  LIMITING AN
INVESTOR'S OPPORTUNITY TO SELL SUCH COMMON STOCK.

Currently only a very limited  trading  market exists for our common stock.  The
common stock trades on the  Over-The-Counter  Bulletin Board ("OTCBB") under the
symbol  "NXHZ."  The  OTCBB is a  limited  market  and  subject  to  substantial
restrictions   and   limitations  in  comparison  to  the  NASDAQ  system.   Any
broker/dealer  that  makes a market  in our stock or other  person  that buys or
sells our stock could have a significant  influence  over its price at any given
time. We cannot assure its shareholders  that a market for our common stock will
be sustained.  There is no assurance that our common stock will have any greater
liquidity than shares that do not trade on a public  market.  An investor may be
required to retain its investment for an indefinite  period of time, and may not
be able to  liquidate  the  investment  in the event of an  emergency or for any
other reasons.

REGULATION OF PENNY STOCKS

Our  securities  are subject to a SEC rule that imposes  special sales  practice
requirements upon  broker-dealers who sell such securities to persons other than
established  customers or accredited  investors.  For purposes of the rule,  the
phrase "accredited investors" means, in general terms,  institutions with assets

<PAGE>

in  excess  of  $5,000,000,  or  individuals  having a net  worth in  excess  of
$1,000,000  or having an annual  income that  exceeds  $200,000  (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker-dealer  must make a special  suitability  determination for
the purchaser and receive the purchaser's  written  agreement to the transaction
prior  to  the  sale.   Consequently,   the  rule  may  affect  the  ability  of
broker-dealers  to sell our  securities  and  also may  affect  the  ability  of
purchasers  in this  offering to sell their  securities in any market that might
develop therefore.

In addition,  the SEC has adopted a number of rules to regulate  "penny stocks."
Such rules include Rules 3a51-1,  15g-1,  15g-2,  15g-3,  15g-4,  15g-5,  15g-6,
15g-7,  and 15g-9 under the  Securities  Exchange Act of 1934,  as amended ("the
Exchange Act").  Because our securities may constitute "penny stocks" within the
meaning of the rules,  the rules  would apply to us and to its  securities.  The
rules may further  affect the ability of owners of shares to sell our securities
in any market that might develop for them.

Shareholders  should be aware that,  according  to the SEC, the market for penny
stocks has  suffered  in recent  years from  patterns  of fraud and abuse.  Such
patterns  include  (i)  control of the market for the  security  by one or a few
broker-dealers   that  are  often  related  to  the  promoter  or  issuer;  (ii)
manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  (iii) "boiler room"  practices  involving
high-pressure  sales tactics and unrealistic  price projections by inexperienced
sales persons;  (iv) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers;  and (v) the wholesale dumping of the same securities
by promoters and broker-dealers  after prices have been manipulated to a desired
level,  along with the  resulting  inevitable  collapse of those prices and with
consequent  investor  losses.  Our  management  is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the  behavior  of the market or of  broker-dealers  who
participate  in the  market,  management  will  strive  within the  confines  of
practical  limitations to prevent the described  patterns from being established
with respect to our securities.

WE WILL NOT PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

We have never declared or paid cash dividends and management does not expect the
Company to be in a position to pay cash  dividends  in the  foreseeable  future.
Management  believes  any future  earnings  will be retained to finance  ongoing
operations and the expansion of the business.

Existing Stockholders and Management Will Control the Company.

The existing stockholders of the Company and Cable Systems, including members of
our management  team, and in particular  Calvin D. Smiley,  Sr., Daniel M. Smith
and John T. Conroy are expected to control a significant  majority of NexHorizon
Common Stock. As a result, the Company's management will be able to elect all or
many of the Company's directors and otherwise control,  through their collective
stock  ownership,  the business  policies and  operations of the Company and the
amount of compensation the officers of the Company will receive.

INVESTORS will Experience Substantial and Immediate Dilution.

The  Company  has granted  and may  continue  to grant  warrants  and options to
purchase  its  Common  Stock in  conjunction  with the sale of  securities,  the
acquisition  of other  businesses  or assets,  and the hiring of  employees  and
consultants.  Under the normal  terms of options to acquire  Common  Stock,  the
holders  thereof  are given an  opportunity  to profit from a rise in the market
price of the Common  Stock with a  resulting  dilution in the  interests  of the
other  shareholders.  In  addition,  the terms on which the  Company  may obtain
additional  financing may be adversely affected by the existence of options. The
holders of options may exercise them at a time when the Company might be able to
obtain  additional  capital  through a new offering of  securities on terms more
favorable than those provided by the options.

<PAGE>


OUR FAILURE TO MANAGE GROWTH EFFECTIVELY COULD IMPAIR OUR BUSINESS.
-------------------------------------------------------------------

We believe that our acquisitions will open new cross-marketing  opportunities in
each company's  respective customer base. This expansion of business could place
a  significant  strain  on  our  management,   financial  resources,  and  other
resources. There can be no assurance that such expansion will occur.

We intend to continue to grow by  increasing  our sales  efforts and  completing
strategic  acquisitions.  To effectively manage our growth, we must, among other
things:


        o      engage,  train and  manage a larger  sales  force and  additional
               service personnel;
        o      expand the geographic coverage of our sales force;
        o      expand our information systems;
        o      identify and successfully  integrate acquired businesses into our
               operations; and
        o      administer   appropriate  financial  and  administrative  control
               procedures.


Our anticipated growth will likely place a significant strain on our management,
financial,  operational,  technical,  sales and  administrative  resources.  Our
ability  to manage  future  growth,  if it  occurs,  will also  depend  upon the
capacity, reliability and security of our network infrastructure. Any failure to
effectively  manage  our  growth or to  promptly  address  and  respond to these
circumstances may cause our business to suffer and our stock price to decline.

CHARGES TO  EARNINGS  RESULTING  FROM PAST OR FUTURE  ACQUISITIONS  OR  INTERNAL
--------------------------------------------------------------------------------
REORGANIZATIONS MAY ADVERSELY AFFECT OUR OPERATING RESULTS.
-----------------------------------------------------------

Under current  purchase  accounting,  we allocate the total purchase price to an
acquired  company's  net  tangible  assets,  amortizable  intangible  assets and
in-process research and development based on their fair values as of the date of
the  acquisition  and record the  excess of the  purchase  price over those fair
values  as  goodwill.  Management's  estimates  of fair  value  are  based  upon
assumptions believed to be reasonable but which are inherently  uncertain.  As a
result,  any of the following or other factors could result in material  charges
that would adversely affect our results:


        o      Loss on impairment of goodwill and/or other intangible assets;
        o      Changes in the useful lives or the  amortization  of identifiable
               intangible assets;
        o      Accrual of newly identified pre-merger contingent liabilities, in
               which case the related  charges  could be required to be included
               in earnings in the period in which the accrual is  determined  to
               the extent it is identified subsequent to the finalization of the
               purchase price allocation; and
        o      Charges to income to reduce our cost structure.

In addition,  fluctuations in the price of our common stock may expose us to the
risk of securities class action lawsuits.  Defending against such lawsuits could
result in  substantial  costs and divert  management's  attention and resources.
Furthermore,  any  settlement or adverse  determination  of these lawsuits could
subject us to significant liabilities.


<PAGE>


IF WE FAIL TO ESTABLISH OR MAINTAIN  EFFECTIVE  INTERNAL CONTROLS OVER FINANCIAL
--------------------------------------------------------------------------------
REPORTING, THE PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED.
-------------------------------------------------------------------

We have  determined  that our internal  controls over  financial  reporting have
material weaknesses and conditions that need to be addressed,  the disclosure of
which  may have an  adverse  impact  on the price of our  common  stock.  We are
required to establish and maintain  appropriate internal controls over financial
reporting. Failure to establish those controls, or any failure of those controls
once established,  could adversely impact our public  disclosures  regarding our
business,  financial condition or results of operations. In addition, our future
assessments  of  internal   controls  over  financial   reporting  may  identify
additional  weaknesses and conditions  that need to be addressed in our internal
controls over  financial  reporting or other matters that may raise concerns for
investors.  Any actual or perceived  weaknesses and  conditions  that need to be
addressed  in our internal  control  over  financial  reporting,  disclosure  of
management's  assessment of our internal  controls over  financial  reporting or
disclosure of our independent registered public accounting firm's attestation to
or report on  management's  assessment of our internal  controls over  financial
reporting may have an adverse impact on the price of our common stock.

STANDARDS FOR COMPLIANCE WITH SECTION 404 OF THE  SARBANES-OXLEY ACT OF 2002 ARE
--------------------------------------------------------------------------------
UNCERTAIN,  AND IF WE FAIL TO COMPLY IN A TIMELY  MANNER,  OUR BUSINESS COULD BE
--------------------------------------------------------------------------------
HARMED AND OUR STOCK PRICE COULD DECLINE.
-----------------------------------------

Rules  adopted by the SEC pursuant to Section 404 of the  Sarbanes-Oxley  Act of
2002  require  annual   assessment  of  our  internal  controls  over  financial
reporting,  and  attestation  of our  assessment by our  independent  registered
public accounting firm.  Currently,  we believe these two requirements  apply to
our annual  reports for fiscal 2007 and 2009,  respectively.  The standards that
must be met for  management  to assess  the  internal  controls  over  financial
reporting  as  effective  are  evolving  and  complex,  and require  significant
documentation, testing, and possible remediation to meet the detailed standards.
We expect to incur  significant  expenses and to devote resources to Section 404
compliance during the remainder of 2008 and on an ongoing basis. It is difficult
for us to  predict  how long it will  take to  complete  the  assessment  of the
effectiveness of our internal control over financial reporting for each year and
to remediate any deficiencies in our internal control over financial  reporting.
As a result,  we may not be able to  complete  the  assessment  and  remediation
process  on a  timely  basis.  In  addition,  the  attestation  process  by  our
independent  registered  public  accounting  firm  is new  and we may  encounter
problems  or  delays  in  completing   the   implementation   of  any  requested
improvements  and receiving an attestation of our assessment by our  independent
registered  public  accounting  firm.  In the  event  that our  Chief  Executive
Officer,  Chief Financial  Officer or independent  registered  public accounting
firm  determine  that our  internal  control  over  financial  reporting  is not
effective as defined under Section 404, we cannot  predict how  regulators  will
react or how the  market  prices of our shares  will be  affected;  however,  we
believe  that there is a risk that  investor  confidence  and share value may be
negatively impacted.

WE CANNOT BE CERTAIN THAT OUR INTERNAL CONTROL OVER FINANCIAL  REPORTING WILL BE
--------------------------------------------------------------------------------
EFFECTIVE OR SUFFICIENT IN THE FUTURE.
--------------------------------------

Our  ability  to manage  our  operations  and  growth  requires  us to  maintain
effective  operations,  compliance  and  management  controls,  as  well  as our
internal  control  over  financial  reporting.  We may not be able to  implement
necessary  improvements to our internal  control over financial  reporting in an
efficient  and timely  manner and may discover  deficiencies  and  weaknesses in
existing  systems and  controls,  especially  when such systems and controls are
tested by increased rate of growth or the impact of  acquisitions.  In addition,
upgrades or  enhancements to our computer  systems could cause internal  control
weaknesses.

It may be  difficult to design and  implement  effective  internal  control over
financial reporting for combined operations as we integrate acquired businesses.
In addition,  differences in existing controls of acquired businesses may result

<PAGE>

in weaknesses  that require  remediation  when internal  controls over financial
reporting are combined. The integration of two compliant systems could result in
a noncompliant  system or an acquired company may not have compliant systems. In
either case, the effectiveness of our internal control may be impaired.

If we fail to achieve and maintain an effective system of internal controls,  we
may be unable to produce reliable  financial reports or prevent fraud. If we are
routinely unable to assert that our internal control over financial reporting is
effective,  or if our independent  registered public accounting firm is required
to attest to the effectiveness of our internal controls but is unable to deliver
a report at all or can deliver only a qualified  report,  we could be subject to
regulatory  enforcement  and may lose  investor  confidence  in our  ability  to
operate in compliance  with  existing  internal  control rules and  regulations,
either of which could result in a decline in our stock price.

OUR SIGNIFICANT INDEBTEDNESS MAY ADVERSELY AFFECT OUR OPERATING RESULTS.
------------------------------------------------------------------------

Our significant debt could adversely affect our financial  resources and prevent
us from satisfying our debt service obligations. We have a significant amount of
indebtedness and are very likely to incur additional indebtedness in the future.
In the future, we may not generate sufficient cash flow from operations, or have
future borrowings available to us, sufficient to pay our debt.

In order to finance the acquisition  consideration for future  acquisitions,  we
may incur additional significant indebtedness. This additional indebtedness may,
among other things, require us to:

        o      Maintain a specific ratio of net debt to  consolidated  operating
               income or other measurements;
        o      Dedicate a significant  portion of our cash flow from  operations
               to payments on this debt,  thereby  reducing the  availability of
               cash  flow  to  fund  capital   expenditures,   to  pursue  other
               acquisitions or investments in new  technologies  and for general
               corporate purposes;
        o      Increase   our   vulnerability   to  general   adverse   economic
               conditions; and
        o      Limit our flexibility in planning for, or reacting to, changes in
               or challenges relating to its business and industry.

In addition,  the terms of the financing  obligations may contain  restrictions,
including limitations on our ability to:

        o    Incur additional indebtedness;
        o    Create or incur liens;
        o    Dispose of assets;
        o    Consolidate or merge with or acquire another entity;
        o    Pay  dividends,  redeem  shares of capital  stock or effect stock
             repurchases; and
        o    Make loans and investments.

The  requirements  and  limitations  that could be  associated  with  additional
indebtedness have the potential to increase our vulnerability to general adverse
economic conditions,  and limit our ability to respond to changes and challenges
in our  business.  In addition,  a failure to comply with any such  restrictions
could result in a default under these financing  obligations or could require us
to  obtain   waivers   from  our  lenders  for  failure  to  comply  with  these
restrictions.  The  occurrence  of a default  that we are  unable to cure or the
inability to secure a necessary  consent or waiver could have a material adverse
effect on our business, financial condition or results of operations.

Employees

The Company has seven  full-time  employees.  The  Company's  employees  are not
represented  by a labor union or subject to a collective  bargaining  agreement.
The Company believes its relations with its employees are satisfactory.

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY.

Corporate Headquarters

As of December 31, 2007, the Company leases  facilities  located in Westminster,
Colorado.  The lease  relates to office  space at the monthly rate of $2,250 per
month.  The lease  expires in February  2008.  The Company has renewed its lease
with additional space for a two year period at the monthly rate of $2,500.

Other Facilities

As of December 31, 2007,  the Company  leases  facilities for its telecom hub in
Dallas,  Texas.  The lease  relates  to  cabinet  space for  housing  Voice over
Internet  Protocol  (VoIP")  equipment at a rate of $400 per month. The lease is
currently on a month to month basis.

The Company  also leases  space for its 13 head ends  located in  Colorado.  The
lease space holds the Company's cable TV and high speed internet  equipment at a
monthly  rate ranging  from $25 - $350.  The leases are  currently on a month to
month basis.

ITEM 3.  LEGAL PROCEEDINGS.

While the Company is not formally engaged in any litigation,  legal  proceedings
or claims, it is involved in resolving the following issues:

     - The  Company  has  agreed  to a  settlement  offer of  $10,000  per month
     totaling  $70,000 for hardware  furnished by Digicomm  International,  Inc.
     Such amount is included in accrued expenses at December 31, 2007.

     - The Company is currently in negotiations  regarding  final  settlement of
     termination  cost from an acquisition  agreement.  The Company has included
     approximately  $65,000 in accrued expenses at December 31, 2007 and 2006 in
     the accompanying consolidated balance sheet related to these claims.

     - The Company has agreed to a  settlement  offer of $15,000  related to the
     Company's  failure to complete an  acquisition.  Such amount is included in
     accrued expenses at December 31, 2006 and 2007.

     - The Company is in negotiations  with the former Chief  Executive  Officer
     regarding  final  settlement  of unpaid  wages and claims.  The Company has
     included approximately $50,000 in accrued expenses at December 31, 2006 and
     2007.

     - The Company is in  negotiations  with previous  legal  counsel  regarding
     unpaid fees totaling  $35,500.  Such amount is included in accounts payable
     at December 31, 2006 and 2007.

     - The Company is in negotiations with NAP of America regarding unpaid lease
     expenses  totaling  $5,778.  Such amount is included in accounts payable at
     December 31, 2006 and 2007.


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

None.

<PAGE>



                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Common Stock is presently traded on the  over-the-counter  market on the OTC
Bulletin Board maintained by the Financial  Industry  Regulatory  Authority (the
"FINRA"). The NASDAQ symbol for the Common Stock is "NXHZ". Prior to February 1,
2007, the Company's NASDAQ symbol for the common stock was "YTLI." The following
table sets forth the range of high and low bid  quotations  for the Common Stock
of each full  quarterly  period during the fiscal year or equivalent  period for
the  fiscal  periods   indicated   below.  The  quotations  were  obtained  from
information  published  by the FINRA and  reflect  interdealer  prices,  without
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.


                2006                        HIGH              LOW
                ----                        ----              ---
March 31, 2006                              $2.47             $2.21
June 30, 2006                                0.51              0.51
September 30, 2006                           0.60              0.61
December 31, 2006                            0.43              0.34

                2007                        HIGH              LOW
                ----                        ----              ---
March 31, 2007                              $0.20             $0.20
June 30, 2007                                0.18              0.15
September 30, 2007                           0.24              0.24
December 31, 2007                            0.16              0.16



On May 22,  2006,  the  Company  was  de-listed  due to its  failure to file all
required SEC reports. The Company was re-listed on June 7, 2006.

At December 31, 2007,  there were 469 holders of record of the Company's  common
stock. A significant  number of the shares are held in street name and, as such,
the  Company   believes  that  the  actual   number  of  beneficial   owners  is
significantly higher.

Dividends

The Company has not established a policy concerning payment of regular dividends
nor has it paid any  dividends  on its  common  stock to date.  Any  payment  of
dividends in the future will be determined by the Board of Directors in light of
conditions  then  existing,  including  restrictions  imposed  by the  Company's
preferred stock then outstanding,  the Company's earnings,  financial condition,
capital  requirements  and  debt  covenants,  if  any,  and  the  tax  treatment
consequences of paying dividends.

Effective  August 11, 1993, the SEC adopted Rule 15g-9,  which  established  the
definition  of a "penny  stock," for purposes  relevant to the  Company,  as any
equity  security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.  For
any transaction  involving a penny stock, unless exempt, the rules require:  (i)
that a broker or dealer  approve a person's  account for  transactions  in penny
stocks;  and (ii) that the broker or dealer  receive from the investor a written
agreement  to the  transaction,  setting  forth the identity and quantity of the
penny  stock to be  purchased.  In order  to  approve  a  person's  account  for
transactions  in penny  stocks,  the broker or dealer must (i) obtain  financial
information  and investment  experience  and objectives of the person;  and (ii)
make a  reasonable  determination  that the  transactions  in penny  stocks  are
suitable for that person and that person has sufficient knowledge and experience
in financial  matters to be capable of evaluating the risks of  transactions  in
penny stocks.  The broker or dealer must also deliver,  prior to any transaction
in a penny stock, a disclosure  schedule prepared by the Commission  relating to
the penny stock market,  which,  in highlight  form, (i) sets forth the basis on
which the broker or dealer made the suitability  determination;  and (ii) states

<PAGE>

that the broker or dealer received a signed, written agreement from the investor
prior to the  transaction.  Disclosure  also has to be made  about  the risks of
investing in penny stock in both public offerings and in secondary trading,  and
about  commissions   payable  to  both  the  broker-dealer  and  the  registered
representative,  current  quotations  for  the  securities  and the  rights  and
remedies available to an investor in cases of fraud in penny stock transactions.
Finally,  monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stocks.



UNREGISTERED SALES OF EQUITY

The Company made the following unregistered sales of its securities from January
1, 2006 to December 31, 2007.

<TABLE>
<CAPTION>

    DATE OF SALE        TITLE OF SECURITIES     NO. OF SHARES                CONSIDERATION
    ------------        -------------------     -------------                -------------
<S>                     <C>                     <C>                          <C>

  1/1/07 - 12/31/07        Common Stock           2,666,667      Reverse merger.
  1/1/07 - 12/31/07        Common Stock            260,000       Cash
  1/1/07 - 12/31/07        Common Stock            694,554       Debt issuance
  1/1/07 - 12/31/07        Common Stock            692,691       Services rendered
  1/1/07 - 12/31/07        Common Stock            520,863       Accrued liabilities
  1/1/07 - 12/31/07        Common Stock           2,411,074      Salaries
  1/1/07 - 12/31/07        Common Stock           2,895,534      Notes payable and accrued interest
  1/1/07 - 12/31/07          Warrants              975,000       Warrants issued
  1/1/07 - 12/31/07           Options                 -          Options issued

  1/1/06 - 12/31/06          Warrants                 -          Warrants issued
  1/1/06 - 12/31/06           Options                 -          Options issued
</TABLE>


Exemption from Registration Claimed

All of the sales by the Company of its unregistered  securities were made by the
Company in reliance upon Section 4(2) of the Act. All of the individuals  and/or
entities listed above that purchased the unregistered  securities were all known
to the Company and its management,  through pre-existing business relationships,
as long standing business  associates,  friends,  and employees.  All purchasers
were provided access to all material information,  which they requested, and all
information  necessary to verify such  information  and were afforded  access to
management of the Company in connection with their purchases.  All purchasers of
the unregistered securities acquired such securities for investment and not with
a view  toward  distribution,  acknowledging  such  intent to the  Company.  All
certificates  or  agreements  representing  such  securities  that  were  issued
contained restrictive legends,  prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from  registration in any further resale or
disposition.



<PAGE>


ITEM  6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

CAUTIONARY AND FORWARD LOOKING STATEMENTS

In addition to statements of historical  fact, this Annual Report on Form 10-KSB
for the year ended December 31, 2007 contains  forward-looking  statements.  The
presentation of future aspects of NexHorizon Communications, Inc. ("NexHorizon,"
the "Company" or "issuer")  found in these  statements is subject to a number of
risks and  uncertainties  that could cause actual  results to differ  materially
from those  reflected in such  statements.  Readers are  cautioned  not to place
undue reliance on these forward-looking  statements,  which reflect management's
analysis  only as of the date hereof.  Without  limiting the  generality  of the
foregoing,  words  such as "may,"  "will,"  "expect,"  "believe,"  "anticipate,"
"intend,"  or  "could"  or  the  negative   variations   thereof  or  comparable
terminology are intended to identify forward-looking statements.

These forward-looking statements are subject to numerous assumptions,  risks and
uncertainties  that may cause the  Company's  actual  results  to be  materially
different from any future  results  expressed or implied by the Company in those
statements.  Important  facts that could prevent the Company from  achieving any
stated goals include, but are not limited to, the following:

Some of these risks might include, but are not limited to, the following:

          (a)  volatility or decline of the Company's stock price;
          (b)  potential fluctuation in quarterly results;
          (c)  failure of the Company to earn revenues or profits;
          (d)  inadequate capital to continue or expand its business,  inability
               to raise  additional  capital or financing to implement  business
               plans;
          (e)  failure to commercialize its technology or to make sales;
          (f)  rapid and significant changes in markets;
          (g)  litigation  with or  legal  claims  and  allegations  by  outside
               parties; and
          (h)  insufficient revenues to cover operating costs.

There is no assurance that the Company will be  profitable,  the Company may not
be able to successfully develop, manage or market its products and services, the
Company may not be able to attract or retain qualified executives and technology
personnel,  the Company's products and services may become obsolete,  government
regulation may hinder the Company's business, additional dilution in outstanding
stock ownership may be incurred due to the issuance of more shares, warrants and
stock options,  or the exercise of warrants and stock  options,  and other risks
inherent in the Company's businesses.

The Company  undertakes no obligation to publicly  revise these  forward-looking
statements to reflect events or circumstances  that arise after the date hereof.
Readers should  carefully  review the factors  described in other  documents the
Company files, from time to time, with the SEC,  including the Quarterly Reports
on Form 10-QSB and Annual  Reports on Form  10-KSB  filed by the Company and any
Current Reports on Form 8-K filed by the Company.

Business Overview
-----------------

The Company is involved in identifying  series of  strategically  targeted rural
cable systems and networks. The Company intends to selectively acquire,  upgrade
and consolidate the capabilities of these systems such that the sum of the whole
will be greater than its parts. Each acquired system,  where  appropriate,  will
expand its basic cable TV services to include Digital,  Video on Demand, Pay per
View,  High-speed Internet,  and Telephone (Voice over Internet Protocol "VoIP")
through either its existing cable network of WiFi last mile strategies.

<PAGE>


Plan Of Operations

At December 31,  2007,  we had no cash on hand.  We intend to use our  operating
cash flow to  continue to support  operations.  We intend to continue to develop
the business opportunity through acquisition and organic growth. The development
of the business  opportunity  includes  continued  marketing efforts and product
testing over the next twelve months.

In the  continuance  of our business  operations we do not intend to purchase or
sell any  significant  assets and we do not expect a  significant  change in the
number of employees outside of our growth through acquisition.

We are  dependent  on  raising  additional  equity  and/or,  debt  to  fund  any
negotiated  settlements  with our  outstanding  creditors  and meet our  ongoing
operating  expenses.  There is no  assurance  that we will be able to raise  the
necessary  equity  and/or  debt  that  we will  need  to be  able  to  negotiate
acceptable  settlements  with our  outstanding  creditors  or fund  our  ongoing
operating expenses.  We cannot make any assurances that we will be able to raise
funds through such activities.

Results Of  Operations  - Year Ended  December  31, 2007  Compared To Year Ended
December 31, 2006

Net Sales

Net sales were $343,812 for the year ended December 31, 2007 compared to $29,842
for the year ended December 31, 2006.  This  represents an increase of $313,970.
The  increase  is  attributable  to the  increased  revenue  received  from  the
acquisition of cable TV systems acquired in April 2006 and February 2007.

Cost of Sales

Cost of sales were  $242,764 for the year ended  December  31, 2007  compared to
$24,248 for the year ended  December 31, 2006.  This  represents  an increase of
$218,516 or 901%.  The increase is attributed to the  proportionate  increase in
revenue  from the  acquisition  of cable TV systems  acquired  in April 2006 and
February 2007.

Operating Expenses

Operating expenses were $2,779,290 for the year ended December 31, 2007 compared
to $1,320,495 for the year ended December 31, 2006.  This represents an increase
of $1,458,795 or 110% when compared to expenses for 2006. Of the 2007  operating
expense,   $1,831,484  or  70%  is  non-cash  related  to  various  compensation
arrangements, impairment of goodwill and depreciation and amortization.

Liquidity and Capital Resources

We had a net  working  capital  deficit of  $2,369,017  at  December  31,  2007.
Management  recognizes the Company must generate additional  resources to enable
it to continue operations.

In  the  first  quarter  of  2008,  we  executed  a  three  year  debenture  for
approximately $1,760,000. The debenture is repaid as interest only for the first
six months with principal and interest during the remaining months.  Interest is
paid monthly at the higher of 11.5% or prime plus 4%.

A portion of the  debenture  proceeds was used to acquire two cable TV companies
located  in the San  Diego  metropolitan  area  ("Chula  Vista  Cable,  Ltd" and
"National City Cable,  Inc.") effective  January 1, 2008. The combined  entities
serve  over  3,400  subscribers  representing   approximately  $1.6  million  in

<PAGE>

historical revenue. The combined entities were acquired for $5.0 million paid in
$750,000 of cash, 2.5 million shares of Class A Preferred stock with an estimate
fair  market  value of  $2,500,000,  and $1.75  million  in the form of a 3 year
balloon note bearing interest at 6%, paid quarterly.

We will  continue  to seek  working  capital  through  the equity  markets.  The
successful  outcome of future fund raising  activities  cannot be  determined at
this time, and there is no assurance that, if achieved,  we will have sufficient
funds to execute its intended new business plan or generate  positive  operating
results.

During 2007, we issued  7,214,716  shares of common stock in connection with the
conversion  of accounts  payable,  notes  payable and  services  rendered in the
aggregate amount of $1,349,155.

Going Concern

Our  independent  registered  public  accounting firm has stated in their report
included in this Form 10-KSB,  that the Company has recurring  operating  losses
and had negative cash flows from operations for each of the years ended December
31, 2007 and 2006, and has a stockholders' deficit of $2,974,699 at December 31,
2007. These factors,  among others,  raise substantial doubt about the Company's
ability to continue as a going concern.

Critical Accounting Policies

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial  statements and reported  amounts of revenues and expenses  during
the reporting period. Actual results may differ from those estimates.

Revenue Recognition

The Company  recognizes  revenue in accordance  with Staff  Accounting  Bulletin
("SAB") No. 101,  "Revenue  Recognition in Financial  Statements," as revised by
SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of
an  arrangement  exists,  services  have been  performed,  the price is fixed or
readily  determinable and collectibility is probable.  Sales are recorded net of
sales discounts.

Stock-Based Compensation

On January 1, 2006, we adopted Statement of Financial  Accounting  Standards No.
123 (revised  2004),  Share-Based  Payment,  ("SFAS  123(R)") which requires the
measurement and recognition of compensation  expense for all share-based payment
awards made to our employees and directors  based on estimated  fair values.  We
adopted SFAS 123(R) using the modified  prospective  transaction  method,  which
requires the  application of the accounting  standard as of January 1, 2006, the
first day of our fiscal year 2006. Our consolidated  financial  statements as of
and for the year ended  December 31, 2006 reflect the impact of SFAS 123(R).  In
accordance with the modified  prospective  transition  method,  our consolidated
financial statements for prior periods have not been restated to reflect, and do
not include,  the impact of SFAS  123(R).  The value of the portion of the award
that is  ultimately  expected  to vest is  recognized  as an  expense  over  the
requisite service periods in our consolidated statement of operations.  Prior to
the adoption of SFAS 123(R),  we accounted for  stock-based  awards to employees
and directors  using the intrinsic  value method in accordance  with  Accounting

<PAGE>

Principals  Board  Opinion  No.  25 as  allowed  under  Statement  of  Financial
Accounting  Standards No. 123,  Accounting for  Stock-Based  Compensation  (SFAS
123). SFAS 123(R) requires  forfeitures to be estimated at the time of grant and
revised,  if necessary,  in subsequent periods if actual forfeitures differ from
those estimated.  All of the Company's employee  share-based payments were fully
vested as of  December  31,  2005.  Accordingly,  there was no expense  incurred
related to the adoption of SFAS 123(R).

Issuance of Stock for Non-cash Consideration

All issuance of the Company's common stock for non-cash  consideration have been
assigned a dollar amount  equaling  either the market value of the shares issued
or the value of consideration  received whichever is more readily  determinable.
The  majority  of the  non-cash  consideration  received  pertains  to  services
rendered by  consultants  and others and has been valued at the market  value of
the shares  issued.  In certain  issuances,  the Company may  discount the value
assigned to the stock issued for illiquidity and restrictions on resale.

The Company's accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services  follows the  provisions  of Emerging
Issues Task Force ("EITF) 96-18,  "Accounting  for Equity  Instruments  That are
Issued to Other than  Employees for Acquiring,  or in  Conjunction  with Selling
Goods  or  Services"  and  EITF  00-18,   "Accounting  Recognition  for  Certain
Transactions  Involving Equity Instruments Granted to Other Than Employees." The
measurement  date  for the  fair  value  of the  equity  instruments  issued  is
determined bat the earlier of (i) the date at which a commitment for performance
by the  consultant or vendor is reached or (ii) the date at which the consultant
or vendor's performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting  agreement.  In accordance to EITF 00-18, an asset acquired in
exchange for the issuance of fully vested,  non-forfeitable  equity  instruments
should not be presented or  classified  as an offset to equity on the  grantor's
balance  sheet once the equity  instrument is granted for  accounting  purposes.
Accordingly,  the Company  records the fair value of the common stock issued for
consulting services to be performed in future periods as prepaid services in its
consolidated balance sheet.


ITEM 7.   FINANCIAL STATEMENTS.

The audited  consolidated  financial  statements  and the related  notes are set
forth at pages F-1 through F-17 attached hereto.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

None.

ITEM 8A.  CONTROLS AND PROCEDURES.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the  participation  of our management,  including
our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure  controls and  procedures,  as such term is defined
under Rule 13a-15(e)  promulgated under the Securities  Exchange Act of 1934, as
amended  (the  Exchange  Act).  As a result of this  evaluation,  we  identified
material  weaknesses  in our  internal  control over  financial  reporting as of
December 31, 2007.  Accordingly,  we concluded that our disclosure  controls and
procedures were not effective as of December 31, 2007.

Our internal controls over financial  reporting ("ICFR") are designed to provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of  consolidated  financial  statements  for  external  purposes in
accordance with generally accepted accounting  principles.  Our internal control
over financial reporting includes those policies and procedures that:

<PAGE>


          i.   pertain to the maintenance of records that, in reasonable detail,
               accurately and fairly reflect the  transactions  and dispositions
               of our assets;

          ii.  provide  reasonable  assurance that  transactions are recorded as
               necessary  to  permit   preparation  of  consolidated   financial
               statements  in  accordance  with  generally  accepted  accounting
               principles, and that our receipts and expenditures are being made
               only in accordance  with  authorizations  of our  management  and
               directors; and

          iii. provide  reasonable  assurance  regarding  prevention  or  timely
               detection of unauthorized acquisition,  use or disposition of our
               assets  that  could have a  material  effect on the  consolidated
               financial statements.


ITEM 8(A)T.  INTERNAL CONTROLS AND PROCEDURES

Management's Annual Report on Internal Control Over Financial Reporting.

Management is responsible for  establishing  and maintaining  adequate  internal
control over financial reporting.  Our management conducted an evaluation of the
effectiveness  of our internal  control over  financial  reporting  based on the
framework in Internal Control - Integrated  Framework issued by the Committee of
Sponsoring  Organizations of the Treadway  Commission.  Based on our evaluation,
management has concluded, as of December 31, 2007, we did not maintain effective
controls  over the  financial  reporting  process  because we had the  following
deficiencies:

     1.   Shortage  of  qualified  information  technology,   IT  personnel  and
          financial reporting personnel due to limited financial resources. This
          material weakness can lead to the following:


          -    An  inability  to ensure  there is timely  analysis and review of
               accounting records, spreadsheets, and supporting data; and


          -    an  inability  to  effectively  monitor  access  to, or  maintain
               effective controls over changes to, certain financial application
               programs and related data.

This shortage in financial  reporting  staff created  adjustments  to our annual
report for 2007, which were not detected by management. In recent years, we have
consummated  a  series  of  complex  debt,  equity,   spin-off  and  acquisition
transactions   involving  the  application  of  highly  specialized   accounting
principles,   which  have   resulted  in   deficiencies.   Specifically,   these
deficiencies  were  primarily  attributable  to (1) inability to ensure that the
accounting for our debt and equity-based  transactions is accurate and complete,
(2) inability to ensure that the  accounting  for our  acquisition  and spin-off
activities is accurate and complete, (3) lack of comprehensive  documentation of
accounting policies and procedures.

Management has determined that these control  deficiencies  constituted material
weaknesses in our internal  control over financial  reporting as of December 31,
2007. A material  weakness is a control  deficiency,  or  combination of control
deficiencies,  in ICFR  such  that  there  is a  reasonable  possibility  that a
material  misstatement of our annual or interim financial statements will not be
prevented or detected on a timely  basis by  employees  in the normal  course of
their assigned functions.

Notwithstanding  these  material  weaknesses,  we believe that the  consolidated
financial  statements  included in this report fairly  present,  in all material
respects,  our consolidated  financial  position and results of operations as of
and for the year ended December 31, 2007.

<PAGE>

Inherent Limitations Over Internal Controls

Internal control over financial  reporting cannot provide absolute  assurance of
achieving  financial reporting  objectives because of its inherent  limitations,
including  the  possibility  of human error and  circumvention  by  collusion or
overriding of controls.  Accordingly,  even an effective internal control system
may not  prevent  or detect  material  misstatements  on a timely  basis.  Also,
projections of any evaluation of  effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions or
that the degree of compliance with the policies or procedures may deteriorate.

Remediation of Material Weakness

As discussed in  Management's  Annual Report on Internal  Control over Financial
Reporting,  as of December  31,  2007,  there were  material  weaknesses  in our
internal control over financial reporting.  To the extent reasonably possible in
our current financial  condition,  we have authorized the addition of additional
staff  members to the finance  department  to ensure  that there are  sufficient
resources  within  the  department  to  prepare  our  financial  statements  and
disclosures in accordance with accounting  principles  generally accepted in the
United  States of America.  We are in the process of analyzing our processes for
all business units and the  establishment of formal policies and procedures with
necessary  segregation of duties,  which will establish  mitigating  controls to
compensate for the risk due to lack of segregation  of duties.  In addition,  we
are evaluating the necessary steps to improve the financial  reporting of all of
our business units and we are in the initial planning phase of upgrading,  where
possible,  certain of our information  technology  systems  impacting  financial
reporting.  We are currently  analyzing  the  financial  impact of the hiring of
information  technology  management staff that is adequately qualified to ensure
that the IT general computing  controls are effective over our systems impacting
financial reporting.

Through these steps, we believe we are addressing the deficiencies that affected
our internal control over financial  reporting as of December 31, 2007. However,
the  effectiveness  of any system of  internal  controls  is subject to inherent
limitations  and  there  can be no  assurance  that our  internal  control  over
financial  reporting  will  prevent or detect all errors.  Because the  remedial
actions  require  hiring  of  additional  personnel,  upgrading  certain  of our
information  technology  systems,  and relying  extensively on manual review and
approval,  the  successful  operation  of these  controls  for at least  several
quarters  may be required  before  management  may be able to conclude  that the
material  weakness  has been  remediated.  We intend to continue to evaluate and
strengthen  our  ICFR  systems.  These  efforts  require  significant  time  and
resources. If we are unable to establish adequate ICFR systems, we may encounter
difficulties  in  the  audit  or  review  of  our  financial  statements  by our
independent public accountants, which in turn may have a material adverse effect
on our ability to prepare  financial  statements in accordance  with GAAP and to
comply with our SEC reporting obligations.

Attestation Report of the Registered Public Accounting Firm.

This  annual  report does not include an  attestation  report of our  registered
public  accounting  firm regarding  internal  control over financial  reporting.
Management's  report was not subject to  attestation  by our  registered  public
accounting firm pursuant to temporary rules of the SEC that permit us to provide
only management's report in this annual report.

Changes in Internal Control Over Financial Reporting.

We have made no change in our internal control over financial reporting that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.

ITEM 8B.  OTHER INFORMATION.

None.


<PAGE>



                                     PART II

ITEM 9. DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

All  directors of the Company  hold office until the next annual  meeting of the
security holders or until their successors have been elected and qualified.  The
officers of the Company are  appointed by the board of directors and hold office
until their death,  resignation or removal from office. The Company's  directors
and executive  officers,  their ages,  positions held, and the duration of their
office are as follows:


 Name                      Age     Position
 Calvin D. Smiley, Sr.     55      Chief Executive Officer, President & Director
 Daniel M. Smith,          43      Chief Financial Officer, Executive Vice-
                                   President & Director
 John T. Conroy            51      EVP of Strategic Development & Director
   Gregory J. Liptak       68      Director


Biographies

Calvin  D.  Smiley.  Mr.  Smiley  was  appointed  the Chief  Executive  Officer,
President  and a Director  of the Company in October  2006.  He has more than 30
years in the  broadcasting and cable  television  industries.  He previously had
co-founded  Sunrise  Broadband Group,  Inc. from 2004 through 2006. From 2001 to
2003,  he was a  telecommunications  consultant  and began work to  develop  the
Sunrise business strategy. Mr. Smiley held various executive positions with TCOM
Ventures Corporation headquartered in Englewood,  Colorado. From 2000 to 2001 he
served as a director,  President and CEO of TCOM Ventures, with a business focus
to use a digital wireless platform to provide broadband services to customers of
acquired rural ISP's and competitive  local exchange carriers  ("CLEC's").  From
1998 to 1999,  he  co-founded  and served as President of  Communicast,  Inc., a
successful  turn-key  marketing and  advertising  sales company which  developed
revenues for rural cable television systems,  wireless providers and independent
television  stations.  Mr.  Smiley  attended  Geneva  College  in Beaver  Falls,
Pennsylvania.  He  completed  strategic  management  courses  of  study  at  the
University of Pittsburgh.

Daniel  Smith.  In October 2006,  Mr. Smith was  appointed  the Chief  Financial
Officer and a Director of the  Company.  Mr.  Smith has over 20 years of finance
and accounting  experience.  He previously had co-founded and was CFO of Sunrise
Broadband  Group,  Inc. Mr. Smith has held various other  positions from analyst
through CFO. He has extensive  experience in finance,  mergers and acquisitions,
SEC compliance and  telecommunications.  Mr. Smith's work history includes Chief
Financial  Officer at REANET  Corporation  in Durango,  Colorado.  Mr. Smith was
Director of SEC Reporting at AIMCO in Denver from 1998 through  2000.  Mr. Smith
led all SEC reporting and Annual reports along with  supporting all fund raising
and M&A efforts.  Mr. Smith received his B.S. in Accounting  from the University
of Akron, in Akron Ohio.

John T. Conroy.  Mr.  Conroy  served as Acting Chief  Executive  Officer,  Chief
Financial  Officer,  Secretary and  Treasurer  prior to October 2006. In October
2006, Mr. Conroy  resigned these  positions and was appointed the Executive Vice
President of Strategic Development and a Director of the Company. Mr. Conroy was
the co-founder of NexHorizon Communications, Inc. (formerly Y-Tel International,
Inc.) and served as its Chief  Financial  Officer  from  October 2004 to October
2006.  Mr.  Conroy has over 15 years  experience  with  financial  and executive
management responsibilities in the healthcare field. He has been Chief Financial
Officer and Chief Executive Officer for four hospitals in Florida and Louisiana.
His  major  accomplishments  include  the  successful  turn  around of two rehab
hospitals.  Prior to Mr. Conroy taking over the projects,  both  hospitals  were
reflecting negative cash flows in excess of one million dollars. After two years

<PAGE>

in each  facility,  both had achieved a positive cash flow position in excess of
one million dollars while dropping the Medicare utilization within each facility
from  98% to  62%.  He is the  former  founder  and  CEO of  Specialty  Hospital
Resources, Inc., a rehab development company specializing in designing, building
and managing physical rehabilitation facilities for hospitals.

Gregory J. Liptak.  In November 2006, Mr. Liptak was appointed a Director of the
Company.  Mr. Liptak is currently a managing member of Western Media Group, LLC,
a direct  response  agency he founded to place products on cable  television and
broadcasting  stations nationwide.  Prior to Western Media Group, Mr. Liptak was
CEO  of  Across  Media  Networks,   LLC.  For  many  of  his  41  years  in  the
communications  industry, Mr. Liptak served as President of Jones Media Networks
and Jones  Intercable  and  Spacelink.  Mr.  Liptak has a B.S. and M.S. from the
University of Illinois.

Compensation and Benefit  Committee.  The Board has appointed a Compensation and
Benefit Committee consisting of Messrs.  Smiley and Liptak. The Compensation and
Benefit  Committee  has been  authorized  to take those actions on behalf of the
Company allowed by law in connection with the  determination of compensation and
benefits of officers and directors.

Compensation of Directors. The Company does not currently pay directors' fees in
cash to its board  members,  nor does the  Company  pay  directors'  expenses in
attending board meetings.

Audit  Committee.  The Board has  appointed  an Audit  Committee  consisting  of
Messrs.  Smith and  Conroy.  The Audit  Committee  will  oversee  the  Company's
corporate  accounting and financial  reporting  process.  For this purpose,  the
Audit  Committee  will  perform  several  functions.  The Audit  Committee  will
evaluate the performance of and assesses the  qualifications  of the independent
auditors;  determine  the  engagement  of the  independent  auditors;  determine
whether to retain or terminate the existing  independent  auditors or to appoint
and engage new  independent  auditors;  review and approve the  retention of the
independent  auditors to perform any proposed  permissible  non-audit  services;
monitor the rotation of partners of the  independent  auditors on the  Company's
engagement  team as  required  by law;  review the  financial  statements  to be
included in the  Company's  annual  report on Form 10-KSB;  and  discusses  with
management and the independent  auditors the results of the annual audit and the
results of the Company's quarterly financial statements.


Section 16(a) Beneficial Ownership Reporting Compliance

Section  16(a) of the Exchange Act of 1934,  as amended,  requires the Company's
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered  class  of the  Company's  equity  securities,  to file  with the SEC
reports of  ownership  and changes in ownership of Common Stock and other equity
securities of the Company.  Such  reporting  persons are required to furnish the
Company with copies of all Section 16(a) forms they file. During the fiscal year
ended December 31, 2007 there were no transactions by officers, directors or 10%
shareholders that required the filing of any Form 4.



<PAGE>




ITEM 10.  EXECUTIVE COMPENSATION.

                           Summary Compensation Table

The  following  table sets forth the cash and non-cash  compensation  paid by or
incurred  on behalf of the  Company to its Chief  Executive  Officer and certain
other executive officers for the years ended December 31, 2007, 2006 and 2005.

<TABLE>
<CAPTION>

                              SUMMARY EXECUTIVES COMPENSATION TABLE

                                                                         Non-equity     Non-qualified
                                                                           incentive        deferred
                                                   Stock      Option         plan         compensation      All other
                                Salary     Bonus    awards     awards    compensation       earnings      compensation     Total
   Name & Position      Year      ($)       ($)       ($)        ($)          ($)             ($)              ($)          ($)
---------------------- ------- ---------- -------- ---------- ---------- -------------- ----------------- -------------- ----------
<S>                    <C>     <C>        <C>      <C>        <C>        <C>            <C>               <C>            <C>

Calvin D. (1)           2007    250,000      0         0          0            0               0                0         250,000
Smiley, President(2)    2006       0         0         0          0            0               0                0            0
                        2005       0         0         0          0            0               0                0            0
---------------------- ------- ---------- -------- ---------- ---------- -------------- ----------------- -------------- ----------

Daniel Smith, (3)       2007    225,000      0         0          0            0               0                0         225,000
Chief Financial         2006       0         0         0          0            0               0                0            0
Officer (4)             2005       0         0         0          0            0               0                0            0
---------------------- ------- ---------- -------- ---------- ---------- -------------- ----------------- -------------- ----------
Steve Lipman(5)         2007       0         0         0          0            0               0                0            0
                        2006       0         0         0          0            0               0                0            0
                        2005    132,000      0         0          0            0               0              9,900       141,000
---------------------- ------- ---------- -------- ---------- ---------- -------------- ----------------- -------------- ----------
John T Conroy, (6)      2007    200,000      0         0          0            0               0                0         200,000
EVP of Strategic        2006       0         0         0          0            0               0                0            0
Development (7)         2005    144,000      0         0          0            0               0             10,800       154,800
---------------------- ------- ---------- -------- ---------- ---------- -------------- ----------------- -------------- ----------
</TABLE>


     (1)  Mr. Smiley was compensated,  under his employment contract,  $250,000.
          All of his 2007  compensation  was paid in the issuance of  restricted
          common stock based upon each  quarter-end  closing  stock  price.  Mr.
          Smiley  received  1,566,105  shares at an average stock price of $0.16
          per share.

     (2)  Mr.  Smiley was  appointed  the CEO and  President  of the  Company in
          October 2006. Mr. Smiley waived his right to compensation during 2006.

     (3)  Mr. Smith was compensated,  under his employment  contract,  $225,000.
          All of his 2007  compensation  was paid in the issuance of  restricted
          common stock based upon each  quarter-end  closing  stock  price.  Mr.
          Smith received 1,409,494 shares at an average stock price of $0.16 per
          share.

     (4)  Mr. Smith was appointed  the CFO of the Company in October  2006.  Mr.
          Smith waived his right to compensation during 2006.

     (5)  Mr.  Lipman,  was the CEO and President of the Company until  November
          2005  when  his   contract  was   terminated.   The  $9,900  of  other
          compensation in 2005 consists of an automobile allowance.

     (6)  Mr. Conroy was compensated,  under his employment contract,  $200,000.
          All of his 2007  compensation  was paid in the issuance of  restricted
          common stock based upon each  quarter-end  closing  stock  price.  Mr.
          Conroy  received  1,252,885  shares at an average stock price of $0.16
          per share.

     (7)  Mr. Conroy served as the acting CEO & CFO,  prior to October 2006. Mr.
          Conroy waived his right to compensation  during 2006. In October 2006,
          he  was   appointed  the   Executive   Vice   President  of  Strategic
          Development.  The $10,800  other  compensation  in 2005 consists of an
          automobile allowance.

<PAGE>

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END


The President and our most highly compensated  executive officers for the fiscal
year ended  December 31, 2007 (the "Named  Executive  Officers") did not receive
any options, warrants or stock.

Employment  Contracts  and  Termination  of  Employment  and  Change in  Control
Arrangements

In October 2006, employment agreements with three (3) officers were executed for
a three (3) year term. The future annual minimum payment under the agreements is
approximately $250,000,  $225,000 and $200,000, with potential annual increases,
as defined.  All three officers  waived their rights for the fourth quarter 2006
compensation.

We do not provide  pension,  retirement or similar benefits for our directors or
executive  officers.  We have no material bonus or profit sharing plans pursuant
to which cash or non-cash  compensation  is or may be paid to our  directors  or
executive  officers,  except that stock options may be granted at the discretion
of the board of directors or a committee thereof.

Compensation Pursuant to Stock Option Plan

On January 31, 2005,  our directors  ratified an amendment to the Company's 2001
Stock Option Plan (the "Plan") authorizing the plan to grant options to purchase
up to  3,500,000  shares of our  common  stock.  The  amendment  is  subject  to
shareholder approval.  The board's  responsibility will include the selection of
option  recipients,  as well as,  the type of option  granted  and the number of
shares covered by the option and the exercise price.  In 2004 2,500,000  options
were granted under the Plan. In 2007 and 2006 no options were awarded.

Plan options may either  qualify as  non-qualified  options or  incentive  stock
options under  Section 422 of the Internal  Revenue  Code.  Any incentive  stock
option  granted  under the plan must  provide for an exercise  price of at least
100% of the fair  market  value on the date of such grant and a maximum  term of
ten years.  If the employee owns more than 10% of our stock,  the exercise price
of any incentive  option  granted must be at least 110% of fair market value and
must be exercised within five years after the grant.

All of our officers,  directors,  key employees and consultants will be eligible
to receive  non-qualified  options under the plan. Only officers,  directors and
employees  who are  formally  employed by the  Company  are  eligible to receive
incentive options.

All incentive options are non-assignable and non-transferable, except by will or
by the  laws  of  descent  and  distribution.  If an  optionee's  employment  is
terminated for any reason other than death, disability or termination for cause,
the stock  option  will  lapse on the  earlier of the  expiration  date or three
months  following the date of termination.  If the optionee dies during the term
of employment, the stock option will lapse on the earlier of the expiration date
of the option or the date one-year  following the date of death. If the optionee
is permanently and totally disabled within the meaning of Section22(e)(3) of the
Internal  Revenue  Code,  the  plan  option  will  lapse on the  earlier  of the
expiration date of the option or one year following the date of such disability.


                             Option/SAR Grants Table

No options  were  granted  during the fiscal  years ended  December 31, 2007 and
2006.

<PAGE>


Aggregated  Option/SAR  Exercises  in Last  Fiscal  Year  and  Fiscal  Year  End
Option/SAR Values

No options were  exercised  during the fiscal years ended  December 31, 2007 and
2006.

<TABLE>
<CAPTION>

              Aggregated Option/SAR Exercises in Last Fiscal Year,
                      and Fiscal Year-End Option/SAR Values

                                                                Number of           Value of
                                                               Securities         Unexercised
                                                               Underlying         In-the-Money
                                                               Unexercised      Options/SARS at
                                                             Options/SARS at     FY-End ($)(1)
                                                                 FY-End
                                                            ------------------ -------------------
                                   Shares
                                  Acquired
                                     on          Value
                                  Exercise    Realized ($)    Exercisable/        Exercisable/
             Name                    (#)                      Unexercisable      Unexercisable
<S>                               <C>         <C>             <C>              <C>

Calvin D. Smiley                      0            0               0/0                $0/0
Daniel Smith                          0            0               0/0                $0/0
John Conroy                           0            0               0/0                $0/0
Gregory Liptak                        0            0               0/0                $/0
</TABLE>

1 On January 1, 2007, Mr. Liptak was awarded  100,000  warrants as  compensation
for his position on the Board of  Directors.  The fair value of the warrants was
recorded at $25,200.  Mr.  Liptak did not  exercise  any warrants in 2007 and on
December  31, 2007 the  warrants  expired.  No other Board  Member  received any
compensation for their position on the board.

Securities Authorized for Issuance Under Equity Compensation Plans

The  following  provides  information,  as  of  December  31,  2007,  concerning
compensation plans (including individual compensation  arrangements) under which
equity securities of the Company are authorized for issuance.

<TABLE>
<CAPTION>

                                 Number of securities       Weighted-average         Number of
                                   to be issued upon          exercise price         securities
                                   exercise of outstanding   of outstanding       remaining available
                                   options,                  options, warrants,      for future issuance
                                                                                  equity compensation
                                                                                    plans (excluding
                                                                                    securities
                                                                                      reflected
      Plan Category              warrants and rights            and rights             in column (a))
------------------------------  -----------------------   -----------------   ----------------
<S>                             <C>                       <C>                 <C>

Equity compensation plans
  approved by security holders                  -         $          -                    -

Equity compensation plans not
  approved by security holders          1,924,199 (1)     $        0.64           (1) 411,765

                                        -----------------         ------------    -----------
Total                                   1,924,199         $        0.64               411,765
</TABLE>

(1) Includes the 2001 Stock Option Plan, as amended in 2005, (the "Plan") as the
Plan has not been approved by the shareholders of the Company.

<PAGE>

For a complete  description of the Company's equity  compensation  plans, please
refer to Note 8 of our audited  financial  statements  as of December  31, 2007,
which are filed herein.

                          Directors Compensation Table

The following table sets forth certain information concerning  compensation paid
to our directors for services as directors,  but not including  compensation for
services as officers  reported in the "Summary  Executives  Compensation  Table"
during the year ended December 31, 2007:

<TABLE>
<CAPTION>
                                                                                  Non-qualified
                                                                    Non-equity       deferred
                   Fees earned                                      incentive      compensation     All other
                    or paid in     Stock awards   Option awards        plan          earnings      compensation       Total
      Name             cash            ($)             ($)         compensation        ($)             ($)             ($)
                       ($)                                             ($)
----------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
<S>               <C>             <C>             <C>             <C>             <C>             <C>             <C>

Calvin D. Smiley      $ -0-           $ -0-           $ -0-           $ -0-           $ -0-           $ -0-           $ -0-
----------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Daniel Smith          $ -0-           $ -0-           $ -0-           $ -0-           $ -0-           $ -0-           $ -0-
----------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
John Conroy           $ -0-           $ -0-            $-0-           $ -0-            $-0-           $ -0-           $ -0-
----------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Gregory Liptak1       $ -0-           $ -0-          $25,200          $ -0-            $-0-            $-0-          $25,200
----------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
</TABLE>

Assumptions relating to the estimated fair value of stock warrant granted to Mr.
Liptak during 2007,  which we are accounting for in accordance with SFAS 123(R),
are as follows:  risk-free  interest  rate of 5%;  expected  dividend  yield 0%;
expected life of one year;  and  volatility of 250%. Mr. Liptak did not exercise
the warrant in 2007 and such warrant  expired on December  31, 2007.  Please see
Note 8 to our consolidated  financial  statements for further  discussion of our
assumptions relating to the estimated fair value of equity awards.

The Company does not currently pay any cash fees to its directors,  nor does the
Company pay directors' expenses in attending board meetings.


ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

Beneficial Ownership

The following  table sets forth  certain  information  regarding the  beneficial
ownership of outstanding  shares of Common Stock as of December 31, 2007, by (a)
each  person  known  by  the  Company  to own  beneficially  5% or  more  of the
outstanding shares of Common Stock, (b) the Company's directors, Chief Executive
Officer and executive  officers whose total  compensation  exceeded $100,000 for
the last  fiscal  year,  and (c) all  directors  and  executive  officers of the
Company as a group.

<TABLE>
<CAPTION>

       Title of Class             Name and Address*        Amount and Nature of       Percent of Class(2)
                                 of Beneficial Owner         Beneficial Owner
----------------------------- -------------------------- -------------------------- -------------------------
<S>                           <C>                        <C>                        <C>

                              Calvin D. Smiley, Chief
       Common shares          Executive Officer &
                              Director                           3,431,033                   16.1%

       Common shares          Daniel M. Smith,                   2,695,931                   12.6%
                              Chief Financial
                              Officer & Director

       Common shares          Gregory J. Liptak,                     -                         %
                              Director

       Common shares          John T. Conroy,                    2,712,630                   12.7%
                              EVP & Director
                                                         -------------------------- -------------------------
All Directors and Executive Officers as a Group (4               8,839,594                   41.4%
persons)
</TABLE>

        * All Beneficial Owners address is 9737 Wadsworth Parkway,  Westminster,
CO 80021 (1) Based upon 21,341,418 shares of common stock issued and outstanding
on December 31, 2007.


ITEM  12.  CERTAIN   RELATIONSHIP   AND  RELATED   TRANSACTIONS,   AND  DIRECTOR
INDEPENDENCE.

Messrs.  Smiley,  Smith and  Conroy,  officers  and  directors  of the  Company,
received in 2007,  $250,000,  $225,000  and  $200,000,  respectively,  for their
services.  100% of the  compensation  received  was paid through the issuance of
restricted common stock.

During the year ended  December  31,  2007,  Messrs.  Smiley and Smith  received
2,800,001 shares of common stock as a result of the conversion of 566,667 shares
of the Series A Preferred  Stock.  During the year ended  December 31, 2007,  we
issued an aggregate of $40,000 in notes  payable,  with  interest  rates ranging
from 12% - 18% to Greg  Liptak,  a  director  of the  Company.  The  notes  were

<PAGE>

extended and are due in February 2008. In connection with the notes included the
issuance of 148,527 in warrants, with exercise prices ranging from $0.40 - $0.75
per share and terms ranging three to five years.

On December 31, 2007, the related party note above,  with interest was converted
to a new 3 year convertible  promissory note. The new balance is $44,850 bearing
interest at 10%.  The note holder has the option of  converting  the entire note
plus interest into restricted  common stock at the conversion price of $0.20 per
share. If the note holder converts the note to restricted  common stock then the
note holder will also receive an equal  number of warrants as to shares,  50% at
$0.40 and 50% at $0.75 per warrant.  The warrants expire two years from the date
of converting this note to stock.

The  Company  issued a note  payable in the amount of $10,000 to a member of its
management  for cash  received.  The note  accrued  interest at 10%,  matured in
December 2007 and is currently in default.

The  Company  issued a note  payable to a director  in the amount of $15,000 for
cash received. The note accrues interest at 10%, matured in December 2007 and is
currently in default.

The Company assumed a convertible  note payable to a relative of a member of the
Company's  management in the amount of $50,000.  The note payable is convertible
into shares of the Company's common stock at $0.17 per share, matured in October
2007 and was converted in December 2007. In addition, the holder of the note was
issued a warrant to purchase  23,529  shares of the  Company's  common  stock at
$0.17, which was exercised in January 2007.

The Year Ended December 31, 2006

Messrs.  Smiley and Smith,  officers and directors of the Company,  waived their
Rights for compensation in 2006. The aggregate value of waived  compensation was
approximately $99,000.

During the year ended  December 31, 2006,  the Company  issued 566,667 shares of
Series A Preferred Stock as  compensation  for certain members of management and
the board of  directors  as signing  bonuses.  The Series A Preferred  Stock was
valued at  $1,904,000  based on the  estimated  fair value of the  common  stock
equivalents  on the date of grant.  In January 2007,  such shares were converted
into 2,800,000 shares of common stock.

During the year ended  December 31, 2006,  the Company  issued 144,444 shares of
Series C Preferred  Stock in  connection  with the  conversion of amounts due to
John Conroy.  The Series C Preferred  Stock was valued at $204,443  based on the
estimated fair value of the common stock  equivalents  on the date of grant.  In
January 2007, such shares were converted into 606,667 shares of common stock.

In May 2006,  an officer  advanced  the  Company  $50,000  for  working  capital
purposes.  The advance bore interest at 9.75% and was due on demand. In December
2006,  the Company  issued  294,118  shares of common  stock,  based on the fair
market value on that date, in full satisfaction of the amounts due. In addition,
upon  conversion,  the Company issued a warrant to purchase 23,529 shares of the
Company's common stock,  which was valued at $18,000 (based on the Black Scholes
Option  pricing  model) and  recorded  as interest  expense in the  accompanying
consolidated  statements of operations in 2006.  The warrant is  exercisable  at
$0.17 per share vested upon grant and expired in December 2007. No warrants were
exercised in 2007.

<PAGE>

ITEM 13.  INDEX TO EXHIBITS.

The following is a complete  list of exhibits  filed as part of this Form 10KSB.
Exhibit  number  corresponds  to the numbers in the Exhibit table of Item 601 of
Regulation S-K.

    Exhibit        Description of Document

     3.1  Articles of Incorporation of National City Cable, Inc. (2)

     3.2  Bylaws of National City Cable, Inc. (2)


     4.1  Amended  Certificate  of  Designation  of Series A Preferred  Stock of
          NexHorizon Communications, Inc. (2)

     10.1 Addendum to Employment  Agreement between Y-Tel and Steve Lipman dated
          October 8, 2004. (1)

     10.2 Addendum to  Employment  Agreement  between  Y-Tel and J. Conroy dated
          October 8, 2004. (1)

     10.3 Addendum to Consulting  Agreement  between Y-Tel and Gil Epstein dated
          October 8, 2004. (1)

     10.4 Addendum to Consulting Agreement between Y-Tel and John McMurray dated
          October 8, 2004. (1)

     10.5 Addendum to Consulting Agreement between Y-Tel and Garry McHenry dated
          October 8, 2004. (1)

     10.6 Agreement Regarding Sale of Assets of and Stock In Two Cable Companies
          by Between  NexHorizon,  Chula Vista Cable, Ltd. and Ultronics,  Inc.,
          dated January 1, 2008 (2)

     10.7 Registration   and  Leakout   Agreement  by  and  between   NexHorizon
          Communications and Chula Vista Cable, Ltd., dated January 1, 2008 (2)

     10.8 Registration   and  Leakout   Agreement  by  and  between   NexHorizon
          Communications and National City Cable, Inc. (2)

     10.9 Security and Pledge  Agreement,  dated  January 1, 2008 by and between
          NexHorizon Communications and Chula Vista Cable, Ltd. (2)

     10.10Security  and  Pledge  and  Agreement,  dated  January  1, 2008 by and
          between  NexHorizon  Communications  and  Ultronics,  Inc. and Barbara
          Altbaum. (2)


     21.1 Subsidiaries*

     31.1 Certification by Chief Executive Officer. *

     31.2 Certification by Chief Financial Officer. *

     32.1 Section 906 Certification by Chief Executive Officer*

     32.2 Section 906 Certification by Chief Financial Officer*

---------------

 (1)  Incorporated by reference from our annual report on Form 10-KSB filed with
the SEC on May 26, 2006.
(2)  Incorporated  by reference from our current report on Form 8K filed with
the SEC on February 21, 2008.
 *  Filed herewith.

<PAGE>


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The  aggregate  fees billed or expected to be billed by KMJ Corbin & Company LLP
for  professional  services  rendered  for the  audit  of our  annual  financial
statements included in our annual report on Form 10-KSB and on quarterly reviews
for the fiscal years ended December 31, 2007 and 2006 were $100,000 and $30,000,
respectively.

Audit Related Fees

None.

Tax Fees

For the fiscal years ended December 31, 2007 and 2006, the aggregate fees billed
or  expected to be billed by KMJ Corbin & Company  LLP for tax  services,  other
than those services listed above, totaled $8,000 and $8,000, respectively.

We do  not  use  our  auditors  for  financial  information  system  design  and
implementation. These services, which include designing or implementing a system
that  aggregates  source data  underlying the financial  statements or generates
information  that is  significant  to our  financial  statements,  are  provided
internally  or by other  service  providers.  We do not engage our  auditors  to
provide compliance outsourcing services.

Policy  On Audit  Committee  Pre-Approval  Of Audit  And  Permissible  Non-Audit
Services Of Independent Auditors

Consistent  with the  policies and  guidelines  of the  Securities  and Exchange
Commission regarding audit independence,  the Audit Committee is responsible for
the pre-approval of all audit and permissible non-audit services provided by our
principal   accountants  on  a  case-by-case  basis.  Our  Audit  Committee  has
established a policy regarding  approval of all audit and permissible  non-audit
services  provided  by our  principal  accountants.  Our  Audit  Committee  pre-
approves  these  services by  category  and  service.  Our Audit  Committee  has
pre-approved all of the services provided by our principal accountants.



<PAGE>

                                                            KMJ CORBIN & COMPANY
                                                Business Advisors  Tax and Audit


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors of NEXHORIZON COMMUNICATIONS, INC.

We have  audited the  accompanying  consolidated  balance  sheets of  NexHorizon
Communications,  Inc. and  subsidiaries  (the "Company") as of December 31, 2007
and 2006, and the related consolidated  statements of operations,  stockholders'
deficit and cash flows for the years then ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures  in  the  consolidated  financial  statements.  The  Company  is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audits included consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material  respects,   the  financial  position  of  NexHorizon
Communications,  Inc. and  subsidiaries at December 31, 2007 and 2006),  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements,  the Company has incurred  recurring losses
from  operations  and  has  a  working  capital  deficit  of  $2,369,017  and  a
stockholders'  deficit of $2,974,699  at December 31, 2007.  These factors raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
consolidated financial statements do not include any adjustments relating to the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

As discussed in Note 3, the accompanying consolidated financial statements as of
and for the year ended December 31, 2006 have been restated to properly  account
for the reverse spin-off in February 2006.





/s/KMJ Corbin & Company LLP
Irvine, California
April 14, 2008


                                      F-1

<PAGE>

<TABLE>
<CAPTION>

                                                                        NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                                             CONSOLIDATED BALANCE SHEETS


------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                     <C>

ASSETS
                                                                            December 31, 2007       December 31, 2006
                                                                                                       (Restated)
                                                                          ----------------------  ----------------------
Current assets:
      Cash                                                                                  $ -                   $ 387
      Accounts receivable, net                                                           14,524                   1,470
      Prepaid expenses                                                                   80,718                   3,000
      Prepaid services                                                                   28,750                       -
                                                                          ----------------------  ----------------------
           Total current assets                                                         123,992                   4,857

Property and equipment, net                                                             361,472                  48,049

Other assets                                                                              7,538                   2,148
Intangibles, net                                                                        182,995                  93,055
                                                                          ----------------------  ----------------------

                                                                                      $ 675,997               $ 148,109
                                                                          ======================  ======================


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
      Accounts payable                                                              $ 1,758,003               $ 638,340
      Accrued expenses                                                                  262,494                 428,242
      Current portion of notes payable, net of discount                                 472,512               1,236,650
                                                                          ----------------------  ----------------------
           Current liabilities                                                        2,493,009               2,303,232

Notes payable, net of current portion                                                 1,157,687                       -
                                                                          ----------------------  ----------------------

           Total liabilities                                                          3,650,696               2,303,232
                                                                          ----------------------  ----------------------
Commitments and contingencies

Stockholders' deficit:
      Preferred Series A stock, no par value, 2,550,000 shares authorized;
         0 shares issued and outstanding                                                      -                       -
      Preferred Series B stock, no par value, 1,800,000 shares authorized;
         0 shares issued and none outstanding                                                 -                       -
      Preferred Series C stock, no par value, 650,000 shares authorized;
         0 shares issued and outstanding                                                      -                       -
      Common stock, $0.0001 par value, 50,000,000 shares authorized;
         21,341,418 and 2,666,667 shares issued and outstanding, respectively             2,134                     267
      Additional paid in capital                                                      8,746,942               6,466,040
      Accumulated deficit                                                           (11,723,775)             (8,621,430)
                                                                          ----------------------  ----------------------

      Total stockholders' deficit                                                    (2,974,699)             (2,155,123)
                                                                          ----------------------  ----------------------

                                                                                      $ 675,997               $ 148,109
                                                                          ======================  ======================


------------------------------------------------------------------------------------------------------------------------
F-2                                                          See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                        NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                                               For the Years Ended December 31, 2007 and 2006 (Restated)

------------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                        <C>

                                                                                    Years Ended December 31,
                                                                         -----------------------------------------------
                                                                                 2007                      2006
                                                                         ----------------------     --------------------
                                                                                                        (Restated)

Net sales                                                                            $ 343,812                 $ 29,842

Cost of sales                                                                          242,764                   24,248
                                                                         ----------------------     --------------------

Gross profit                                                                           101,048                    5,594
                                                                         ----------------------     --------------------

Operating expenses:
Salaries and related expenses                                                          463,438                  722,205
Impairment of goodwill                                                               1,200,000                        -
General and administrative expenses                                                  1,115,852                  598,290
                                                                         ----------------------     --------------------

     Total operating expenses                                                        2,779,290                1,320,495
                                                                         ----------------------     --------------------

Loss on settlement of accrued liabilities                                                    -                1,078,975
Interest expense                                                                       424,103                  400,545
                                                                         ----------------------     --------------------

Net loss                                                                          $ (3,102,345)            $ (2,794,421)
                                                                         ======================     ====================



Basic and diluted loss per common share                                                $ (0.23)                 $ (1.05)
                                                                         ======================     ====================


Weighted average number of common
shares outstanding - basic and diluted                                              13,745,678                2,666,667
                                                                         ======================     ====================













------------------------------------------------------------------------------------------------------------------------
F-3                                                          See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                            NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES

                                                                            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                                                   For The Years Ended December 31, 2007 and 2006 (Restated)

----------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>      <C>        <C>           <C>
                                                                                                                      Total
                                                                     Common Stock                   Accumulated   Stockholders'
                                                                    Shares        Amount   AAPIC      Deficit       Deficit
                                                                  ----------------------------------------------------------------

Balance, December 31, 2005 (restated)                              2,666,667     $ 267   $ 3,828,332   $(5,827,009) $(1,998,410)

Capital contributions from SBG (restated):

     Cash                                                                  -         -       137,500             -      137,500

     Settlement of liabilities                                             -         -       350,366             -      350,366

     Settlement of accrued compensation                                    -         -       397,784             -      397,784

     Settlement of notes payable and accrued interest                      -         -       514,432             -      514,432

Loss on settlement (restated)                                              -         -     1,078,975             -    1,078,975

Estimated fair value of BCF and warrants (restated)                        -         -       158,651             -      158,651

Net loss (restated)                                                        -         -             -    (2,794,421)  (2,794,421)
                                                                  ----------------------------------------------------------------
Balance, December 31, 2006 (restated)                              2,666,667       267     6,466,040    (8,621,430)  (2,155,123)

Issuance of common stock in reverse merger                        11,200,035     1,120       681,080             -      682,200
                                                                                      .
Issuance of common stock for cash                                    260,000        26        51,974             -       52,000

Estimated fair value of common stock issued for debt
  issuance costs                                                     694,554        69       131,896             -      131,965

Estimated fair value of common stock issued for services
  rendered                                                           692,691        69       148,603             -      148,672

Estimated fair value of common stock issued for accrued
  liabilities                                                        520,863        52       119,500             -      119,552

Estimated fair value of common stock issued for salaries
  and related                                                      2,411,074       241       410,842             -      411,083

Common stock issued upon conversion of notes payable and
  accrued interest                                                 2,895,534       290       538,314             -      538,604

Estimated fair value of BCF and warrants                                   -         -       198,693             -      198,693

Net loss                                                                   -         -             -    (3,102,345)  (3,102,345)
                                                                  ----------------------------------------------------------------
Balance, December 31, 2007                                        21,341,418  $  2,134  $  8,746,942  $(11,723,775) $(2,974,699)
                                                                  ================================================================




----------------------------------------------------------------------------------------------------------------------------
F-4                                                            See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                          NEXHORIZON COMMUNICATIONS, INC. AND SUBSIDIARIES
                                                                                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                 For The Years Ended December 31, 2007 and 2006 (Restated)
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                <C>
                                                                                             2007              2006
                                                                                       ------------------ ----------------
                                                                                                             (Restated)
Cash flows from operating activities:
     Net loss                                                                               $ (3,102,345)    $ (2,794,421)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
        Depreciation and amortization                                                             56,729           20,198
        Estimated fair value of common stock issued to consultants for services                  148,672                -
        Estimated fair value of common stock issued to employees for services rendered           411,083                -
        Amortization of the estimated fair value of beneficial conversion features
           and warrants                                                                          169,671                -
        Amortization of estimated fair value of prepaid services                                  15,000                -
        Amortization of debt issuance costs                                                       54,986          158,651
        Loss on settlement of liabilities                                                              -        1,078,975
        Loss on disposal of property and equipment                                                     -            5,473
        Goodwill impairment                                                                    1,200,000                -
        Changes in operating assets and liabilities; net of acquisition
            Accounts receivable                                                                  (13,054)          (1,470)
            Prepaid expenses and other current assets                                            132,959           (1,970)
            Other assets                                                                               -             (160)
            Accounts payable and accrued expenses                                                572,713          770,248
            Accrued expenses and interest                                                              -            5,141
                                                                                       ------------------ ----------------
     Net cash used in operating activities                                                      (353,586)        (759,335)
                                                                                       ------------------ ----------------
Cash flows from investing activities:
     Purchase of property and equipment                                                          (18,304)          (3,309)
     Cash acquired in acquisition                                                                 27,398                -
                                                                                       ------------------ ----------------
     Net cash provided by (used in) investing activities                                           9,094           (3,309)
                                                                                       ------------------ ----------------
Cash flows from financing activities:
     Issuance of common stock for cash                                                            52,000                -
     Capital contributions                                                                             -          137,500
     Proceeds from the issuance of notes payable                                                 297,500          625,082
     Payments on notes payable                                                                    (5,395)               -
                                                                                       ------------------ ----------------
     Net cash provided by financing activities                                                   344,105          762,582
                                                                                       ------------------ ----------------
Decrease in cash                                                                                    (387)             (61)

Cash at beginning of year                                                                            387              448
                                                                                       ------------------ ----------------
Cash at end of year                                                                                  $ -            $ 387
                                                                                       ================== ================
Supplemental disclosure of cash flow information - Cash paid during the year
     for:
        Interest                                                                                 $ 6,000              $ -
                                                                                       ================== ================
        Income taxes                                                                                 $ -              $ -
                                                                                       ================== ================
Supplemental schedule of noncash investing and financing activities:
     Goodwill acquired in acquisition                                                        $ 1,200,000              $ -
                                                                                       ================== ================
     Acquisition of fixed assets included in accounts payable                                  $ 148,138              $ -
                                                                                       ================== ================
     Fixed assets acquired in acquisition                                                       $ 46,200        $ 100,600
                                                                                       ================== ================
     Intangible asset acquired in acquisition                                                  $ 100,000              $ -
                                                                                       ================== ================
     Estimated fair value of beneficial conversion feature and warrants                        $ 198,693        $ 158,651
                                                                                       ================== ================
     Estimated fair value of common stock issued and capital contributions
        received upon conversion of accounts payable and
        accrued expenses                                                                       $ 119,552        $ 748,150
                                                                                       ================== ================
     Estimated fair value of common stock issued and capital contributions
        received upon conversion of notes payable and accrued interest                          $538,604        $ 514,432
                                                                                       ================== ================
     Reclassification of accrued interest to note payable                                      $ 261,616              $ -
                                                                                       ================== ================
     Issuance of note payable for prepaid consulting                                           $ 123,000              $ -
                                                                                       ================== ================
     Estimated fair value of common stock issued as debt issuance costs                        $ 131,965              $ -
                                                                                       ================== ================

--------------------------------------------------------------------------------------------------------------------------
F-5                                                            See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------------------------

Nature of Business

NexHorizon  Communications,  Inc.  was  incorporated  in Delaware on January 16,
2001.  Prior to January  29,  2007,  NexHorizon  Communications  was named Y-Tel
International,  LLC ("Y-Tel").  On January 29, 2007,  Y-Tel  International,  LLC
changed  its  name  to  NexHorizon  Communications,  Inc.  ("NexHorizon"  or the
"Company" hereafter).

Y-Tel was a telecommunications  carrier featuring wholesale and retail products,
and Wi-Fi  networks,  services and devices.  During the year ended  December 31,
2006, the Company primarily generated revenue through international  termination
of inbound/outbound wholesale voice and data minutes.

Restructuring Activities

During  2006,  the  Company   changed  its  business   objective  from  being  a
telecommunication  carrier to a new strategic objective that redefines the cable
television industry's approach to business in rural areas;  specifically systems
with  subscriber  bases in the range of 2,500 to 35,000;  throughout  the United
States.

On October 17, 2006, the Company  entered into a contract for the acquisition of
Sunrise  Television  Networks,  Inc.  ("STN") (and its  wholly-owned  subsidiary
NexHorizon of Colorado,  Inc.  (formerly Sunrise  Broadband of Colorado,  Inc.))
from Sunrise Broadband Group,  Inc.  ("SBG").  STN's audit was completed in June
2007 and the  Company  closed  the  transaction  effective  June 30,  2007  that
"effective date."

In  connection  with these  changes in its  business  plans,  in late 2006,  the
Company's  management  and board of directors was  restructured.  Messrs.  Steve
Lipman, Todd Wallace and Allen Tracey resigned from the Board of Directors.  Mr.
John Conroy resigned as the acting Chief  Executive  Officer and Chief Financial
Officer, but retained his seat on the Company's Board of Directors.  During this
same  period,  Messrs.  Calvin  Smiley,  Gregory  Liptak and  Daniel  Smith were
appointed to the  Company's  Board of Directors.  Messrs.  Smiley and Smith were
appointed the Company's  Chief Executive  Officer and Chief  Financial  Officer,
respectively.

Immediately  prior to the Effective  Date,  NexHorizon had 11,200,035  shares of
common  stock  issued  and   outstanding  and  no  preferred  stock  issued  and
outstanding. Pursuant to the Merger, all of the outstanding common shares of STN
were exchanged into 2,666,667 shares of NexHorizon common stock.

Subsequent  to entering  into the Merger and prior to the  Effective  Date,  the
Company  issued an  aggregate of 566,667  shares of Series A preferred  stock to
former  members of management of STN as  compensation  for resigning  from their
positions at STN and accepting  management and board positions with the Company,
which were  converted to common stock and included in the share  exchange  noted
above.  As a result,  the  Company  recorded  the Merger as a  "reverse  merger"
whereby STN was considered to be the accounting acquirer and retained control of
the Company after the Merger.  The historical  financial  information  contained
herein is that of STN (the accounting acquirer).

In January 2007, the Company changed its name to NexHorizon Communications, Inc.
and affected a reverse split of its issued and outstanding  stock on a 1 for 8.5
basis.

The  Company's  new  mission is to identify a series of  strategically  targeted
rural cable systems and networks.  The Company  intends to selectively  acquire,
upgrade and consolidate  the  capabilities of these systems such that the sum of
the whole will be greater than its parts.  Each acquired  system will expand its
basic cable TV services to include  Digital,  Video on Demand  ("VoD"),  Pay per
View,  High-speed  Internet,  and Telephone  through  either its existing  cable
network or WiFi ("Wireless Fidelity") last mile strategies.

In the first quarter of 2008,  the Company  executed a three-year  debenture for
approximately  $1,760,000.  The  debenture is repaid with  interest only for the
first six months with  principal  and  interest  payments  during the  remaining
months. Payments are made monthly at the higher of 11.5% or prime plus 4%.

                                      F-6

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------------------------------
(Continued)
-----------

A portion of the  debenture  proceeds was used to acquire two cable TV companies
located  in the San  Diego  metropolitan  area  ("Chula  Vista  Cable,  Ltd" and
"National  City Cable,  Inc.") on January 1, 2008.  The combined  entities serve
over  3,400  subscribers  representing  approximately  $1.6  million  in  annual
historical revenue. The combined entities were acquired for $5.0 million paid in
$750,000  of cash,  2.5  million  shares  of  Class A  Preferred  stock  with an
estimated  fair value of  $2,500,000  and $1.75  million in the form of a 3 year
balloon note bearing interest at 6%, paid quarterly.

Going Concern

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of  business.  The  Company  has a working  capital  deficit of
$2,369,017  at  December  31,  2007 and has  incurred  operating  losses and had
negative cash flows from operations during the years ended December 31, 2007 and
2006,  which  raise  substantial  doubt about its ability to continue as a going
concern.

Management  recognizes the Company must generate additional  resources to enable
it to continue  operations.  The Company will  continue to seek working  capital
through  the public  markets.  The  successful  outcome of future  fund  raising
activities cannot be determined at this time, and there is no assurance that, if
achieved,  the  Company  will have  sufficient  funds to  execute  its  intended
business plan or generate positive operating results.

Principles of Consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
NexHorizon  Communications,   Inc.  and  its  wholly-owned   subsidiaries.   All
significant  intercompany  transactions  and balances  have been  eliminated  in
consolidation.

Fair Value of Financial Instruments

The  Company's  financial  instruments,  including  cash,  accounts  receivable,
accounts payable, accrued expenses and notes payable, have carrying amounts that
approximate their fair values due to their short maturities.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of the contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting periods.  Significant estimates made by management include,
among others, the realizability of accounts  receivable,  property and equipment
and intangible,  and the valuation of stock, options,  warrants and deferred tax
assets. Actual results could differ from these estimates.

Concentration of Credit Risk and Foreign Operations

Financial  instruments,  which potentially subject the Company to concentrations
of credit risk  consist of cash.  The Company  places its cash with high quality
financial  institutions  and at times may exceed the Federal  Deposit  Insurance
Corporation  ("FDIC")  $100,000  insurance limit. At December 31, 2007 and 2006,
the  Company  did not have any  accounts  with  balances  in  excess of the FDIC
insurance limits.

In 2007 and 2006,  the  Company  offered  its  services  predominantly  to rural
customers  located  within the  United  States and  extends  credit  based on an
evaluation of a customer's  financial  condition,  generally without collateral.
Exposure to losses on  accounts  receivable  is  principally  dependent  on each
customer's  financial  condition.  The Company  monitors its exposure for credit
losses and maintains  allowances for anticipated  losses, if required.  Although
the Company expects to collect  amounts due, actual  collections may differ from
the estimated amounts.  The Company does not expect any customer to exceed 5% of
its total accounts  receivable.  The allowance for doubtful accounts at December
31, 2007 and 2006 was approximately $11,543 and $577, respectively.

                                      F-7

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------------------------------
(Continued)
-----------

Property and Equipment

Property and equipment are stated at cost, and are being  depreciated  using the
straight-line  method over the  estimated  useful  lives of the related  assets,
ranging from five to fifteen years.  Maintenance and routine repairs are charged
to expense as incurred. Significant renewals and betterments are capitalized. At
the time of retirement or other disposition of property and equipment,  the cost
and  accumulated  depreciation  are removed from the accounts and any  resulting
gain or loss is reflected in the statement of operations.

Intangibles

Identifiable  intangibles acquired in connection with business  acquisitions are
recorded at their  respective  fair values (see Note 5).  Deferred  income taxes
have been recorded to the extent of  differences  between the fair value and the
tax basis of the assets acquired and liabilities assumed.

Long-Lived Assets

The Company's management assesses the recoverability of its long-lived assets by
determining  whether the depreciation and amortization of long-lived assets over
their remaining lives can be recovered  through  projected  undiscounted  future
cash flows. The amount of long-lived asset impairment, if any, is measured based
on fair  value and is charged to  operations  in the period in which  long-lived
asset  impairment is determined by management.  For the years ended December 31,
2007 and 2006, the Company  recorded  $1,200,000  and $0 of impairment  charges,
respectively.  There can be no assurance,  however,  that market conditions will
not change or demand for the  Company's  products  and services  will  continue,
which could result in additional impairment of long-lived assets in the future.

Revenue Recognition

The Company  recognizes  revenue in accordance  with Staff  Accounting  Bulletin
("SAB") No. 101, Revenue Recognition in Financial Statements,  as revised by SAB
No. 104. As such, the Company recognizes revenue when persuasive  evidence of an
arrangement exists, services have been performed,  the price is fixed or readily
determinable  and  collectibility  is probable.  Sales are recorded net of sales
discounts.  Through 2007,  the Company's  revenue was generated  from  broadband
services whereby the revenue is recognized during the month in which the service
is rendered.

Stock-Based Compensation

At December 31, 2007, the Company had two  stock-based  compensation  plans.  No
stock-based  employee  compensation  cost was  recognized  in the  statements of
operations for the years ended December 31, 2007 and 2006 as all options granted
to employees under the plans were fully vested prior to January 1, 2006.

Effective  January 1,  2006,  the  Company  adopted  the fair value  recognition
provisions  of Statement of Financial  Accounting  Standards  ("SFAS")  SFAS No.
123(R), Share Based Payment, using the  modified-prospective  transition method.
Under this transition method, compensation cost required to be recognized in the
periods ended subsequent to January 1, 2006 will include:  (a) compensation cost
for all share-based  payments  granted  subsequent to December 31, 2005 based on
the grant-date  fair value  estimated in accordance  with the provisions of SFAS
No. 123(R).

The Company calculates stock-based  compensation by estimating the fair value of
each  option  using  the  Black-Scholes  option  pricing  model.  The  Company's
determination  of fair value of share-based  payment awards are made as of their
respective dates of grant using that option pricing model and is affected by the
Company's  stock price as well as  assumptions  regarding a number of subjective
variables.  These  variables  include,  but are  not  limited  to the  Company's
expected  stock  price  volatility  over the term of the  awards  and actual and
projected  employee stock option exercise  behavior.  The  Black-Scholes  option
pricing model was developed  for use in estimating  the value of traded  options
that have no vesting or hedging restrictions and are fully transferable. Because
the  Company's  employee  stock  options have certain  characteristics  that are
significantly  different from traded options,  the existing valuation models may
not  provide an  accurate  measure of the fair value of the  Company's  employee
stock  options.  Although the fair value of employee stock options is determined
in accordance with SFAS No. 123(R) using an option-pricing model, that value may
not be indicative of the fair value observed in a willing  buyer/willing  seller
market  transaction.  The calculated  compensation  cost will be recognized on a
straight-line basis over the vesting period of the option.

                                      F-8

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------------------------------
(Continued)
-----------

The Company has issued stock options to employees and  directors,  with the only
condition  for  vesting are  continued  employment  or service  with the Company
during the related  vesting  period.  Option awards are granted with an exercise
price deemed  appropriate  by the board of  directors.  Prior to the adoption of
SFAS No. 123(R), the Company presented all tax benefits of deductions  resulting
from the exercise of stock  options as operating  cash flows in the statement of
cash flows.  Statement  123(R)  requires the cash flows  resulting  from the tax
benefits  resulting  from tax  deductions  in  excess of the  compensation  cost
recognized for those options  (excess tax benefit) to be classified as financing
cash  flows.  As there  were no stock  options  exercised  during the year ended
December 31, 2007 and 2006, there was no excess tax benefit to the Company.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company's common stock for non-cash consideration have been
assigned a dollar amount  equaling  either the market value of the shares issued
or the value of consideration  received whichever is more readily  determinable.
The  majority  of the  non-cash  consideration  received  pertains  to  services
rendered by  consultants  and others and has been valued at the market  value of
the shares  issued.  In certain  issuances,  the Company may  discount the value
assigned to the stock issued for illiquidity and restrictions on resale.

The Company's accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services  follows the  provisions  of Emerging
Issues Task Force ("EITF") No. 96-18, Accounting for Equity Instruments That are
Issued to Other Than  Employees for Acquiring,  or in Conjunction  with Selling,
Goods or  Services  and EITF  No.  00-18,  Accounting  Recognition  for  Certain
Transactions  Involving Equity Instruments Granted to Other Than Employees.  The
measurement  date  for the  fair  value  of the  equity  instruments  issued  is
determined at the earlier of (i) the date at which a commitment for  performance
by the  consultant or vendor is reached or (ii) the date at which the consultant
or vendor's performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting  agreement.  In accordance to EITF 00-18, an asset acquired in
exchange for the issuance of fully  vested,  nonforfeitable  equity  instruments
should not be presented or  classified  as an offset to equity on the  grantor's
balance  sheet once the equity  instrument is granted for  accounting  purposes.

Income Taxes

The  Company  accounts  for  income  taxes in  accordance  with  SFAS  No.  109,
Accounting  for Income Taxes.  Under the asset and liability  method of SFAS No.
109,  deferred  tax assets and  liabilities  are  recognized  for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences  are expected to be  recovered  or settled.  Under SFAS No. 109, the
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized  in  operations  in the period that  includes the  enactment  date. A
valuation  allowance is provided  for certain  deferred tax assets if it is more
likely than not that the Company  will not  realize  tax assets  through  future
operations.

Loss Per Share

Basic  earnings  per share  ("BEPS") is computed by dividing  loss  available to
common  stockholders by the weighted average number of outstanding common shares
during the period of  computation.  Diluted  earnings per share  ("DEPS")  gives
effect to all dilutive  potential common shares outstanding during the period of
computation.  The  computation of DEPS does not assume  conversion,  exercise or
contingent  exercise of securities  that would have an  anti-dilutive  effect on
earnings. All potentially dilutive shares, approximately 6,955,000 and 1,130,000
for the years ended December 31, 2007 and 2006, respectively, have been excluded
from diluted loss per share,  as their  effect  would be  anti-dilutive  for the
periods then ended.

Beneficial Conversion Feature

The  convertible  features of certain  convertible  notes  provide for a rate of
conversion  that  is  below  market  value  (see  Note  7).  Such  features  are
characterized as a "beneficial conversion feature" ("BCF"). Pursuant to EITF No.
98-5 Accounting For Convertible  Securities with Beneficial  Conversion Features
or Contingently  Adjustable  Conversion Ratio and EITF No.  00-27,Application of

                                      F-9

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------------------------------
(Continued)
-----------

EITF Issue No. 98-5 To Certain Convertible Instruments,  the relative fair value
of the BCF  has  been  recorded  as a  discount  from  the  face  amount  of the
respective  debt  instrument.  The Company is amortizing  the discount using the
effective  interest  method  through  maturity of such  instrument.  The Company
records  the  corresponding  unamortized  debt  discount  related  to the BCF as
interest  expense when the related  instrument  is converted  into the Company's
common stock.

Advertising

The Company expenses all advertising  costs as incurred.  Advertising costs were
$1,330 and $0 for the years ended December 31, 2007 and 2006, respectively.

Reverse Spin-Off

SBG formed STN in February 2006 as a wholly-owned subsidiary.  On such date, SBG
transferred all of its assets and substantially all liabilities, obligations and
contracts of SBG were assumed by STN. Since the transfer, STN continued to focus
on operating the business previously operated by SBG.

The Company  accounted for the  transaction as a reverse  spin-off in accordance
with the EITF 02-11,  "Accounting For Reverse Spin-offs." In a reverse spin-off,
the legal spinnee (STN) is treated as though it were the spinnor for  accounting
purposes.  Reverse  spin-off  accounting is  appropriate as the treatment of the
legal spinnee as the accounting  spinnor results in the most accurate  depiction
of the  substance of the  transaction  for  shareholders  and other users of the
financials statements. Under this treatment, the historical financial statements
of the Company are the  historical  financial  statements  of STN. In making its
determination, the Company considered the following indicators, among others:

     o    the  accounting  spinnor  (legal  spinnee,  STN) is  larger  than  the
          accounting spinnee (legal spinnor, SBG);

     o    the fair value of the accounting  spinnor  (legal  spinnee) is greater
          than that of the accounting spinnee (legal spinnor);

     o    the accounting  spinnor (legal spinnee) retains the senior  management
          of the formerly combined entity;

     o    and the accounting spinnor (legal spinnee) retains senior management.


New Accounting Pronouncements

In June 2006, the FASB issued  Interpretation  ("FIN") No. 48,  "Accounting  for
Uncertainty in Income Taxes--an  interpretation of FASB Statement No. 109." This
Interpretation  prescribes a recognition threshold and measurement attribute for
the financial  statement  recognition and measurement of a tax position taken or
expected to be taken in a tax return,  and provides  guidance on  derecognition,
classification,   interest  and  penalties,   accounting  in  interim   periods,
disclosure,  and transition.  This  Interpretation is effective for fiscal years
beginning  after December 15, 2006. We believe that FIN No. 48 should not have a
material impact on our financial position or results of operations.

In  September  2006,  the FASB issued SFAS No.  157,  "Fair Value  Measurements"
("SFAS No. 157").  SFAS No. 157 defines fair value,  establishes a framework for
measuring fair value in generally accepted accounting  principles ("GAAP"),  and
expands disclosures about fair value measurements.  This statement applies under
other accounting  pronouncements  that require or permit fair value  measurement
where the FASB has previously  determined that under those  pronouncements  fair
value is the  appropriate  measurement.  This statement does not require any new
fair value  measurements but may require  companies to change current  practice.
This statement is effective for those fiscal years  beginning after November 15,
2007 and to the interim  periods within those fiscal years. We believe that SFAS
No. 157 should not have a material  impact on our financial  position or results
of operations

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial Assets and Financial  Liabilities (SFAS No. 159). SFAS No. 159 permits
entities to choose to measure,  on an item-by-item  basis,  specified  financial
instruments and certain other items at fair value.  Unrealized  gains and losses
on items for which the fair value  option has been  elected  are  required to be
reported in earnings  at each  reporting  date.  SFAS No. 159 is  effective  for
fiscal years  beginning  after  November 15, 2007,  the  provisions of which are
required to be applied prospectively. We believe that SFAS 159 should not have a
material impact on our financial position or results of operations

 In  December  2007,  the FASB  issued  SFAS No. 141  (Revised  2007),  Business
Combinations,  or SFAS No. 141R.  SFAS No. 141R will change the  accounting  for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
first  annual  reporting  period  beginning  on  or  after  December  15,  2008.
Accordingly,  any  business  combinations  we  engage  in will be  recorded  and
disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R
will have an impact on accounting for business combinations once adopted but the
effect is dependent upon  acquisitions  at that time. We are still assessing the
impact of this pronouncement.

In December  2007,  the FASB issued SFAS No. 160,  "Noncontrolling  Interests in
Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No. 160".
SFAS  No.  160  establishes  new  accounting  and  reporting  standards  for the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary.  SFAS No. 160 is effective  for fiscal  years  beginning on or after
December 15, 2008. We believe that SFAS 160 should not have a material impact on
our financial position or results of operations.


                                      F-10

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 2 - ACQUISITIONS
---------------------

Effective  April 1, 2006, the Company  purchased  certain assets and subscribers
from a bank in Colorado  (the "April 2006  Acquisition").  The assets  include a
wireless cable TV license located in southeast Colorado.

The Company  purchased the assets with a note payable in the amount of $150,000.
The note  accrues  interest at a rate of 12% per annum.  In February  2008,  the
Company repaid all interest and extended the note for another year.

The acquisition has been accounted for using the purchase method of accounting.

The following represents an allocation of the purchase price over the historical
net book value of the acquired assets and license (which approximate fair value)
as of April 1, 2006, the acquisition date:


         Property and equipment                        $ 49,400
         FCC License                                    100,600
                                                      ----------
                                                        $150,000
                                                      ==========

Effective February 1, 2007, the Company purchased certain assets and subscribers
from a cable TV company  located  in  southeast  Colorado  (the  "February  2007
Acquisition").  The assets  include 12 systems  offering cable TV and high speed
services in certain locations.

The  Company  purchased  the assets  through the  issuance of 368,572  shares of
restricted  common stock valued at $146,200 based on the estimated fair value on
the measurement  date. The acquisition has been accounted for using the purchase
method of accounting.

The following represents an allocation of the purchase price over the historical
net book value of the acquired  assets as of February 1, 2007,  the  acquisition
date:

         Property and equipment                        $46,200
         Subscriber list                               100,000
                                                     ---------
                                                      $146,200
                                                     =========

As discussed in Note 1,  effective  June 30, 2007,  NexHorizon  entered into the
Merger with STN. Pursuant to the Merger, all of the outstanding common shares of
STN were exchanged into 2,666,667 shares of NexHorizon common stock. The Company
recorded the Merger as a "reverse  Merger"  whereby STN was considered to be the
accounting  acquirer and retained control of the Company after the Merger.  As a
result,  the transaction was recorded as an issuance of 11,200,035 shares by STN
to acquire NexHorizon.

The following represents an allocation of the purchase price over the historical
net book value of the acquired  assets and  liabilities of NexHorizon as of June
30, 2007, the effective date of the Acquisition:




  Cash                                                  $          27,398
  Prepaid expenses and other current assets                        56,913
  Property and equipment, net                                     147,450
  Other assets                                                      2,925
  Accounts payable and accrued expenses                          (619,724)
  Notes payable                                                  (132,762)
                                                    ----------------------
     Net tangible liabilities assumed                            (517,800)
  Goodwill                                                      1,200,000
                                                    ----------------------
                                                         $        682,200
                                                    ======================


                                      F-11

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)


NOTE 3 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
--------------------------------------------------------------

During the year ended December 2007, the Company  determined  that the manner in
which it recognized the spin-off from SBG was not in accordance with EITF 02-11,
"Accounting  for Reverse  Spin-offs."  Based on the  Company's  analysis of EITF
02-11,  it deems that  reverse  spin-off  accounting  to be  appropriate  as the
treatment  results  in the  most  accurate  depiction  of the  substance  of the
transaction.  Accordingly,  the Company has  restated its  historical  financial
statements.

The  following  tables  present  a summary  of the  effects  of the  restatement
adjustments on the Company's consolidated balance sheet at December 31, 2006 and
the  consolidated  statements  of  operations  and cash  flows for the year then
ended:


<TABLE>
<CAPTION>

                                                As previously
                                                     reported         Adjustments                 Restated
                                        ---------------------------------------------   ----------------------
<S>                                            <C>                <C>                       <C>
        Assets                                 $      947,275      $    (799,166)            $     148,109
        Current liabilities                         2,303,233                 (1)                2,303,232
        Preferred stock                                     -                   -                        -
        Common stock                                        -                 267                      267
        Additional paid in capital                          -           6,466,040                6,466,040
        Accumulated deficit                    $  (1,355,958)      $  (7,265,472)            $ (8,621,430)



        Consolidated statement of operations for the year ended
           December 31, 2006:

                                                As previously
                                                     reported         Adjustments                 Restated
                                        ---------------------------------------------   ---------------------


        Revenues                               $     29,842                     -              $    29,842
        Gross profit                                                          (1)
        Operating expenses                      (1,222,404)              (98,091)              (1,320,495)
        Loss on settlement                                -           (1,078,975)              (1,078,975)
        Interest expense                          (139,149)             (261,396)                (400,545)
        Net loss                             $  (1,355,958)         $ (1,438,463)            $ (2,794,421)

        Basic and diluted net loss           $  (1,355,958)        $ 1,355,956.95              $    (1.05)
</TABLE>


                                      F-12

<PAGE>

<TABLE>
<CAPTION>


                                 NEXHORIZON COMMUNICATIONS, INC.
                              (formerly Y-Tel International, Inc.)

                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 3 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Continued)

Consolidated statement of cash flows for the year ended December 31, 2006:

                                                                                       As previously
                                                                                       Reported               As Restated
                                                                                    ------------------    ------------------
<S>                                                                               <C>                   <C>
Cash flows from operating activities

Net loss                                                                          $      (1,355,958)    $      (2,794,421)
Adjustment to reconcile net loss to cash used in operating activities :
    Depreciation and amortization                                                             36,381                20,198
    Bad debt                                                                                  75,360                     -
    Amortization of debt discount and issuance cost                                                -               158,651
    Loss on settlement of liabilities                                                              -             1,078,975
    Loss on disposal of property and equipment                                               (4,370)                 5,473
      Changes in assets and liabilities:
           Accounts receivable                                                               (1,471)               (1,470)
           Prepaid expenses and other assets                                                (22,700)               (1,970)
           Other assets                                                                          160                 (160)
           Accounts payable and accrued expenses                                             799,736               770,248
           Accrued expenses and interest                                                     172,595                 5,141
                                                                                    ------------------    ------------------
Net cash used in operating activities                                                      (300,267)             (759,335)
                                                                                    ------------------    ------------------

Cash flows from investing activities :

Purchase of property and equipment                                                           (3,114)               (3,309)
Cash acquired in SBG transfer                                                                 4,267                     -
                                                                                    ------------------    ------------------
Net cash provided by (used in) investing activities                                           1,153                (3,309)
                                                                                    ------------------    ------------------

Cash flows from financing activities :

Capital contributions                                                                              -               137,500
Line of credit                                                                                25,000                     -
Cash advances from SBG                                                                       274,500                     -
Proceeds from the issuance of notes payable                                                        -               625,082
                                                                                    ------------------    ------------------
Net cash provided by financing activities                                                    299,500               762,582
                                                                                    ------------------    ------------------

Net increase (decrease) in cash                                                                  386                  (61)

Cash at beginning of year                                                                          -                   448
                                                                                    ------------------    ------------------

Cash at end of year                                                               $              386    $              387
                                                                                    ==================    ==================

</TABLE>

                                      F-13

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)


NOTE 4 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consists of the following at December 31:


                                                   2007                 2006
                                                   ----                 ----

Equipment                                  $      437,675        $       65,502

Less accumulated depreciation                     (76,203)              (17,453)
                                            -------------         -------------

Fixed assets, net                          $      361,472        $       48,049
                                            =============         =============



Depreciation expense for property and equipment for the years ended December 31,
2007 and 2006 was $58,750 and $12,744, respectively.


NOTE 5 - INTANGIBLES
--------------------

         Intangible assets consist of the following as of December 31, 2007:

<TABLE>
<CAPTION>

                                            Estimated
                                 Date       Useful             Gross
                                              Life           Carrying      Accumulated   Net Carrying
                               Acquired      (Years)          Amount      Amortization      Amount
                             ---------------------------   ---------------------------------------------
<S>                          <C>           <C>           <C>              <C>            <C>

    FCC License                 4/1/06         10        $
                                                                100,600    $    (17,605)  $    82,995
    Customer List               2/1/07
                                                                100,000               -        100,000
                                                           ---------------------------------------------

           Total intangible                             $
                assets, net                                     200,600    $    (17,605)  $   182,995
                                                           =============================================
</TABLE>


         Amortization of intangible  assets was $10,060 and $7,545 for the years
ended December 31, 2007 and 2006, respectively.

         The  estimated  amortization  expense  for the  next  five  years is as
follows:

                        Years Ending
                        December 31,
                ------------------------------------------------

                                2008       $        10,060
                                2009                10,060
                                2010                10,060
                                2011                10,060
                                2012                10,060



                                      F-14

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 6 - RELATED PARTY TRANSACTIONS


During the year ended December 31, 2007, the Company  entered into the following
related party transactions:

o        Issued an aggregate of $40,000 in notes payable  ranging from 12% - 18%
         to a director  of the  Company.  The notes  included  the  issuance  of
         148,527  warrants  ranging from $0.40 - $0.75 per warrant ranging three
         to five years. On December 31, 2007, the note and accrued  interest was
         converted to a new  three-year  convertible  promissory  note.  The new
         balance is $44,850  bears  interest  at $10%.  The note  holder has the
         option of  converting  the entire note plus  interest  into  restricted
         common stock at the  conversion  price of $0.20 per share.  If the note
         holder  converts  the note to  restricted  common  stock  then the note
         holder will also receive an equal number of warrants as to shares,  50%
         at $0.40 and 50% at $0.75 per warrant.  The  warrants  expire two years
         from the date of converting this note to stock.

o        The Company  issued a note payable in the amount of $10,000 to a member
         of its management for cash received.  The note accrued interest at 10%,
         matured in December 2007 and is currently in default.

o        The  Company  issued a note  payable  to a  director  in the  amount of
         $15,000 for cash received. The note accrues interest at 10%, matured in
         December 2007 and is currently in default.

o        The  Company  assumed a  convertible  note  payable to a relative  of a
         member of the Company's  management in the amount of $50,000.  The note
         payable was convertible  into shares of the  Company's  common stock at
         $0.17 per share,  matured in October 2007 and was converted in December
         2007.  In  addition,  the  holder of the note was  issued a warrant  to
         purchase  23,529 shares of the Company's  common stock at $0.17,  which
         was exercised in January 2007.


During the year ended December 31, 2006, the Company  entered into the following
related party transactions:

    o     Prior to the Reverse  Merger,  as described  in Note 2, the  Company's
          parent,  SBG,  settled  certain of the Company's  liabilities  through
          capital  contributions  by issuing SBG's common  stock,  as summarized
          below:

    o     SBG issued  shares of its  common  stock for cash  totaling  $137,500,
          which was contributed to the Company for working capital purposes.

    o     SBG issued  shares of its common stock in  satisfaction  of certain of
          the Company's accounts payable and accrued expenses totaling $350,366.

    o     SBG  issued  shares of its  common  stock in  satisfaction  of accrued
          compensation totaling $397,784.

    o     The  estimated  fair value of SBG's  common  stock on the  measurement
          dates of the satisfaction of the Company's  accounts payable,  accrued
          expenses and accrued compensation was in excess of the carrying amount
          of the liabilities by the Company. Accordingly, the Company recorded a
          loss on settlement of $1,078,975.

    o     SBG issued shares of its common stock in satisfaction of certain notes
          payable and accrued interest in the amount of $514,432.


                                      F-15

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 7 - DEBT
-------------

<TABLE>
<CAPTION>

Notes payable consist of the following at December 31, 2007 and 2006 (restated):

                                                                                          2007              2006
                                                                                          ----              ----
<S>                                                                                     <C>             <C>

Note payable to finance company,  due in six quarterly  payments in common stock
of principal of approximately  $153,000  beginning  September 2007 (based on the
average  closing price of the Company's  common stock prior to the payment date,
but no higher than $1.00 per share or less than $0.10 per share)  plus  interest
at 10%.  For the year ended  December  31, 2007,  the Company  issued  1,725,517
shares.                                                                                 $  595,000      $   737,500

Bridge loan financing,  bearing interest at 12%,  convertible at $0.18 per share
with 125,000 warrants  exercisable at $0.198 through October 2012. In connection
with this bridge  loan,  the  Company  issued  694,554  "fee  shares"  valued at
$131,965 that have been  recorded as debt  issuance  costs and will be amortized
through the maturity of the loan ($54,986 at December 31, 2007),  which is April
19, 2008. In addition, the bridge loan contained a put feature that required the
Company to repurchase  the fee shares if the stock price dropped below $0.12 per
share at the  conclusion of the first 90-day after the closing  date.  Reflected
net of  unamortized  debt discount of $31,675 at December 31, 2007. The loan was
repaid in February 2008 without the put feature becoming a factor.                         205,825                -

Note  payable  from April 2006  acquisition  (see Note 2),  interest at 12%, due
February 2009.                                                                             150,000          150,000

Notes  payable to various  lenders,  interest at 10%,  convertible  at $0.20 per
share,  due December 2010  (includes  $115,885 of accrued  interest added to the
principal  balance as part of a refinancing in December 2007).  Upon conversion,
the lenders will receive warrants equal to the number of shares  converted,  50%
of  which  will be  exercisable  at $0.40  per  share  and 50% of which  will be
exercisable at $0.75 per share for two years from the date of issuance.                    325,885          210,000

Note payable for consulting  services,  interest at 7%, convertible at $0.08 per
share, due in February 2008.                                                               123,000                -

Notes  payable  assumed  in  June  2007   acquisition  to  a  finance   company,
collateralized  by  automobiles,  bearing  interest at rates  ranging from 0% to
2.9%,  principal and interest due in monthly  installments  ranging from $472 to
$532 through May 2012.                                                                      51,952                -

Note payable to individual,  due January 2008,  interest at 20%,  convertible at
$0.10 per share.                                                                            50,000                -

Other, net of unamortized debt discount of $10,068                                         128,537           89,150
                                                                                        -----------    -------------
                                                                                         1,630,199        1,236,650
Less current portion                                                                      (472,512)      (1,236,650)
                                                                                        -----------    -------------
                                                                                        $1,157,687      $         -
                                                                                        -----------    -------------
</TABLE>

                                      F-16

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 7 - DEBT (Continued)
-------------------------

At December 31, 2007, required annual principal payments on notes payable are as
follows:

         Fiscal Years Ending
            December 31,
     ----------------------------

                2008                                  $        514,255
                2009                                           160,000
                2010                                           380,735
                2011                                            10,000
                2012                                            11,952
                Non-cash                                       595,000
                                                       ---------------

                Total                                 $      1,671,942
                                                       ===============


During the year  ended  December  31,  2007,  the  Company  recorded  total debt
discounts relating to effective  beneficial  conversion  features and detachable
warrants  (totaling  715,000  shares) of  $198,693,  of which  $156,950 has been
recorded to interest expense through December 31, 2007. In addition, the Company
amortized an additional  $12,721 related to debt discounts on assumed notes, all
of which were fully amortized at December 31, 2007.


NOTE 8 - STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------

Common Stock

During 2007, the Company issued  11,200,035 shares of restricted common stock in
connection  to the Merger (see Note 2). The  estimated  fair value of the shares
was $682,200 (based on the related measurement date).

During 2007, the Company  issued  260,000 shares of restricted  common stock for
cash totaling $52,000.

During 2007, the Company  issued  694,554  shares of restricted  common stock in
connection with the issuance of a note payable.  The estimated fair value of the
shares was $131,965 (based on the related  measurement date), which was recorded
as debt issuance  costs in the  accompanying  consolidated  balance sheet and is
being amortized over the life of the related debt instrument (see Note 7).

During 2007, the Company  issued  692,691  shares of restricted  common stock to
consultants in connection  with services  provided.  The estimated fair value of
the shares was  $148,672  (based on the related  measurement  dates),  which was
expensed in the accompanying statement of operations.

During 2007,  the Company  issued an  aggregate of 520,863  shares of its common
stock in connection with the conversion of accounts payable and accrued expenses
totaling $119,552. The shares of common stock were issued at an average price of
$0.23, which represented the estimated fair value on the respective  measurement
dates.

During 2007, the Company  issued an aggregate of 2,411,074  shares of its common
stock as compensation  to certain of its employees.  The estimated fair value of
the shares was  $411,083  (based on the related  measurement  dates),  which was
expensed in the accompanying statement of operations.

During 2007, the Company  issued an aggregate of 2,895,534  shares of its common
stock in connection  with the conversion of $538,604 of notes payable  principal
and accrued interest.

                                      F-17

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 8 - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
---------------------------------------------------

Stock Options
-------------

In June 2007,  the Company  adopted  the  existing  2001 Stock  Option Plan (the
"Plan").  The Plan has reserved  3,500,000  shares of common stock,  as amended.
Under  provisions  of the  Plan,  the  exercise  price of the  options  shall be
determined by the Board of Directors at the time of grant.  The exercise  period
shall be no more than 10 years and the awards will vest over a period of time to
be determined by the Board of Directors.

In January 2007, the Board of Directors approved the 2007 Stock Option Plan (the
"2007 Plan").  The Plan has reserved  1,100,000  shares of the Company's  common
stock, as amended.  Under provisions of the 2007 Plan, the exercise price of the
options  issued under the Plan shall be  determined by the Board of Directors at
the time of grant.  The  exercise  period shall be no more than 10 years and the
awards  will  vest  over a  period  of time to be  determined  by the  Board  of
Directors  at the time of grant.  As of December 31, 2007 the Company has had no
grants under the 2007 Plan.

Stock  option  activity  for the years  ended  December  31, 2007 and 2006 is as
follows:

<TABLE>
<CAPTION>

                                                                                      Weighted Average
                                                                 Number                Exercise Price
                                                               of Options                Per Share
                                                           ------------------        -------------------
<S>                                                        <C>                       <C>

      Outstanding and exercisable at December 31,
      2006                                                                -                   $     -
         Assumed                                                    294,118                      4.68
         Granted                                                          -                         -
         Exercised                                                        -                         -
         Canceled                                                  (294,118)                    (4.68)
                                                           ------------------        -------------------
      Outstanding and exercisable at December 31,
      2007                                                                -                 $       -
                                                           ==================        ===================
</TABLE>


The  Black-Scholes  option  valuation method was developed for use in estimating
the fair value of traded  options  which have no  vesting  restrictions  and are
fully  transferable.  In addition,  option valuation models require the input of
highly  subjective  assumptions  including the expected stock price  volatility.
Because the Company's employee stock options have characteristics  significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

Warrants
--------

During the year ended December 31, 2007, the Company issued warrants to purchase
an  aggregate  of 715,000  shares of its  common  stock in  connection  with the
issuance of notes  payable  (see Note 7). In  addition,  the Company  assumed an
outstanding  warrant to purchase  372,058 shares of its common stock,  issued in
connection with previously issued notes payable.

In 2007, the Company issued  warrants to purchase an aggregate of 260,000 shares
of its common  stock in  connection  with an offering  memorandum.  The warrants
vested upon grant. The warrants include 130,000 three-year warrants  exercisable
at $0.40 and  130,000  five-year  warrants  exercisable  at $0.75 per share.  In
addition, in June 2007, the Company assumed warrants to purchase an aggregate of
595,000  shares of its  common  stock  issued  in  connection  with an  offering
memorandum,  including  297,500  three-year  warrants  exercisable  at $0.40 and
297,500 five-year warrants exercisable at $0.75 per share.

In June 2007, the Company  assumed  warrants to purchase an aggregate of 152,728
shares of its common stock. 147,058 of such warrants were exercisable from $0.17
- $0.20 per share and  expired in  December  2007.  The  additional  warrants to
purchase  5,670  shares  were  exercisable  at $34.00  per share and  expired in
January 2008.

                                      F-18

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)


NOTE 8 - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
---------------------------------------------------

The  following  represents a summary of the warrants  outstanding  for the years
ended December 31, 2007 and 2006:

<TABLE>
<CAPTION>


                                                                                       Weighted Average
                                                                      Number            Exercise Price
                                                                   of Warrants            Per Share
                                                                -------------------   -------------------
<S>                                                             <C>                   <C>

     Balance at December 31, 2006                                               -       $             -
       Assumed                                                          1,119,786                  0.66
       Granted                                                            975,000                  0.54
       Exercised                                                          (23,529)                (0.17)
       Expired/Forfeited                                                 (147,058)                (0.19)
                                                                -------------------   -------------------
     Balance at December 31, 2007                                       1,924,199       $          0.64
                                                                -------------------   -------------------
     Weighted average fair value of warrants granted:
              2007                                                $          0.18
                                                                -------------------
              2006                                                $          0.17
                                                                -------------------
</TABLE>



The following summarizes  information about warrants outstanding at December 31,
2007:

<TABLE>
<CAPTION>

                                                      Warrants Outstanding and Exercisable
                                 -----------------------------------------------------------------------------

                                                                     Weighted
                                                                      Average                 Weighted
                                                                     Remaining                 Average
           Exercise                    Number of                    Contractual               Exercise
             Price                       Shares                    Life (Years)                 Price
    ---------------------        --------------------          -------------------   -------------------------
<S>                              <C>                           <C>                   <C>

       $0.20 - $0.40                         693,529                    3.4                    $         0.35
       $0.40                                 480,000                    0.8                              0.40
       $0.75                                 745,000                    3.1                              0.75
       $34.00                                  5,670                   0.05                             34.00
                                 --------------------                                -------------------------
                                           1,924,199                                            $        0.64
                                 ====================                                =========================
</TABLE>



The fair value of each warrant  granted during 2007 and 2006 was estimated using
the Black-Scholes  option pricing model on the date of grant using the following
assumptions:  (i) no dividend yield,  (ii) average  volatility of 507% and 250%,
(iii)  weighted  average  risk-free  interest  rate of 4.5% and  5.0%,  and (iv)
average expected life of 1.2 and 2.1 years.

                                      F-19

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 9 - INCOME TAXES

At December 31, 2007 and 2006,  the Company had  approximately  $11,723,775  and
$8,621,430,  respectively of federal and state net operating loss carry forwards
for tax reporting  purposes  available to offset future taxable income;  federal
and state net operating loss carry forwards  expire through 2027.  Under the Tax
Reform  Act of 1986,  the  amounts of and  benefits  from net  operating  losses
carried  forward  may be impaired  or limited in certain  circumstances.  Events
which may cause  limitations  in the  amount of net  operating  losses  that the
Company  may  utilize  in any  one  year  include,  but are not  limited  to,  a
cumulative ownership change of more than 50 percent over a three-year period. At
December  31,  2007,  the effect of such  limitation,  if imposed,  has not been
determined.

Deferred tax assets  consist  primarily of the tax effect of net operating  loss
carry  forwards.  The Company has  provided a full  valuation  allowance  on the
deferred  tax  assets  because of the  uncertainty  regarding  reliability.  The
valuation allowance increased  approximately  $1,056,837 and $950,103 during the
years ended December 31, 2007 and 2006, respectively.

Deferred tax assets consist of the following at December 31:


                                                   2007             2006
                                                   ----             ----


   Net operating loss carry forwards         $   3,986,084     $    2,931,286
   Less valuation allowance                     (3,986,084)        (2,931,286)
                                              ------------       -------------

                                             $           -     $            -
                                              ============     ===============


A reconciliation  of income taxes computed at the federal  statutory rate of 34%
to the provision for income taxes is as follows for the years ended December 31,
2007 and 2006:

<TABLE>
<CAPTION>

                                                                2007                             2006
                                                        --------------------       --------------------------
<S>                                                     <C>                        <C>

     Computed benefit at federal statutory rate                     (34)%                            (34)%
     State income tax benefit, net of federal effect                 (7)%                             (7)%
     Impairment of goodwill                                          15%                                -
     Increase in valuation allowance                                 24%                              39%
     Other                                                            2%                               2%
                                                        ----------------               ------------------
                                                                      -                                -
                                                        ================               =================
</TABLE>

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Indemnities and Guarantees

The Company has made certain  indemnities and guarantees,  under which it may be
required to make payments to a guaranteed or indemnified  party,  in relation to
certain transactions. The Company indemnifies its directors, officers, employees
and  agents to the  maximum  extent  permitted  under the laws of the  States of
Florida and Delaware.  In connection with its facility  leases,  the Company has
indemnified  its  lessors  for  certain  claims  arising  from  the  use  of the
facilities.  In  connection  with  certain  of  its  stock  purchase  and  other
agreements,  the Company has  indemnified  lenders,  sellers,  and various other
parties for certain claims arising from the Company's breach of representations,
warranties and other provisions contained in the agreements. The duration of the
guarantees  and  indemnities  do not provide for any  limitation  of the maximum
potential future payments the Company could be obligated to make.  Historically,
the Company has not been  obligated to make any  payments for these  obligations
and no liabilities  have been recorded for these  indemnities  and guarantees in
the accompanying consolidated balance sheet.

                                      F-20

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)

NOTE 10 - COMMITMENTS AND CONTINGENCIES
---------------------------------------

Litigation
----------

From time to time,  the Company may be involved in various  claims,  lawsuits or
disputes  arising in the normal  operations of its business.  The Company is not
currently  involved in any such matters which  management  believes could have a
material  adverse  effect on the Company's  consolidated  financial  position or
consolidated results of operations.

Employment Agreements
---------------------

In October 2006,  employment  agreements with three officers were executed for a
three year term.  The future annual  minimum  payments  under the agreements are
approximately $250,000,  $225,000 and $200,000, with potential annual increases,
as defined.  In 2006 all three  officers  waived there  rights for  compensation
under the new employment contract. In 2007, all three officers' compensation was
paid with an aggregate of 2,411,074 shares of restricted common stock.

Consulting Agreements
---------------------

In June 2007, the Company  assumed a Consulting  Agreement for broker  relations
through  December  2008. The agreement is renewable and  cancellable  with sixty
(60) notice of  termination.  The fair value of such  services  was  recorded as
prepaid  services and is being amortized over the related term of the agreement.
During the year ended  December 31, 2007, the Company  amortized  $15,000 in the
accompanying consolidated statement of operation.

Operating Leases
----------------

As of December 31, 2007,  the Company  leases  facilities for its telecom hub in
Dallas,  Texas.  The lease  relates  to  cabinet  space for  housing  Voice over
Internet  Protocol  (VoIP")  equipment at a rate of $400 per month. The lease is
currently on a month to month basis.

As of  December  31,  2007,  the  Company  also  leases  facilities  located  in
Westminster,  Colorado. The lease relates to office space at the monthly rate of
$2,250 per month.  The lease expires in February  2008.  The Company has renewed
its lease with  additional  space for a two year period at the  monthly  rate of
$2,500.

The Company  also leases  space for its 13 head ends  located in  Colorado.  The
lease space holds the company's cable TV and high speed internet  equipment at a
monthly  rate ranging  from $25 - $350.  The leases are  currently on a month to
month basis.


NOTE 11 - SUBSEQUENT EVENTS (unaudited)
---------------------------------------

In the first quarter of 2008,  the Company  executed a three-year  debenture for
approximately $1,760,000. The debenture is repaid as interest only for the first
six months with  principle  and interest  during the remaining  months.  Monthly
interest is paid at the higher of 11.5% or prime plus 4%.

On January 1, 2008,  the Company  acquired  two cable  companies  ("Chula  Vista
Cable,  Ltd.  And  National  City Cable,  Inc.") both  located in the San Diego,
California  metropolitan  area.  The two  entities  combined  serve  over  3,400
subscribers offering cable TV and internet services.

The Company  purchased,  on the terms and conditions set forth in the Agreement,
substantially  all of the assets of Chula Vista Cable,  Ltd. In consideration of
the assets  acquired,  the Company paid to Chula Vista Cable,  Ltd.  $4,250,000,
paid in $637,500 in cash,  2,125,000  shares of Series A Preferred stock with an
estimated fair value of $2,125,000 and a convertible  note payable in the amount
of $1,487,500. The note requires quarterly interest payments at 6% and one final
payment of principal and any unpaid interest in January 2011.

The  Company  also  purchased,  on the  terms  and  conditions  set forth in the
Agreement,  100% of the Class A common  shares in National  City  Cable,  Inc. a
California  corporation,  free and  clear of all  liens,  claims,  options,  and
charges.  The Class A common  stock is the only class having  voting  rights and


                                      F-21

<PAGE>

                         NEXHORIZON COMMUNICATIONS, INC.
                      (formerly Y-Tel International, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            For The Years Ended December 31, 2007 and 2006 (Restated)


NOTE 11 - SUBSEQUENT EVENTS (unaudited) (Continued)
---------------------------------------------------

privileges.  In  consideration  of the Class A Common stock, the Company paid to
the  shareholders an aggregate of $750,000,  of which $112,500 was paid in cash,
the Company issued 375,000 shares of Series A Preferred  stock with an estimated
fair value of $375,000 and a convertible note payable in the amount of $262,500.
The note  requires  quarterly  interest  payments at 6% and one final payment of
principal and any unpaid interest in January 2011.

On October 19, 2007, the Company executed a six month Secured Promissory Note in
the amount of  $237,500.  In  February  2008,  the  Company  repaid its  Secured
Promissory Note from the proceeds of the three year Debenture  referenced above.
In connection  with the repayment,  the Company issued  1,249,891  shares of its
restricted common stock for cancellation of the warrants and the put feature.

During the three months ended March 31, 2008, the Company issued an aggregate of
958,804 shares of its restricted common stock for consulting services. The terms
of the consulting agreements range from three months to twelve months.






























                                      F-22

<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        NEXHORIZON COMMUNICATIONS, INC.

Date:  April 15, 2008                   By: /s/ Calvin D. Smiley, Sr.
                                            -------------------------
                                             Calvin D. Smiley, President
                                             and Chief Executive Officer

Date:  April 15, 2008                   By: /s/ Daniel M. Smith
                                            -------------------
                                             Daniel M. Smith, Chief Financial
                                             fficer and Executive Vice President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


Date:  April 15, 2008                By: / s/ Calvin D. Smiley, Sr.
                                         --------------------------
                                          Calvin D. Smiley, President,
                                          Chief Executive Officer and Director

Date:  April 15, 2008                By: /s/ Daniel M. Smith
                                         -------------------
                                          Daniel M. Smith, Chief Financial
                                          Officer, Executive Vice President
                                          and Director



Date:  April 15, 2008                By: /s/ John T. Conroy
                                         ---------------------------------------
                                          John T. Conroy, Director



Date:  April 15, 2008                By: /s/Gregory J. Liptak
                                         ---------------------------------------
                                          Gregory J. Liptak, Director