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, 2006

|_|  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:  $91,211

         As of the close of trading  on March 30,  2007,  there were  11,169,948
common shares outstanding,  6,762,878 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 30, 2007, was approximately $0.22.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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

<PAGE>


                                TABLE OF CONTENTS

                                                                          Page #

PART I

Item 1. Description of Business.                                               4
Item 2. Description of Property.                                              12
Item 3. Legal Proceedings.                                                    12
Item 4. Submission of Matters to a Vote of Security Holders.                  12

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.             13
Item 6. Management's Discussion and Analysis or Plan of Operation.            15
Item 7. Financial Statements.                                                 18
Item 8. Changes In and Disagreements With Accountants on Accounting
        and Financial Disclosure.                                             18
Item 8A. Controls and Procedures.                                             18
Item 8A(T). Controls and Procedures.                                          18
Item 8B. Other Information.                                                   19

PART II

Item 9.  Directors, Executive Officers, Promoters, Control Persons
         and Corporate Governance; Compliance With Section 16(a)
         of the Exchange Act.                                                 19
Item 10. Executive Compensation.                                              21
Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters.                          25
Item 12. Certain Relationship and Related Transactions, and
         Director Independence.                                               25
Item 13. Exhibits.                                                            26
Item 14. Principal Accountant Fees and Services.                              27

SIGNATURES                                                                    28



This annual report  contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934, as amended.  These statements relate to future
events or our future  financial  performance.  In some cases,  you can  identify
forward-looking  statements  by  terminology  such as "may,"  "will,"  "should,"
"expects,"  "plans,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential,"  or "continue," or the negative of these terms or other  comparable
terminology.  These  statements are only  predictions  and may involve known and
unknown  risks,  uncertainties  and other  factors,  including  the risks in the
section  entitled "Risk  Factors,"  that may cause our or our industry's  actual
results,  level  of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements expressed or implied by these forward-looking statements.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance or  achievements.  Except as required by applicable  law,
including the securities  laws of the United States,  we do not intend to update
any of the  forward-looking  statements  to conform  these  statements to actual
results



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<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Development of the Business

Consolidated  Pictures Corp, ("CPC") was incorporated in Delaware on January 16,
2001.  On October  13,  2004,  CPC  acquired  all of the issued and  outstanding
capital stock of Y-Tel  International,  LLC  ("Y-Tel") in a reverse  acquisition
transaction.  On December 26, 2004, CPC changed its name to Y-Tel International,
LLC. On January 29, 2007,  Y-Tel 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.  In 2005,  the Company
developed its own Voice over Internet Protocol ("VoIP") network and migrated its
customers  from  the  older  DMS  platform  to the new VoIP  infrastructure.  In
December  2005, the Company sold off its DMS equipment for a combination of cash
and debt relief.

On October 17,  2006,  the Company  entered  into an agreement of Plan of Merger
(the "Merger") with Sunrise Television Network,  Inc., ("STN").  Pursuant to the
Merger,  all of the  outstanding  shares of STN's common stock will be exchanged
into 400,000 shares of the Company's  Series B preferred stock. The Series B are
being held in escrow to be issued to the shareholders of record of STN on a date
subsequent to audit completion, estimated to be 10 days and will be disbursed to
such shareholders effective upon the satisfaction of all closing conditions. The
Series B shares of preferred  stock are  convertible  into  2,666,667  shares of
common stock, as amended.

Immediately after executing the Merger, the officers of the Company resigned and
the former management of STN accepted the new positions.

Subsequent  to  entering  into the Merger and prior to the closing of the Merger
(which is  expected  in the  second  quarter  of 2007),  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.  As a result,  the
Company anticipates  recording the Merger as a "reverse acquisition" whereby STN
will be considered to be the accounting  acquirer as it retained  control of the
Company after the Merger.

The  closing of the Merger is subject to the  delivery of audits for STN and its
subsidiary.  The related  audits were not completed at December 31, 2006,  which
precluded the related  acquisition from being recorded for accounting  purposes.
The Company  expects the audits to be completed and to record the transaction in
the second quarter of 2007.

In January 2007, the Company changed its name to NexHorizon Communications, Inc.
and  affected a one for eight and  one-half  reverse  stock  split of its common
stock  and a one for four and  one-half  reverse  stock  split of its  preferred
stocks. The financial  statements presented herein have been restated to reflect
the reverse  stock split as if it had  occurred at the  beginning of each period
presented.

In connection with the pending acquisition, the Company has changed its business
objective from being a telecommunication  carrier to a cable television services
provider.  In addition,  the Company seeks to identify a series of strategically
targeted rural cable systems and networks for acquisition.  The Company hopes to


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<PAGE>

expand its basic cable TV services to include Digital,  Video on Demand ("VoD"),
Pay per View,  High Speed,  and  Telephone  through  either its  existing  cable
network or WiFi ("Wireless  Fidelity") last mile  strategies.  Management of the
Company believes that this will result in increased  reliability and capability,
growing revenue and profit while decreasing expenses.

Description

The Company changed is 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  believes  that this will  result in
increased  reliability  and  capability for the end users,  growing  revenue and
profit while decreasing expenses of the Company.

Upon consummation of the cable system acquisition, and future acquisitions,  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 reasonable
costs 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:

     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.


                                       5
<PAGE>

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 2006.  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.

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.

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.


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<PAGE>

Risk Factors

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

We  have  recently  restructured  and  have  no  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 THE COMPANYS'  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.

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

The accompanying  consolidated  financial statements have been prepared assuming
that  we  will  continue  as a  going  concern.  Conditions  exist  which  raise
substantial doubt about our ability to continue the Company's business unless we
are able to generate sufficient cash flows to meet the Company's 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 by the Company,  or that if available,
it will be on terms  favorable  or  acceptable  by the  Company.  Our  financial
statements do not include any  adjustment  that might result from the outcome of
this  uncertainty.  This  may be an  indicator  of the  Company's  inability  to
continue in business which could cause loss of investment.

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

The Company has current liabilities  approximating $850,000 in current assets as
of December 31, 2006. The Company has a working capital deficit of approximately
$(773,000) as of December 31, 2006. These  liabilities  include accounts payable
of  approximately  $682,000 as of December 31, 2006. In the event that creditors
or litigants,  if 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.

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

The expansion and development of the Company's business will require significant
additional capital. The Company intends to seek substantial additional financing
in  the  future  to  fund  the  growth  of  operations,  including  funding  the
significant capital expenditures necessary for the Company to provide service in
targeted markets.  The Company 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 the Company's  ability to secure  additional
financing.  If we are unable to obtain  additional  capital or are  required  to


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obtain it on terms less  satisfactory,  then 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, the Company's
cash flow from  operations has been  insufficient  to cover expenses and capital
needs.  The  Company's  current  capital  resources  have been  expended and the
Company needs additional  capital to continue  expansion,  which the Company may
not be able to  obtain,  and which  failure  to obtain  could  impair or curtail
operations.

THE COMPANY 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 the  Company  expects to 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 The Company's
business.

If any of the Company's key personnel  ceases to participate in our business and
operations,   our   profitability   could  suffer.   The  Company's  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.

THE COMPANY 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 depends 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. The Company does 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 the Company  uses,  business,  financial  condition and results of
operations could be materially adversely affected.  If the Company was 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.

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

The  Company's  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

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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.

The Company's  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 THE
COMPANY'S 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 headend 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.  The  Company  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 the Company's business,  financial condition and results of operations
by increasing the Company's 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.

The Company Is Subject to Regulation by Federal, State and Local Governments.

The  federal,  state  and  local  governments  extensively  regulate  the  cable
communications  industry.  The Company expects 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.  The Company
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 renew or transfer,  which  concessions or other  commitments  could
materially  adversely  impact our financial  condition and result of operations.
The Company  will also be  regulated  by the Federal  Communications  Commission
("FCC"),   or   FCC,   and   state   public   utilities   commissions   or  PUC.
Telecommunications companies, including companies 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


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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.

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

The  Company  are  subject  to  federal,  state,  local and  foreign  laws,  and
regulations  regarding protection of the environment,  including air, water, and
soil. The Company 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. The Company must comply with certain requirements for
the use, management, handling, and disposal of these materials. The Company does
not maintain  insurance  for  pollutant  cleanup and removal.  If the Company is
found responsible for any hazardous  contamination,  the Company may have to pay
expensive fines or penalties or perform costly clean-up. Even if the Company are
charged,  and later found not responsible,  for such  contamination or clean up,
the cost of defending the charges could be high.

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

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

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

Currently  only a very limited  trading  market exists for the Company's  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 the  Company's  stock or other person that
buys or sells our stock could have a significant influence over its price at any
given time.  The Company  cannot assure its  shareholders  that a market for the
Company's  common  stock  will be  sustained.  There  is no  assurance  that the
Company's  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

The Company's  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 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

                                       10
<PAGE>

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 the Company's  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 the  securities of the Company may  constitute  "penny
stocks"  within the  meaning of the rules,  the rules would apply to the Company
and to its  securities.  The rules may  further  affect the ability of owners of
shares to sell the  securities  of the Company 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. The Company's management is aware of the abuses that
have occurred historically in the penny stock market.  Although the Company does
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 the Company's securities.

THE COMPANY WILL NOT PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

The Company has 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.


                                       11
<PAGE>

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.

Item 2.  Description of Property.

As of December 31, 2006,  the Company  leases  facilities for its telecom hub in
Dallas,  Texas.  The lease  relates to cabinet  space for  housing  the  Nextone
Softswitching equipment at a rate of $400 per month. The lease is 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 $15,000 related to
            the  Company's  failure to complete an  acquisition.  Such amount is
            included in accrued expenses.

            - The Company is  currently  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.

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

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

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

There were no meetings of the security holders during the period covered by this
report.

In  December  2006,  shareholders  holding  a  Series  A Super  Majority  Voting
Preferred Stock which allowed Series A shares to always vote equal to a majority
of the Company's total issued and outstanding  common shares adopt the following
resolutions  by written  consent in lieu of a meeting  pursuant to the  Delaware
Revised Statutes.

            - To  authorize  the Board of  Directors of the Company to cause the
Company to amend its Articles of Incorporation to change the Company's name from
Y-Tel  International,  Inc. to a name to be determined by the Board. The Company
amended  its  Articles  of  Incorporation  to  change  the  name  to  NexHorizon
Communications, Inc., effective January 29, 2007.

            - To authorize a reverse  split of the  Company's  common stock on a
basis of up to fifty for one,  that will require an  amendment to the  Company's
Articles of Incorporation.  The Company amended its Articles of Incorporation to
effect the reverse split of 1 for 8.5, effective January 29, 2007.



                                       12
<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 National  Association  of Securities  Dealers,
Inc.  (the "NASD").  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 NASD and reflect interdealer prices, without retail
mark-up,  mark-down  or  commission  and may not  necessarily  represent  actual
transactions.


                2005                        HIGH              LOW
                ----                        ----              ---
March 31, 2005                             $46.75            $8.50
June 30, 2005                               13.60              6.46
September 30, 2005                          13.60              9.35
December 31, 2005                           16.75              2.98

                2006                        HIGH              LOW
                ----                        ----              ---
March 31, 2006                             $6.48             $2.30
June 30, 2006                                2.47              0.43
September 30, 2006                           1.70              0.60
December 31, 2006                            1.02              0.17

On May 22, 2006,  the Company was dropped to the Pink Sheets from the OTC:BB due
to its failure to file all required SEC reports.  The Company was  reinstated to
the OTC:BB on June 7, 2006.

At December 31, 2006,  there were 305 holders of record of the Company's  stock,
respectively.  A  significant  number of shares were 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


                                       13
<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.

Sale of Unregistered Securities

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.

On October 17,  2006,  the Company  entered  into an agreement of Plan of Merger
(the "Merger") with Sunrise Television Network,  Inc., ("STN").  Pursuant to the
Merger,  all of the  outstanding  shares of STN's common stock will be exchanged
into 400,000 shares of the Company's  Series B preferred stock. The Series B are
being held in escrow to be issued to the shareholders of record of STN on a date
approximately ten days, from the completion of the STN audit.

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 a
related party.  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 expires in December 2007.

In October 2006,  the Company  settled  $191,400 of its amounts due to a related
party with the issuance of 1,098,913  restricted  common  shares at an estimated
fair value of $0.17 per share  (based on the fair  value of the common  stock at
the measurement date). As additional  consideration for converting such amounts,
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 non-cash  compensation in the  accompanying  consolidated
statement of operations during 2006.

In October 2006, the Company issued 294,118 shares of common stock in connection
with the performance of consulting services. The shares were valued at $0.17 per
share (based on the fair value of the common stock at the measurement  date) and
expensed during the year ended December 31, 2006.

In May 2006, the Company issued 194,118 shares of restricted common stock to two
of its board members for services  provided.  The shares were valued at $231,000
(based  on the fair  value of the  common  stock at the  measurement  date)  and
expensed during 2006.

During the  year-ended  December 31, 2006 the Company  issued  69,859  shares of
restricted common stock for cash totaling $33,755.

                                       14
<PAGE>

During the  year-ended  December 31, 2006,  the Company issued 143,084 shares of
common stock to consultants for $75,135 in connection with services. The Company
capitalized  $60,000 of such amount and  recorded it as prepaid  services in the
accompanying  balance  sheet.  Such amount will be amortized to expense over the
life of the related agreement; of which $1,250 was expensed in 2006.

Exemption  From  Registration  Claimed

The above issuance by the Company of its unregistered securities was made by the
Company in reliance upon Section 4(2) of the  Securities Act of 1933, as amended
(the "Act"). The entities/individuals that purchased the unregistered securities
were known to the  Company and its  management,  through  pre-existing  business
relationships.  The  entities/individuals  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 the  issuance.  The holder 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 under the Act in any further resale or disposition.

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, 2006 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

                                       15
<PAGE>

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.

Results of Operations - Year Ended December 31, 2006 Compared to Year Ended
December 31, 2005

Net Sales

Net sales were $91,211 for the year ended December 31, 2006 compared to $976,231
for the year ended  December 31, 2005.  This  represents a decrease of $885,020.
The  decrease  is  attributable  to the ceasing of  operations  under the former
business model.

Cost of Sales

Cost of sales were  $86,713 for the year ended  December  31,  2006  compared to
$352,144  for the year ended  December  31,  2005.  This  represents  a decrease
$265,431  or 75%.  The  decrease  is  attributed  to the  decline in traffic and
related  termination  expenses  and the ceasing of  operations  under the former
business model.

Operating Expenses

Operating expenses were $2,813,225 for the year ended December 31, 2006 compared
to $5,862,817 for the year ended December 31, 2005.  This  represents a decrease
of  $3,049,592  or 52% when  compared to expenses  for 2005.  Of this  decrease,
approximately   $2,251,196   is   non-cash   related  to  various   compensation
arrangements.

Operating  expenses also includes  Other G&A expenses of $227,304 and $1,197,512
for the years ended December 31, 2006 and 2005, respectively.  This represents a
decrease of $970,208 or 81% when  compared  to G&A  expenses  for 2005.  Of this
decrease,  the shut down off operations in the first quarter 2006 represents the
majority of the reduced cost from the previous year.

Liquidity and Capital Resources

The  Company had a net working  capital  deficit of $772,745 as of December  31,
2006.  Management  recognizes the Company must generate additional  resources to
enable it to continue  operations.  The Company  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,  the  Company  will have  sufficient  funds to execute  its
intended new business plan or generate positive operating results.

In October  2006,  the  Company  issued  144,444  Series C  preferred  Shares in
connection with the conversion of $204,443 of accounts payable.

During the year ended  December  31, 2006 the Company  issued  69,859  shares of
restricted common stock for cash totaling $33,755.

                                       16
<PAGE>

In  December  2006,  the  Company  issued  1,393,031  shares of common  stock in
connection  with the conversion of accounts  payable,  notes payable and accrued
interest in the aggregate amount of $241,400.

In the first  quarter of 2007 the Company  settled  $7,832 of accounts  payables
with the  issuance of 29,612  restricted  common  shares at an average  price of
$0.26 per share.

In April 2007,  the  Company  prepared  an  Offering  Memorandum  to raise up to
$1,000,000. The Company is offering units at $2,000 for 10,000 restricted common
shares  ($0.20  per share)  plus Class A and Class B warrants  at $.40 and $.75,
respectively. At the time of this filing the Company has not sold any units.

Going Concern

The Company's independent  registered public accounting firm has stated in their
report included in this Form 10-KSB, that the Company incurred an operating loss
and had  negative  cash flows from  operations  for the year ended  December 31,
2006, and has a working capital deficit of $772,745 at December 31, 2006.  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 APB 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).

                                       17
<PAGE>

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-22 attached hereto.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.

None.

Item 8A. Controls and Procedures

EVALUATION OF INTERNAL AND DISCLOSURE CONTROLS

The  management of the Company has evaluated the  effectiveness  of the issuer's
disclosure  controls  and  procedures  as of the end of the period of the report
(evaluation  date) and have  concluded  that the  disclosure  controls  internal
controls and procedures are adequate and effective  based upon their  evaluation
as of the evaluation date.

There  were no changes  in the small  business  issuers  internal  control  over
financial  reporting  identified  in  connection  with  the  Company  evaluation
required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under  Exchange Act that
occurred  during the small  business  issuers  fourth  fiscal  quarter  that has
materially  affected or is  reasonable  likely to materially  affect,  the small
business issuers internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS

The  Company's  management,  including the CEO and CFO, does not expect that our
disclosure  controls  and  procedures  or our internal  control  over  financial
reporting will  necessarily  prevent all fraud and material  error.  An internal
control  system,  no matter how well  conceived and  operated,  can provide only
reasonable,  not absolute,  assurance  that the objectives of the control system
are met.  Further,  the design of the control  system must reflect that the fact

                                       18
<PAGE>

that there are  resource  constraints,  and the  benefits  of  controls  must be
considered  relative to their costs.  Because of the inherent  limitation in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues and instances of fraud,  if any, within the Company have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion of two or more  people,  or by  management
override of the internal  control.  The design of any system of controls also is
based in part upon certain assumption about the likelihood of future events, and
there can be no assurance  that any design will succeed in achieving  its stated
goals  under all  potential  future  conditions.  Over time,  control may become
inadequate  because of changes in  conditions,  and/or the degree of  compliance
with the policies or procedures may deteriorate.


Item 8B.  Other Information.

None.


                                     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.        54       Chief Executive Officer, President
                                             & Director
       Daniel M. Smith,             42       Chief Financial Officer, Executive
                                             Vice-President & Director
       John T. Conroy               50       EVP Strategic Development &
                                             Director
       Gregory J. Liptak            67       Director


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 - 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.

                                       19
<PAGE>

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 - 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
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.

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 to
its board members, but does provide transportation, lodging and reimbursement of
all reasonable expenses for 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.


                                       20
<PAGE>

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, 2006 there were no transactions by officers, directors or 10%
shareholders that required the filing of any Form 4.


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, 2006, 2005 and 2004.

<TABLE>
<CAPTION>

                                            Annual Compensation                       Long Term Compensation
                                                                            Awards                  Payouts
                                                                                    Securities
   Name & Principal     Year    Salary     Bonus      Other Annual    Restricted    Underlying      LTIP         All Other
       Position                  ($)        ($)       Compensation   Stock Awards   Options (#)    Payouts     Compensation
                                                          ($)             ($)                        ($)            ($)
<S>                     <C>   <C>          <C>           <C>             <C>           <C>          <C>
Calvin D. Smiley        2006  $    -0-     $ -0-         $ -0-           $ -0-          -0-         $ -0-          $ -0-
President & CEO(1)      2005  $    -0-     $ -0-         $ -0-           $ -0-          -0-         $ -0-          $ -0-
                        2004  $    -0-     $ -0-         $ -0-           $ -0-          -0-         $ -0-          $ -0-
Steve Lipman            2006  $    -0-     $ -0-         $ -0-           $ -0-          -0-         $ -0-          $ -0-
President & CEO(2)      2005  $ 132,000    $ -0-         $ -0-           $ -0-          -0-         $ -0-         $ 9,900
                        2004  $  36,000    $ -0-         $ -0-           $ -0-        58,824        $ -0-         $ 2,700
Daniel Smith, Chief     2006  $    -0-     $ -0-         $ -0-           $ -0-          -0-         $ -0-          $ -0-
John T. Conroy, EVP     2006  $ 155,667    $ -0-         $ -0-           $ -0-          -0-         $ -0-        $ 10,800
</TABLE>

    (1)   Mr.  Smiley was  appointed  the CEO and  President  of the  Company in
          October 2006. Mr. Smiley waived his right to compensation  during 2006
          in the amount of $52,000.
    (2)   Mr.  Lipman,  was the CEO and President of the Company until  November
          2005 when his contract was terminated.  The $9,900 and $2,700 of other
          compensation in 2005 and 2004,  respectively consists of an automobile
          allowance.
    (3)   Mr. Smith was appointed  the CFO of the Company in October  2006.  Mr.
          Smith  waived his right to  compensation  during 2006 in the amount of
          $47,000.

    (4)   Mr. Conroy  served as the acting CEO & CFO,  prior to October 2006. In
          October  2006,  he was  appointed  the  Executive  Vice  President  of
          Strategic Development. The $10,800 other compensation in 2006 and 2005
          consists  of  an   automobile   allowance.   The   $101,800  of  other
          compensation  in 2004  consists of $1,800 of an  automobile  allowance
          paid to Mr. Conroy. The remaining $100,000 represents  consulting fees
          during the period of time in 2004 (January  through  October) that Mr.
          Conroy was a non-employee  consultant to the Company.  Included in the
          $100,000 were non-cash  consulting fees valued at $60,000,  which were
          contributed by Mr. Conroy to the Company.

Employment  Contracts  and  Termination  of  Employment  and  Change in  Control
Arrangements

On November 28, 2005, the Company terminated the employment agreement with Steve
Lipman, pursuant to his services as the President and Chief Executive Officer of
the Company. The current contract provided for a two year term with an automatic
renewal  for a  successive  one-year  term  period  unless  either  party to the
agreement  gives to the other party at least 90 days advance notice that they do
not wish to renew or the contract is terminated for cause.  Mr. Lipman  received


                                       21
<PAGE>

$12,000 per month plus $900 per month  automotive  allowance.  In  addition  Mr.
Lipman was granted  58,824  stock  options  with an exercise  price of $4.68 per
share and an expiration date of September 30, 2007.

On September 27, 2004, we entered into an employment  agreement with John Conroy
pursuant  to which Mr.  Conroy will serve as Chief  Financial  Officer for a two
year term with an automatic renewal for a successive one-year term period unless
either party to the agreement  gives to the other party at least 90 days advance
notice that they do not wish to renew.  Mr.  Conroy  receives  $12,000 per month
plus $900 per month  automotive  allowance.  Mr.  Conroy  shall also  receive an
automatic  salary  increase  to between  $15,000  and $20,000 per month upon the
Company attaining a net profit of $100,000 per month. In addition Mr. Conroy was
granted  58,824 stock  options with an exercise  price of $4.68 per share and an
expiration date of September 30, 2007.

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

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.

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, 2006 and
2005.

                                       22
<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, 2006 and
2005.

<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 ($)(1)
                                                                  FY-End
                                                            ------------------ -------------------
<S>                               <C>         <C>             <C>               <C>
                                   Shares
                                  Acquired
                                     on          Value
                                  Exercise    Realized ($)    Exercisable/        Exercisable/
             Name                    (#)                      Unexercisable      Unexercisable

Calvin D. Smiley                      0            0               0/0                $0/0
Daniel Smith                          0            0               0/0                $0/0
John Conroy                           0            0            58,824/0           $20,000/0
Gregory Liptak                        0            0               0/0                $/0
</TABLE>

1 The average of the  closing bid and ask price of the Common  Stock on December
31, 2006 ($0.34) was used to calculate the option value.

Securities Authorized for Issuance Under Equity Compensation Plans

The  following  provides  information,  as  of  December  31,  2006,  concerning
compensation plans (including individual compensation  arrangements) under which
equity securities of the Company are authorized for issuance.

<TABLE>
<CAPTION>
                                                                                        Number of
                                                                                        securities
                                                                                    remaining available
                                                                                   for future issuance
                                       Number of securities     Weighted-average   equity compensation
                                        to be issued upon       exercise price       plans (excluding
                                     exercise of outstanding    of outstanding          securities
                                            options,            options, warrants,       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            370,375 (1)           $       4.25             3,000,000
                                      ----------------------    -----------------   -----------------

Total                                     370,375               $       4.25             3,000,000
</TABLE>

(1) Includes 294,118 options issued under the 2001 Stock Option Plan, as amended
in 2005,  (the "Plan") as the Plan has not been approved by the  shareholders of
the Company.

                                       23
<PAGE>

For a complete  description of the Company's equity  compensation  plans, please
refer to Note 6 of our audited  financial  statements  as of December  31, 2006,
which are filed herein.

The table below sets forth the  compensation,  if any, received by the directors
of the Company during the year ended December 31, 2006.

<TABLE>
<CAPTION>

                                  Directors Compensation Table

Name              Fees              Stock            Options           Non-Equity       Nonqualified    All Other   Total
                  Earned or         Awards            Awards            Incentive Plan   Deferred       Compen-
                  Paid-in           ($)              ($)               Compensation     Compensation    sation
                  Cash ($)                                             ($)              ($)             ($)
                  --------          ------           -------           ------------     -----------    --------     ------
<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 (1)   $0                $0               $0                $0               $0              $166,467    $0

Gregory Liptak    $0                $0               $0                $0               $0              $0          $0

Steve Lipman      $0                $0               $0                $0               $0              $0          $0

Todd Wallace      $0                $0               $0                $0               $0              $0          $0

Alan Tracey       $0                $0               $0                $0               $0              $0          $0
</TABLE>


(1)  All current year compensation was converted into Series C preferred stock.

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






                                       24
<PAGE>

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 February 28, 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.

                                           NUMBER OF
SHAREHOLDERS AND BENEFICIAL OWNERS          SHARES            PERCENTAGE
----------------------------------          ------            ----------


Calvin D. Smiley, **
CEO, President & Director                 1,762,803 *               18.9%

Daniel M. Smith, **
CFO & Director                            1,194,525 *               12.8%

John T. Conroy, **                        1,449,742 *               15.6%

Gregory J. Liptak,                                0                    0%
Director

All officers & Directors as a Group       4,407,070                 47.3%

*  Reflect the reverse-split of 1 for 8.5 for common shares and a 1 for 4.5 for
preferred shares.
** Includes  3,406,667  shares  (Smiley  1,680,000,  Smith  1,120,000 and Conroy
606,667) of common stock which were  converted  from  preferred in January 2007,
Series A, Series A and Series C, respectively.

Item  12.  Certain   Relationship   and  Related   Transactions,   and  Director
Independence.

Messrs.  Smiley and Smith,  officers and  directors of the Company,  waved 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 a
related party.  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.

                                       25
<PAGE>

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 expires in December 2007.


Item 13.  Exhibits.

<TABLE>
<CAPTION>

(a) Exhibits

    Exhibit       Description of Document
<S>               <C>

      2.1         Agreement and Plan of Reorganization dated as of October 12, 2004 between
                  CPC and Y-Tel. (2)
      3.1         Certificate of Incorporation of Consolidated Pictures Corp. (1)
      3.2         By-laws of Consolidated Pictures Corp. (1)
      3.5         Certificate of Designation for Series A Preferred Stock (6)
      3.6         Certificate of Designation for Series B Preferred Stock (6)
      3.7         Certificate of Designation for Series C Preferred Stock (6)
      3.8         Class A Redeemable Warrant Agreement. (1)
      3.9         Class B Redeemable Warrant Agreement. (1)
      10.1        Employment Agreement between Y-Tel and Steve Lipman dated September 27,
                  2004. (2)
      10.2        Employment Agreement between Y-Tel and John Conroy dated September 27,
                  2004. (2)
      10.3        Consulting Agreement between Y-Tel and Gil Epstein dated September 27,
                  2004. (2)
      10.4        Consulting Agreement between Y-Tel and Jon McMurray dated September 27,
                  2004. (2)
      10.5        Consulting Agreement between Y-Tel and Garry McHenry dated September 27,
                  2004. (2)
      10.6        2001 Stock Option Plan. (1)
      10.7        Distribution agreement between Y-Tel and EBI Communications, Inc. dated
                  October 25, 2004. (3)
      10.8        2001 Stock Option Plan. (1)
      10.9        Addendum to Employment Agreement between Y-Tel and Steve Lipman dated
                  October 8, 2004. (4)
      10.10       Addendum to Employment Agreement between Y-Tel and J. Conroy dated
                  October 8, 2004. (4)
      10.11       Addendum to Consulting Agreement between Y-Tel and Gil Epstein dated
                  October 8, 2004. (4)
      10.12       Addendum to Consulting Agreement between Y-Tel and John McMurray dated
                  October 8, 2004. (4)
      10.13       Addendum to Consulting Agreement between Y-Tel and Garry McHenry dated
                  October 8, 2004. (4)
      10.14       Agreement and Plan of Merger, dated July 16, 2006 (5)
      10.15       Share and Exchange and Plan of Merger, dated October 1, 2006 (7)
      21.1        Subsidiaries


                                       26
<PAGE>

      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*
</TABLE>

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

(1) Incorporated by reference from our Registration Statement on Form SB-2 filed
with the SEC on May 30, 2001.
(2) Incorporated by reference from our current report on Form 8-K filed with the
SEC on October 18, 2004.
(3) Incorporated by reference from our current report on Form 8-K filed with the
SEC on November 12, 2004.
(4)  Incorporated  by reference from our annual report on Form 10-KSB filed with
the SEC on May 26, 2006.
(5)  Incorporated  by reference  from our current report on Form 8-K, filed with
the SEC on July 19, 2006.
(6)  Incorporated  by reference  from our current report on Form 8-K, filed with
the SEC on October 24, 2006.
(7)  Incorporated  by reference  from our current report on Form 8-K, filed with
the SEC on October 25, 2006.
* Filed herewith.

Item 14.  Principal Accountant Fees and Services.

Audit Fees

The aggregate fees 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 for the fiscal years ended December 31, 2006 and 2005 were
$65,000 and $70,000, respectively.

Audit Related Fees

None.

Tax Fees

For the fiscal years ended December 31, 2006 and 2005, the aggregate fees billed
by KMJ Corbin & Company LLP for tax services,  other than those services  listed
above, totaled $8,000 and $6,000, 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.



                                       27
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of NEXHORIZON COMMUNICATIONS, INC.

We have  audited  the  accompanying  consolidated  balance  sheet of  NexHorizon
Communications,  Inc. and subsidiaries  (formerly Y-Tel International,  Inc. and
subsidiaries)  (the  "Company")  as  of  December  31,  2006,  and  the  related
consolidated statements of operations,  stockholders' deficit and cash flows for
each  of the  years  in the  two-year  period  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
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  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 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, 2006, and the results of
their  operations  and their  cash  flows for each of the years in the  two-year
period 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  $772,745  and  a
stockholders'  deficit of $635,126 at December 31, 2006.  These  factors,  among
others,  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.

/s/KMJ Corbin & Company LLP
Irvine, California
April 16, 2007

F-1

<PAGE>


<PAGE>

<TABLE>
<CAPTION>

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

                                                                                               CONSOLIDATED BALANCE SHEET

                                                                                                        December 31, 2006

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

Current assets:
        Cash                                                                                                       $ 101
        Due from affiliate                                                                                        47,016
        Current portion of prepaid services                                                                       30,000
                                                                                                     --------------------
             Total current assets                                                                                 77,117

Property and equipment, net                                                                                      107,621

Other assets                                                                                                       1,248
Prepaid services, net of current portion                                                                          28,750
                                                                                                     --------------------

                                                                                                               $ 214,736
                                                                                                     ====================


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
        Accounts payable                                                                                       $ 682,214
        Accrued expenses                                                                                         157,231
        Note payable, net of discount                                                                             10,417
                                                                                                     --------------------
             Total current liabilities                                                                           849,862


Commitments and contingencies

Stockholders' deficit:
        Preferred Series A stock, no par value, 2,550,000 shares authorized;
        566,667 shares issued and outstanding (liquidation preferrence of $2,550,000)                                 57
        Preferred Series B stock, no par value, 1,800,000 shares authorized;
        400,000 shares issued and none outstanding                                                                     -
        Preferred Series C stock, no par value, 650,000 shares authorized;
        144,444 shares issued and outstanding (liquidation preference of $650,000)                                    14
        Common stock, $0.0001 par value, 50,000,000 shares authorized;
        4,100,797 shares issued and outstanding                                                                      410
        Additional paid in capital                                                                            11,374,583
        Accumulated deficit                                                                                  (12,010,190)
                                                                                                     --------------------

        Total stockholders' deficit                                                                             (635,126)
                                                                                                     --------------------

                                                                                                               $ 214,736
                                                                                                     ====================


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

<PAGE>

<TABLE>
<CAPTION>

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

                                                                         CONSOLIDATED STATEMENTS OF OPERATIONS



--------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                  <C>
                                                                              Years Ended December 31,
                                                                        --------------------------------------
                                                                              2006                 2005
                                                                        -----------------    -----------------

Net sales                                                                       $ 91,211            $ 976,231

Cost of sales                                                                     86,713              352,144
                                                                        -----------------    -----------------

Gross profit                                                                       4,498              624,087
                                                                        -----------------    -----------------

Operating expenses:
Satellite, bandwidth and other telecommunications expenses                        24,851              135,556
Contract labor                                                                     9,789              154,229
Salaries and related expenses                                                    280,335              478,576
Noncash compensation                                                           2,251,196            2,997,401
Impairments                                                                       19,750              531,665
Loss on disposal of property and equipment                                             -              367,878
Other general and administrative expenses                                        227,304            1,197,512
                                                                        -----------------    -----------------

     Total operating expenses                                                  2,813,225            5,862,817
                                                                        -----------------    -----------------

Interest expense                                                                  33,679                2,800
                                                                        -----------------    -----------------

Net loss                                                                    $ (2,842,406)        $ (5,241,530)
                                                                        =================    =================



Basic and diluted loss per common share                                          $ (1.31)             $ (2.71)
                                                                        =================    =================


Weighted average number of common
shares outstanding - basic and diluted                                         2,164,685            1,934,240
                                                                        =================    =================











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

<PAGE>
<TABLE>
<CAPTION>

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

                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                                                                      For The Years Ended December 31, 2006 and 2005
                                                                                                                         (Continued)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Total
                                     Series A Preferred  Series C Preferred    Common Stock              Accumulated   Stockholders'
                                     Shares      Amount  Shares      Amount  Shares      Amount   APIC      Deficit     Deficit
                                     -----------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>         <C>                <C>     <C>        <C>          <C>
Balance, December 31, 2004                 -      $ -          -     $ -  1,815,018     $ 182   5,716,638  $(3,926,254) $1,790,566
                                     ===============================================================================================

Common stock issued for cash               -        -          -       -    182,075        18     964,411            -     964,429

Estimated fair value of common
  stock issued for prepaid services        -        -          -       -      7,353         1     126,249            -     126,250

Issuance of common stock upon
   conversion of debt and accrued
   interest                                -        -          -       -      2,141         -      72,800            -      72,800

Estimated fair value of common
   stock issued for services               -        -          -       -     35,082         4     343,916            -     343,920

Estimated fair value of options
   issued for services                     -        -          -       -          -         -   1,387,125            -   1,387,125

Common stock issued on exercise
   of warrants                             -        -          -       -        212         -       2,100            -       2,100

Cancellation of EBI agreement              -        -          -       -    (35,294)       (4)   (404,692)           -    (404,696)

Settlement related to shares
   issued for note payable                 -        -          -       -          -         -     227,000            -     227,000

Net loss                                   -        -          -       -          -         -           -   (5,241,530) (5,241,530)
                                     ----------------------------------------------------------------------------------------------

Balance, December 31, 2005                 -        -          -       -  2,006,587       201   8,435,547   (9,167,784)   (732,036)
                                     ==============================================================================================
Estimated fair value of pre-
    ferred stock issued for
    services                         566,667       57          -       -          -        -   1,903,943             -   1,904,000

Estimated fair value of
    preferred stock issued
    in connection with conver-
    sion of accounts payable               -        -    144,444      14          -        -     204,429             -     204,443

Common stock issued for cash               -        -          -       -     69,859        7      33,748             -      33,755

Estimated fair value of
    common stock issued for
    services                               -        -          -       -    631,320       63     356,072             -     356,135

Estimated fair value of common
    stock issued for the
    conversion of accounts
    payable to related party               -        -          -       -  1,098,913      110     191,290             -     191,400

Common stock issued on conver-
    sion of advance                        -        -          -       -    294,118       29      49,971             -      50,000

Estimated fair value of services
    rendered by management                 -        -          -       -          -        -      98,958             -      98,958


F-4

<PAGE>

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

                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                                                                      For The Years Ended December 31, 2006 and 2005

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Total
                                     Series A Preferred  Series C Preferred    Common Stock              Accumulated   Stockholders'
                                     Shares      Amount  Shares      Amount  Shares      Amount   APIC      Deficit     Deficit
                                     -----------------------------------------------------------------------------------------------

Estimated fair value of BCF                -        -          -       -          -        -      39,063             -      39,063

Estimated fair value of warrants           -        -          -       -          -        -      10,937             -      10,937

Estimated fair value of warrants
   issued upon conversion of
   accounts payable
   and notes payable                       -        -          -       -          -        -      36,000             -      36,000


Vesting of warrants issued for
   services                                -        -          -       -          -        -      14,625             -      14,625

Net loss                                   -        -          -       -          -        -          -     (2,842,406) (2,842,406)
                                     ----------------------------------------------------------------------------------------------

Balance, December 31, 2006            566,667    $ 57    144,444   $  14 $4,100,797  $   410 $11,374,583  $(12,010,190)  $(635,126)
                                     ==============================================================================================



----------------------------------------------------------------------------------------------------------------------------
F-5                                                              See accompanying notes to consolidated financial statements

                                                              (Continued)

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     For The Years Ended December 31, 2006 and 2005
                                                                                        (Continued)
---------------------------------------------------------------------------------------------------
<S>                                                                    <C>             <C>
                                                                           2006           2005
                                                                       --------------  ------------
Cash flows from operating activities:
    Net loss                                                            $ (2,842,406)  $ (5,241,530)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
       Depreciation                                                           29,986          68,791
       Bad debt expense                                                        8,216          55,000
       Estimated fair value of services rendered by management                98,958               -
       Estimated fair value of preferred and common stock
           issued for services                                             2,200,135         343,920
       Impairment of intangible asset                                              -         222,000
       Amortization of prepaid services and intangible assets                 18,436       1,269,160
       Impairment loss on prepaid services                                         -         150,000
       Impairment loss on property and equipment                              19,750         159,665
       Estimated fair value of options and warrants granted for
           consulting services                                                14,625       1,387,125
       Estimated fair value of warrants granted upon conversion
           of accounts  payable and avances                                   36,000               -
       Estimated fair value of warrants and beneficial conversion
           feature in connection with convertible note payables               10,417               -
       Loss on disposal of property and equipment                                  -         367,878
       Changes in operating assets and liabilities:
          Accounts receivable                                                  1,621          54,403
          Prepaid expenses and other assets                                   25,359          28,968
          Due from stockholders                                                    -           1,963
          Accounts payable and accrued expenses                              237,794         240,293
                                                                       --------------    ------------

    Net cash provided by (used in) operating activities                     (141,109)       (892,364)
                                                                       --------------    ------------

Cash flows from investing activities:
    Purchase of intangible assets oriceeds from the sale of property
          and equipment                                                            -         (25,000)
    Proceeds from the sale of property and equipment                               -          47,500
    Purchase of property and equipment                                             -        (162,527)
    Collection of note receivable                                             48,000               -
    Advances to affiliate                                                    (47,016)              -
                                                                       --------------    ------------

    Net cash used in investing activities                                        984        (140,027)
                                                                       --------------    ------------
Cash flows from financing activities:
    Issuance of common stock for cash                                         33,755         964,429
    Payments on note payable to related party                                      -         (17,500)
    Proceeds from the exercise of warrants                                         -           2,100
    Proceeds from the issuance of convertible debt                                 -          70,000
    Proceeds from issuance of notes payable - related party                  100,000               -
                                                                       --------------    ------------

    Net cash provided by financing activities                                133,755       1,019,029
                                                                       --------------    ------------

Decrease in cash                                                              (6,370)        (13,362)

Cash at beginning of year                                                      6,471          19,833
                                                                       --------------    ------------

Cash at end of year                                                            $ 101         $ 6,471
                                                                       ==============    ============

Supplemental disclosure of cash flow information - Cash paid during
    the year for:
       Interest                                                                  $ -            $ -
                                                                       ==============   ============
       Income taxes                                                              $ -            $ -
                                                                       ==============   ============
F-6

<PAGE>

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

                                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     For The Years Ended December 31, 2006 and 2005
---------------------------------------------------------------------------------------------------

Supplemental schedule of noncash investing and financing activities:
    Forgiveness of amounts due to related party                                  $ -      $ 227,000
                                                                       ==============   ============
    Value of shares cancelled related to termination of EBI agreement            $ -      $ 404,696
                                                                       ==============   ============
    Receivable in connection with the termination of intangible
         asset agreement                                                         $ -       $ 55,000
                                                                       ==============   ============
    Issuance of common stock upon conversion of accounts and notes
         payable and accrued interest                                        241,400        $72,800
                                                                       ==============   ============
    Issuance of common stock for prepaid services and distribution
         rights                                                             $ 60,000      $ 126,250
                                                                       ==============   ============
    Cancellation of debt in connection with sale of property and
         equipment                                                               $ -      $ 310,098
                                                                       ==============   ============
    Offset of amounts due from related parties with amounts due
         to related parties                                                      $ -       $ 44,800
                                                                       ==============   ============
    Note receivable in connection with sale of property and equipment            $ -       $ 48,000
                                                                       ==============   ============
    Issuance of preferred stock upon conversion of accounts payable        $ 204,443            $ -
                                                                       ==============   ============
    Estimated fair value of warrants and beneficial conversion feature      $ 50,000            $ -
                                                                       ==============   ============


---------------------------------------------------------------------------------------------------
F-7                                     See accompanying notes to consolidated financial statements

                                          (Continued)
</TABLE>

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

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

Nature of Business

Consolidated  Pictures Corp, ("CPC") was incorporated in Delaware on January 16,
2001.  On October  13,  2004,  CPC  acquired  all of the issued and  outstanding
capital stock of Y-Tel  International,  LLC  ("Y-Tel") in a reverse  acquisition
transaction.  On December 26, 2004, CPC changed its name to Y-Tel International,
LLC. On January 29, 2007,  Y-Tel 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.  In 2005,  the Company
developed its own Voice over Internet Protocol ("VoIP") network and migrated its
customers  from  the  older  DMS  platform  to the new VoIP  infrastructure.  In
December  2005, the Company sold off its DMS equipment for a combination of cash
and debt relief.

On October 17,  2006,  the Company  entered  into an agreement of Plan of Merger
(the "Merger") with Sunrise Television Network,  Inc., ("STN").  Pursuant to the
Merger,  all of the  outstanding  shares of STN's common stock will be exchanged
into 400,000 shares of the Company's  Series B preferred stock. The Series B are
being held in escrow to be issued to the shareholders of record of STN on a date
approximately  10 days  after  the  completion  of the  STN  audit  and  will be
disbursed to such  shareholders  effective upon the  satisfaction of all closing
conditions.  The  Series  B shares  of  preferred  stock  are  convertible  into
2,666,667 shares of common stock, as amended.

Immediately after executing the Merger, the officers of the Company resigned and
the former management of STN accepted the new positions.

Subsequent  to  entering  into the Merger and prior to the closing of the Merger
(which is  expected  in the  second  quarter  of 2007),  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.  As a result,  the
Company anticipates  recording the Merger as a "reverse acquisition" whereby STN
will be considered to be the accounting  acquirer as it retained  control of the
Company after the Merger.

The  closing of the Merger is subject to the  delivery of audits for STN and its
subsidiary.  The related  audits were not completed at December 31, 2006,  which
precluded the related  acquisition from being recorded for accounting  purposes.
The Company  expects the audits to be completed and to record the transaction in
the second quarter of 2007.

In January 2007, the Company changed its name to NexHorizon Communications, Inc.
and  affected a one for eight and  one-half  reverse  stock  split of its common
stock  and a one for four and  one-half  reverse  stock  split of its  preferred
stocks. The financial  statements presented herein have been restated to reflect
the reverse  stock split as if it had  occurred at the  beginning of each period
presented.

In connection with the pending acquisition, the Company has changed its business
objective from being a telecommunication  carrier to a cable television services
provider.  In addition,  the Company seeks to identify a series of strategically
targeted rural cable systems and networks for acquisition.  The Company hopes to
expand its basic cable TV services to include Digital,  Video on Demand ("VoD"),
Pay per View,  High Speed,  and  Telephone  through  either its  existing  cable
network or WiFi ("Wireless  Fidelity") last mile  strategies.  Management of the
Company believes that this will result in increased  reliability and capability,
growing revenue and profit while decreasing expenses.

F-8

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

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

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
$772,745 at December 31, 2006 and has incurred operating losses and had negative
cash flows from  operations  during the years ended  December 31, 2006 and 2005,
and  has a lack  of  operational  history,  which  among  other  factors,  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,  due  from  affiliate,
accounts payable,  accrued expenses and note 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  reliability  of amounts due from  affiliate,  property  and
equipment and prepaid services 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, 2006, the Company
did not have any accounts with balances in excess of the FDIC insurance limits.

In 2006,  the  Company  offered  its  services  predominantly  to  international
customers  located  outside  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.

F-9

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

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

In 2007, the Company will offer its services  predominantly  to rural  customers
located  within the United  States and will extend 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 will monitor its exposure for credit losses and
maintain  allowances for anticipated  losses, if required.  Although the Company
will  expect 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.

One  customer  accounted  for 75% and 73% of the  total  net sales for the years
ended December 31, 2006 and 2005, respectively. All funds due from this customer
have been collected as of December 31, 2006.

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.  On December 12, 2005,
the  Company  sold the  assets in Miami,  Florida  and Panama  City,  Panama and
recorded a loss on sale of property and equipment of $367,878 (see Note 4).

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,
2006 and 2005, the Company recorded $19,750 and $531,665 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 2006,  the Company's  revenue was generated  from two
sources:  1) the sale of traffic (minutes) to other telecom  companies,  whereby
the revenue is recognized when invoiced to the customer,  which approximates the
time the phone  calls are  placed;  and 2) port rental  charges  resulting  from
leasing  a  portion  of the DMS  switch  to  Digicel,  whereby  the  revenue  is
recognized during the month in which the revenue applies. Effective November 15,
2005,  the  Company  completed  its  contractual   obligations  to  Digicel  and
terminated the contract.  The DMS switch was  subsequently  sold on December 12,
2005 (see Note 4), thereby  completing the migration from the old DMS technology
to the new VoIP infrastructure.

Stock-Based Compensation

At December 31, 2006, the Company had one stock-based  compensation  plan. Prior
to January 1, 2006,  the Company  accounted for this plan under the  recognition
and measurement  provisions of Accounting  Principles  Board ("APB") Opinion No.
25, Accounting for Stock Issued to Employees,  and related  interpretations,  as
permitted  by  SFAS  No.  123,  Accounting  for  Stock  Based  Compensation.  No
stock-based  employee  compensation  cost was  recognized  in the  statements of
operations for the year-ended December 31, 2006 and 2005, as all options granted
under the plan were fully vested.

F-10

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

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

Effective  January 1,  2006,  the  Company  adopted  the fair value  recognition
provisions   of   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.

The Company has issued  stock  options to  employees  and  directors  whose only
condition  for vesting are continued  employment  or service  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, 2006,
there was no excess tax benefit to the Company.

For the year-ended December 31, 2006, the Company did not recognize compensation
cost as a result of the adoption of SFAS No. 123(R).

The following  table  illustrates  the effect on net loss and net loss per share
for the  year-ended  December  31,  2005 as if the  Company had applied the fair
value recognition  provisions of SFAS 123 to options granted under the Company's
stock option plans. For purposes of this pro forma disclosure, the fair value of
the  options  is  estimated  using the Black  Scholes  option-pricing  model and
amortized on a straight-line basis to expense over the options' vesting period:

F-11

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

NOTE 1 - BASIS OF PRESENTATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------------------------------
(Continued)
-----------
                                                                 Year Ended
                                                             December 31, 2005
                                                             ------------------

Net loss, as reported                                          $   (5,241,530)

Deduct:
  Total stock-based employee
    compensation under APB
    No. 25, net of related
    tax expense                                                             -

Add:
  Total stock-based employee
  compensation expense
  under fair value based
  method for all awards,
  net of related tax effect                                                 -
                                                                ---------------
Pro forma net loss                                              $  (5,241,530)
                                                                ===============
Basic and diluted loss per
  share - as reported
                                                                $       (2.71)
                                                                ===============
Basic and diluted loss per
  share - pro forma
                                                                $       (2.71)
                                                                ===============
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.
Accordingly,  the Company recorded the fair value of the common stock issued for
future consulting services as prepaid services in its consolidated balance sheet
(see Note 6).

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.

F-12

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

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

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.  As of  December  31, 2006 and 2005,  the  Company had no  potentially
dilutive securities that would affect loss per share.

Beneficial Conversion Feature

The convertible features of a convertible note provides for a rate of conversion
that is below  market  value (see Note 5). Such  feature is  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 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.

New Accounting Pronouncements

In  July  2006,  the  Financial  Accounting  Standards  Board  ("FASB")  adopted
Interpretation No. 48, ("FIN 48"), Accounting for Uncertainty in Income Taxes --
an  interpretation  of FASB  Statement No. 109,  which defines the threshold for
recognizing  the benefits of tax return  positions as well as provides  guidance
regarding the  measurement  of the  resulting  tax  benefits.  FIN 48 requires a
company  to  recognize  for  financial  statement  purposes  the impact of a tax
position  if that  position is "more  likely than not" to prevail  (defined as a
likelihood of more than fifty percent of being  sustained  upon audit,  based on
the technical  merits of the tax  position).  FIN 48 will be effective as of the
beginning  of the  Company's  fiscal year ending  December  31,  2007,  with the
cumulative  effect  of  the  change  in  accounting  principle  recorded  as  an
adjustment to retained earnings.  The Company is currently evaluating the impact
of adopting FIN 48 on its consolidated financial statements.

In September 2006, the SEC Staff issued SAB No. 108,  Considering the Effects of
Prior  Year  Misstatements  when  Quantifying   Misstatements  in  Current  Year
Financial  Statements,  to require  registrants to quantify financial  statement
misstatements  that have been  accumulating  in their  financial  statements for
years and to correct them, if material,  without restating. Under the provisions
of SAB No. 108,  financial  statement  misstatements  are to be  quantified  and
evaluated  for  materiality  using  both  balance  sheet  and  income  statement
approaches.  SAB No. 108 is effective for fiscal years ending after November 15,
2006. The adoption of this  pronouncement  did not have a material impact on the
Company's consolidated results of operations or financial condition.

In September  2006,  the FASB issued SFAS No. 157,  Fair Value  Measurement,  to
define fair value,  establish a framework  for  measuring  fair value and expand
disclosures  about fair value  measurements.  This statement  provides  guidance
related to the definition of fair value,  the methods used to measure fair value
and  disclosures  about fair value  measurements.  SFAS No. 157 is effective for
financial  statements issued for fiscal years beginning after November 15, 2007,
and  interim  periods  within  those  fiscal  years.  The  Company is  currently
evaluating  the impact of adopting  SFAS No. 157 on its  consolidated  financial
statements.

Reclassifications

Certain   reclassifications  have  been  made  to  prior  year  amounts  in  the
consolidated  financial  statements  in order to  conform  to the  current  year
presentation.  These  reclassifications  have no effect on  previously  reported
results of operations.

NOTE 2 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consists of the following at December 31, 2006:

Equipment                                                     $     149,931

Less accumulated depreciation                                       (42,310)
                                                               ------------

Fixed assets, net                                             $     107,621
                                                               ============

F-13

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

Depreciation  expense for property and equipment for the periods ended  December
31, 2006 and 2005 was $29,986 and $68,791 respectively.

On August 3, 2005,  the Company  entered  into an agreement to sell its property
and  equipment  in  Panama  for   $300,000.   Management   concluded   that  the
opportunities in Panama had  significantly  changed and no longer required a DMS
platform to generate  revenue.  Accordingly,  the Company recorded an impairment
loss of  $159,665  based on the excess of the book  value  over the fair  market
value of such assets on that date.

As of December 12, 2005, the above referenced sale had not occurred.  Therefore,
on December 12, 2005,  the Company  entered into a sales  agreement  (the "Sales
Agreement")  with AIT and a tri-party  agreement  with AIT and  unrelated  third
party,  whereby the Company  agreed to sell its fixed  assets  located in Panama
City, Panama and Miami, Florida (see Note 4).

NOTE 3 - INTANGIBLE ASSET
-------------------------

In October 2004, the Company  entered into an exclusive  worldwide  distribution
agreement (the "Distribution Agreement") with EBI Communications,  Inc. ("EBI").
In accordance  with the  Distribution  Agreement,  the Company  agreed to pay an
exclusive  marketing  fee of  $100,000,  $5,000  payable  upon  execution of the
Distribution  Agreement and $95,000 within 60 days thereafter,  of which $25,000
was paid during the year ended  December 31, 2005.  Also, in  consideration  for
receiving  the exclusive  distribution  rights,  the Company  issued EBI 300,000
shares of restricted common stock valued at approximately $675,000 (based on the
estimated fair market value on the date of issuance) and recorded such amount as
an intangible  asset. The Company was amortizing such amount to expense over the
10-year life of the agreement.

Effective June 2005, the Company terminated the contract with EBI, canceling all
shares and  requiring  EBI to refund all advances  made by the Company under the
Distribution Agreement,  which totaled $55,000 due to alleged breach of contract
by EBI. In connection with the contract  termination,  the Company cancelled the
300,000  shares of common stock issued to EBI (valued at $404,696 on the date of
cancellation)  and recorded the  difference  between the fair value of the stock
cancelled by the Company and the unamortized value of the intangible asset as an
impairment  loss of  $222,000  in the  accompanying  consolidated  statement  of
operations.  In  addition,  the  Company  wrote-off  the amounts due from EBI of
$55,000 due to the uncollectibility of such amounts.

During the year ended December 31, 2005 the Company expensed $36,554 through the
date of termination.

NOTE 4 - RELATED PARTY TRANSACTIONS
-----------------------------------

During the year ended  December  31,  2006,  the Company  recorded  compensation
expense and additional  paid in capital  aggregating  $98,958 in connection with
salaries waived by certain members of management.

In October  2006,  the Company  issued  144,444  shares of preferred  stock to a
member of management in connection  with the  conversion of accrued  expenses of
$204,443.

On October 17,  2006,  the Company  entered  into an agreement of Plan of Merger
(the "Merger") with Sunrise Television Network,  Inc., ("STN").  Pursuant to the
Merger,  all of the  outstanding  shares of STN's common stock will be exchanged
into 400,000 shares of the Company's  Series B preferred stock. The Series B are
being held in escrow to be issued to the shareholders of record of STN on a date
approximately ten days, from the completion of the STN audit (see Note 1).

F-14

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005


NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)
-----------------------------------------------

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 expires in December 2007.

In October 2006,  the Company  settled  $191,400 of its amounts due to a related
party with the issuance of 1,098,913  restricted  common  shares at an estimated
fair value of $0.17 per share  (based on the fair  value of the common  stock at
the measurement date). As additional  consideration for converting such amounts,
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 non-cash  compensation in the  accompanying  consolidated
statement of operations during 2006.

In October 2006, the Company issued 294,118 shares of common stock in connection
with the performance of consulting  services.  The shares were valued at $50,000
or$0.17  per  share  (based  on the  fair  value  of  the  common  stock  at the
measurement date) and expensed during the year ended December 31, 2006.

In May 2006, the Company issued 194,118 shares of restricted common stock to two
of its board members for services  provided.  The shares were valued at $231,000
(based  on the fair  value of the  common  stock at the  measurement  date)  and
expensed during 2006.

On December 12, 2005, the Company  entered into a Sales Agreement with AIT and a
Tri-Party  agreement with AIT and an unrelated  third party.  In connection with
the Sales  Agreement,  the  Company  sold fixed  assets with a net book value of
$300,000  in  exchange  for  cancellation  of  debt  owed  AIT of  $182,598.  In
connection  with the Tri-Party  Agreement,  the Company sold fixed assets with a
net book value of $473,476 to an unrelated third party in consideration  for the
cancellation  of debt  owed to AIT of  $127,500,  a  non-interest  bearing  note
receivable of $48,000 and cash of $47,500. As a result of the transactions,  the
Company  recognized  an  aggregate  loss on sale of property  and  equipment  of
$367,878.  The Company has obtained a full release of the amounts owed to AIT as
a result  of these  agreements.  Under  the  terms of the note  receivable,  the
Company is to receive $8,000 per month beginning in January 2006. The agreements
are summarized as follows:


Cancellation of debt                         $              310,098
Note receivable                                              48,000
Cash                                                         47,500
Sale of fixed assets                                      (773,476)
                                                --------------------
                                             $            (367,878)
                                                ====================


The Company  entered into  consulting  agreements  with three  stockholders  for
services provided through June 2005 (see Note 8).

NOTE 5 - DEBT
-------------

In October 2006, the Company issued a one (1) year convertible note payable (the
"Convertible  Note") totaling  $50,000,  bearing interest at 7.5% per annum. The
one (1) year Convertible  Note, at the holder's option,  may convert the Note to
restricted  common shares at $.17 per share The  Convertible  Note also included
23,529  warrants  exercisable at $0.17.  In connection  with the issuance of the
note,  the  Company  recorded  a  debt  discount  of  $50,000,  consisting  of a
beneficial  conversion  feature of $39,063  and the  relative  fair value of the
warrant of $10,937.  The Company is amortizing  the discount using the effective
interest  method through  October 2007.  During 2006,  approximately  $10,417 of
interest  expense was recognized in the accompanying  consolidated  statement of
operations in connection with amortization of the debt discount.

F-15

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

In June 2005,  the Company issued a convertible  note payable (the  "Convertible
Note")  totaling  $70,000,  bearing  interest  at 8% per  annum.  Principal  and
interest were due on June 22, 2007. The Convertible Note and accrued interest of
$2,800 was  converted  at $34.00 per share  into 2,141  shares of the  Company's
common stock in December 2005.


NOTE 6 - EQUITY
---------------

Preferred Stock

During the year ended  December 31, 2006,  the Company issued shares of Series A
Preferred Stock,  $0.0001 par value per share ("Series A Preferred Stock").  The
Series A Preferred  Stock shall bear no dividend.  The Series A Preferred  Stock
converts  into common stock at a  conversion  rate of 4.94 share of common stock
for each share of preferred stock at the option of the holder. In the event of a
liquidation,  dissolution  or winding up of the affairs of the Company,  whether
voluntary  or  involuntary,  the  holders  of the Series A  Preferred  Stock are
entitled to receive, out of the assets of the Company available for distribution
to its  stockholders,  an  amount  equal to  $4.50  per  share  of the  Series A
Preferred  Stock  before any  payment is made or any assets  distributed  to the
holders of the common stock.  The total Series A Preferred  Stock shall have the
voting rights of 51% of all common shares represented at and entitled to vote at
any meeting of the shareholders.  The Company has authorized 2,550,000 shares of
preferred stock as Series A Preferred Stock.

During the year ended December 31, 2006, the Company also  authorized  1,800,000
Series B  Preferred  Stock,  $0.0001  par value per share  ("Series B  Preferred
Stock").  The Series B  Preferred  Stock  shall bear no  dividend.  The Series B
Preferred Stock converts into common stock at a conversion rate of 6.67 share of
common stock for each share of preferred  stock.  In the event of a liquidation,
dissolution  or winding up of the affairs of the Company,  whether  voluntary or
involuntary, the holder of the Series B Preferred Stock are entitled to receive,
out of the assets of the Company available for distribution to its stockholders,
an amount  equal to $4.50 per share of the Series B  Preferred  Stock  after all
Series A Preferred  stock is paid, if any, but before any payment is made or any
assets  distributed  to the holders of the common stock.  If there are no issued
and  outstanding  Series A Preferred  Stock,  the total Series B Preferred shall
have voting  rights of 51% of all common shares  represented  at and entitled to
vote at any  meeting of the  shareholders.  If there are issued and  outstanding
Series A  Preferred  Stock,  then the Series B  Preferred  Stock  shall have the
number of votes equal to the equivalent common shares.

During the year ended  December 31, 2006,  the Company issued shares of Series C
Preferred Stock,  $.0001 par value per share ("Series C Preferred  Stock").  The
Series C Preferred  Stock shall bear no dividend.  The Series C Preferred  Stock
converts  into common stock at a  conversion  rate of 4.20 share of common stock
for each share of preferred stock. In the event of a liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or involuntary,  the
holder of the Series C  Preferred  Stock are  entitled  to  receive,  out of the
assets of the Company available for distribution to its stockholders,  an amount
equal to $4.50 per share of the Series C Preferred  Stock after all Series A and
B Preferred  stock is paid, if any, but before any payment is made or any assets
distributed  to the  holders  of the  common  stock.  If there are no issued and
outstanding  Series A or B Preferred  Stock,  the total Series C Preferred shall
have voting  rights of 51% of all common shares  represented  at and entitled to
vote at any  meeting of the  shareholders.  If there are issued and  outstanding
Series A and or B Preferred Stock,  then the Series C Preferred Stock shall have
the number of votes  equal to the  equivalent  common  shares.  The  Company has
authorized 650,000 shares of preferred stock as Series C Preferred Stock.

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 (See Note 4). 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 400,000 shares of
Series B Preferred Stock in connection with an acquisition (see Note 1).

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 a
related party.  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 (See
Note 4). In January  2007,  such shares were  converted  into 606,667  shares of
common stock.

Common Stock

During the year ended December 31, 2006, the Company  entered into the following
common  stock  transactions  with  related  parties  (see  Note 4): o Issued  an
aggregate of 488,236 shares for consulting  services  valued at $281,000;  and o
Issued an  aggregate  of 1,393,031  shares of common  stock upon  conversion  of
$241,400 of accounts payable and accrued expenses.

F-16

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

During the  year-ended  December 31, 2006 the Company  issued  69,859  shares of
restricted common stock for cash totaling $33,755.

NOTE 6 - EQUITY (Continued)
---------------------------

During the  year-ended  December 31, 2006,  the Company issued 143,084 shares of
common stock to consultants for $75,135 in connection with services. The Company
capitalized  $60,000 of such amount and  recorded it as prepaid  services in the
accompanying  balance  sheet.  Such amount will be amortized to expense over the
life of the related  agreement,  of which  $1,250 was expensed in 2006 (see Note
8).

On December 1, 2005 the Company  entered into a stock  purchase  agreement  with
Mercatus & Partners regarding the purchase of 308,824 shares of common stock for
$1,200,000.  The agreement was not consummated and the stock certificates issued
have been cancelled and returned to the Company in the third quarter of 2006.

During the year ended  December 31, 2005 the Company  issued  182,075  shares of
restricted common stock for cash totaling $964,429.

In December  2005, the Company issued 2,141 shares of common stock in connection
with the conversion of notes payable and accrued interest (see Note 5).

During the year ended December 31, 2005, the Company issued 212 shares of common
stock for $2,100 in connection with the exercise of warrants.

During the year ended  December  31,  2005,  the Company  issued 8,824 shares of
restricted  common stock to the Company's new Chief Technical  Officer and 5,883
shares of restricted common stock to a new board member as signing bonuses.  The
aggregate of 14,707  shares were valued at $175,000  (based on the fair value of
the common stock at the respective  measurement  dates) and expensed  during the
year ended December 31, 2005.

During the twelve  month period ended  December  31,  2005,  the Company  issued
20,376 shares of restricted  common stock to various  consultants  in connection
with the  performance of consulting  services.  The 20,376 shares were valued at
$168,920  (based  on the  fair  value  of the  common  stock  at the  respective
measurement dates) and expensed during the year ended December 31, 2005.

During the twelve month period ended December 31, 2005, the Company issued 7,353
shares of restricted common stock to various  consultants in connection with the
performance of consulting services to be performed through March 2006. The 7,353
shares were valued at $126,250  (based on the fair value of the common  stock at
the  respective  measurement  dates) and  recorded  as prepaid  services  in the
accompanying  consolidated  balance  sheet.  Such  amount will be  amortized  to
expense over the lives of the related agreements,  of which $17,186 and $109,064
was expensed during the years ended December 31, 2006 and 2005, respectively.

Stock Options

In  connection  with the  reverse  acquisition  of CPC (see Note 1), the Company
adopted the  existing  2001 Stock  Option Plan (the "Plan") of CPC. 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.

During the year ended  December 31, 2005,  the Company  expensed  $1,226,250  as
stock  compensation  expenses for the vesting of options  issued to  consultants
during fiscal 2004. In connection with  consulting  agreements (see Note 8) with
three Company stockholders,  the Company issued options to purchase an aggregate
of 176,470 shares of common stock during fiscal 2004,  with an exercise price of
$4.68,  which vested  immediately and expire through September 2007. The options
were valued  using the Black  Scholes  option  pricing  model at an aggregate of
$1,635,000.  The  Company  amortized  such  amount over the lives of the related
consulting agreements which ended on June 30, 2005.

In connection with employment  agreements (see Note 8), during 2004, the Company
issued options to purchase an aggregate of 117,647 shares of common stock to two
officers,  with an exercise price of $4.68,  which vested immediately and expire
through September 2007. The Company recorded compensation expense of $550,000 in
connection with the issuance of the employee options.


F-17

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005


NOTE 6 - EQUITY (Continued)
---------------------------

Stock  option  activity  for the years  ended  December  31, 2006 and 2005 is as
follows:

                                                               Weighted Average
                                                Number          Exercise Price
                                              of Options           Per Share
                                          ---------------     ------------------
      Outstanding at January 1, 2005            294,118         $          4.68
         Granted                                      -                       -
         Exercised                                    -                       -
         Canceled                                     -                       -
                                          ---------------     ------------------
      Outstanding and exercisable at
         December 31, 2005 and  2006            294,118              $     4.68
                                          ===============     ==================


There  were no  options  granted  during  2006 or  2005.  The  weighted  average
remaining contractual life of these options at December 31, 2006 was 0.75 years.

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, 2006, in connection  with the  settlement of
accounts  payable,  the Company  issued 47,058  warrants  which were vested upon
grant and expire in December 2007 (see Note 4). The warrants are  exercisable at
$0.17 per share.  The shares were valued at $36,000  based on the Black  Scholes
option pricing model.

In  connection  with the issuance of a  convertible  note  payable,  the Company
issued a warrant to purchase  23,529 shares of the  Company's  common stock (see
Note 5).

In connection  with the reverse  acquisition  with CPC (see Note 1), the Company
assumed  warrants  to issue  3,282  shares  of the  Company's  common  stock and
warrants to issue 3,282 shares of the Company's  common stock.  The warrants are
exercisable  at $8.50,  vested  upon grant and  expired in  September  2006,  as
amended.  Based on the  estimated  fair value of the warrants at the date of the
expiration extension, there was no additional expense recorded. The warrants are
exercisable  at $12.75 per share,  vested  upon grant and  expired in  September
2006.

During the year ended December 31, 2005, a total of 141 Warrants and 71 Warrants
were exercised for total proceeds of $2,100.

During  the year  ended  December  31,  2005,  the  Company  issued a warrant to
purchase  5,882 shares of restricted  common stock to a consultant in connection
with the  performance  of consulting  services to be performed  through  January
2006.  The  warrant was valued at $175,500  (based on the Black  Scholes  option
pricing model),  has an exercise price of $34.00,  vests monthly through January
2006 and expires in January 2008. Such amount is being expensed over the life of
the related  agreement,  of which  $14,625 and $160,875 was expensed  during the
years ended December 31, 2006, and 2005, respectively.

The  following  represents a summary of the warrants  outstanding  for the years
ended December 31, 2006 and 2005:

F-18

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

NOTE 6 - EQUITY (Continued)
---------------------------

<TABLE>
<CAPTION>

                                                                                          Weighted Average
                                                                         Number            Exercise Price
                                                                      of Warrants            Per Share
                                                                   -------------------   -------------------
<S>                                                                <C>                   <C>
   Outstanding at January 1, 2005                                              6,564        $       10.63
     Granted                                                                   5,882                34.00
     Exercised                                                                 (212)                 9.95
     Expired/Forfeited                                                             -                    -
                                                                   -------------------   -------------------
   Balance at December 31, 2005                                               12,234       $        21.76
     Granted                                                                  70,587                 0.17
     Exercised                                                                    -                     -
     Expired/Forfeited                                                        (6,564)               10.63
                                                                   -------------------   -------------------
   Balance at December 31, 2006                                               76,257       $         2.73
                                                                   -------------------   -------------------
   Weighted average fair value of warrants granted:
            2006                                                     $          0.08
                                                                   -------------------
            2005                                                     $         29.84
                                                                   -------------------
</TABLE>


The following summarizes  information about warrants outstanding at December 31,
2006:

<TABLE>
<CAPTION>

                                                Warrants Outstanding                                   Warrants Exercisable
                           ----------------------------------------------------------------    -------------------------------------
                                                        Weighted
                                                         Average              Weighted                                  Weighted
                                 Number of              Remaining             Average               Number              Average
         Exercise                 Shares               Contractual            Exercise                of                Exercise
          Price                 Outstanding           Life (Years)             Price                Shares               Price
   --------------------    ---------------------   -------------------   ------------------    -------------------------------------
<S>                        <C>                     <C>                   <C>                   <C>                     <C>
    $0.17                                70,587            0.9              $         0.17             70,587                 $0.17
    $10.63 - $34.00                       5,670            1.1              $        21.76              5,670                 21.76

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

                                         76,257                             $        2.73              76,257                 $2.73
                           =====================                         ==================    =====================================
</TABLE>


The fair value of each  warrant  granted  during  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 250%,  (iii)
weighted  average risk free interest rate of 5.0% and (iv) average expected life
of 1 year.

The fair value of each  warrant  granted  during  2005 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 175%,  (iii)
weighted  average risk free interest rate of 3.9% and (iv) average expected life
of 3 year.


NOTE 7 - INCOME TAXES
---------------------

At December 31, 2006,  the Company had  approximately  $9,916,000 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 2026.  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,  2006,  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 $1,202,000 and $1,989,000 during the
years ended December 31, 2006 and 2005, respectively.

F-19

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

Deferred tax assets consist of the following at December 31, 2006:



            Net operating loss carry forwards          $        3,867,000
            Less valuation allowance                           (3,867,000)
                                                        -----------------

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

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,
2006 and 2005:
                                                          2006          2005
                                                       ---------     ---------
    Computed benefit at federal statutory rate             (34)%         (34)%
    State income tax benefit, net of federal effect         (6)%          (6)%
    Increase in valuation allowance                         42%           38%
    Other                                                   (3)%           2%
                                                       ---------     --------
                                                             -             -
                                                       =========     =========

NOTE 8 - 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.

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

During 2004, the Company entered into  employment  agreements with two officers.
Effective  November 28, 2005, the Company  terminated  the employment  agreement
with the CEO, pursuant to the termination  provisions  within the contract.  The
remaining employment with the CFO is

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)
--------------------------------------------------

in through  September 2006 and continues in effect from year to year  thereafter
unless  otherwise  terminated,  pursuant to the terms of such  contract.  Future
annual minimum payments under this employment  agreement  approximate  $144,000,
with potential annual increases, as defined. In connection with these employment
agreements,  the Company  issued  options in 2004 to purchase  an  aggregate  of
117,647 shares of common stock (see Note 6).

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

F-20

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For The Years Ended December 31, 2006 and 2005

Consulting Agreements

In December  2006,  the Company  executed a two year  Consulting  Agreement  for
broker relations. The two year agreement is renewable and cancellable with sixty
(60) notice of termination. The service was paid in advance with the issuance of
117,647 restricted common shares at $0.51 per share.

In October  2004,  the Company  entered into  consulting  agreements  with three
stockholders.  Such agreements were in effect through June 2005 and provided for
aggregate monthly consulting fees of $36,000.  In connection with the consulting
agreements,  the Company  issued  options to purchase  an  aggregate  of 176,470
shares of common stock (see Note 6).

Operating Leases

The Company leases its facilities under cancelable  operating lease  agreements.
The leases  expire on various  dates through July 2006 and provide for aggregate
monthly rents of approximately $700. Rental expense for the years ended December
31, 2006 and 2005 was approximately $15,805 and $127,000, respectively.

NOTE 9 - SUBSEQUENT EVENTS (unaudited)
--------------------------------------

In January  2007 the Board of  Directors  approved a new 2007 Stock  Option Plan
(the "Plan") of  NexHorizon.  The Plan has reserved  1,100,000  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,  holders of 566,667  shares of Series A  Preferred  Stock and
144,444  shares  of Series C  Preferred  Stock  converted  such  shares  into an
aggregate of 3,406,667 shares of common stock.

In January 2007, the Company changed its name to NexHorizon Communications, Inc.
and  affected a one for eight and  one-half  reverse  stock  split of its common
stock  and a one for four and  one-half  reverse  stock  split of its  preferred
stock. The financial  statements  presented herein have been restated to reflect
the reverse stock splits as if they had occurred at the beginning of each period
presented.

In the first quarter of 2007 the Company settled $7,832 of accounts payable with
the issuance of 29,612 restricted common shares at an average price of $0.26 per
share.

On February 1, 2007,  the Company  issued  387,002  shares of restricted  common
stock to STN for a note  receivable  in the  amount  of  $146,200.  STN used the
common stock to acquire 13 rural Colorado cable TV systems.  Upon the closing of
the Merger, the note receivable will be eliminated upon consolidation.

In April 2007,  the  Company  prepared  an  Offering  Memorandum  to raise up to
$1,000,000.  The Company is selling units at $2,000 for 10,000 restricted common
shares plus Class A and Class B warrants at $.40 and $.75,  respectively.  As of
April  16,  2007,  the  Company  has not  sold  any  units  under  the  Offering
Memorandum.

F-21

<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 17, 2007                   By: /s/ Calvin D. Smiley, Sr.
                                            -------------------------
                                            Calvin D. Smiley, President
                                            and Chief Executive Officer

Date:  April 17, 2007                   By: /s/ Daniel M. Smith
                                            -------------------
                                            Daniel M. Smith, Chief Financial
                                            Officer 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 17, 2007                   By: /s/ Calvin D. Smiley, Sr.
                                            -------------------------
                                            Calvin D. Smiley, President,
                                            Chief Executive Officer and Director

Date:  April 17, 2007                   By: /s/ Daniel M. Smith
                                            -------------------
                                            Daniel M. Smith, Chief Financial
                                            Officer, Executive Vice President
                                            and Director



Date:  April 17, 2007                   By: /s/ John T. Conroy
                                            ------------------
                                            John T. Conroy, Director



Date:  April 17, 2007                   By: /s/ Gregory J. Liptak
                                            ---------------------
                                            Gregory J. Liptak, Director







                                       28