**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





**[X]
      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**





**FOR
      FISCAL YEAR ENDED DECEMBER 31, 2006**








**SATELLITE
      NEWSPAPERS CORP.**


(Name
      of
      small business issuer in its charter)








**Nevada**
            
            **88-0390828**(State
                or other jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer Identification Number)








**Bank
      of America Building**


**980
      Post Road East**


**Westport,
      Connecticut 06880**


(Address
      of principal executive offices) (Zip Code)





**203
      401 8089**


(Issuer’s
      telephone no.)





Securities
      registered pursuant to Section 12(b) of the Exchange Act:
None





Securities
      registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.001
      par value





Check
      whether the issuer  (1) has filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days.Yes  No






Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B not contained in this form, and no disclosure will be contained,
      to the best of the 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. 





Issuer
      had revenues of $1,671,954 for the year ended December 31, 2006. As of April
      17,
      2007 423,477,518 Shares of Common Stock were outstanding of which 190,413,603
      were held by non-affiliates of the Company. The aggregate market value of the
      Common Stock held by non-affiliates of the Company as of April 17, 2007 was
      $209,454.96 (based upon the closing bid price on such date on the OTCBB of
      $0.0011)





Transfer
      Agent:                                           Signature
      Stock Transfer Inc.


2301 Ohio Drive – Suite 100


Plano, TX 75093





**SATELLITE
      NEWSPAPERS CORP.**




**FORM
      10-KSB**





**TABLE
      OF CONTENTS**





**Item
                #**
            
            **Description**
            
            **Page Numbers**PART
                IITEM
                1.
            
            Business
                of the Company
            
            1ITEM
                2.
            
            Properties
            
            5ITEM
                3.
            
            Legal
                Proceedings
            
            5ITEM
                4.
            
            Submissions
                of Matters to a Vote of Security
                Holders
            
            5PART
                IIITEM
                5.
            
            Market
                for Registrant’s Common Equity, Related Stockholder
                Matters, and Issuer Purchases of Equity Securities
            
            6ITEM
                6.
            
            Management’s
                Discussion and Analysis of Financial Condition
                and Results of Operations
            
            9ITEM
                7.
            
            Financial
                Statements and Supplementary
                Data
            
            10ITEM
                8.
            
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            
            28ITEM
                8A.
            
            Controls
                and Procedures
            
            28ITEM
                8B.
            
            Other
                Information
            
            28PART
                IIIITEM
                9.
            
            Directors,
                Executive Officers, Promoters and Control
                Persons: Compliance with Section 16(A) of the Exchange
                Act
            
            29ITEM
                10.
            
            Executive
                Compensation
            
            30ITEM
                11.
            
            Security
                Ownership of Certain Beneficial Owners and
                Management.
            
            31ITEM
                12.
            
            Certain
                Relationships and Related
                Transactions
            
            31ITEM
                13.
            
            Exhibits
                and Reports on Form 8-K
            
            32ITEM
                14.
            
            Principal
                Accountant Fees and Services
            
            32Signatures
            
            33









**PART
        I**
 
 **ITEM
        1                      BUSINESS
        OF THE COMPANY**
 
 **INTRODUCTION**
 
 **FORWARD-LOOKING STATEMENTS**; This annual report contains certain
        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 that involve risks and uncertainties. In addition, Satellite
        Newspapers Corp., (formerly Satellite Enterprise Corp) (the “Company”), may from
        time to time make oral forward-looking statements. Actual results are uncertain
        and may be impacted by many factors. In particular, certain risks and
        uncertainties that may impact the accuracy of the forward-looking statements
        with respect to revenues, expenses and operating results include without
        imitation; cycles of customer orders, general economic and competitive
        conditions and changing customer trends, technological advances and the number
        and timing of new product introductions, shipments of products and components
        from foreign suppliers, and changes in the mix of products ordered by customers.
        As a result, the actual results may differ materially from those projected
        in
        the forward-looking statements.
 
 Because
        of these and other factors that may affect the Company’s operating results, past
        financial performance should not be considered an indicator of future
        performance, and investors should not use historical trends to anticipate
        results or trends in future periods.
 
 
 **SUMMARY**
 
 In
        October 2006, Satellite Newspapers Suisse GmbH, Satellite Newspapers Content
        GmbH, Satellite Newspapers Trading GmbH, the Swiss operating company’s of
        Satellite, ceased operations.  The Companys were not able to raise
        additional funds to finance their daily operations, while the revenues of
        these
        Companys were not enough to cover their expenses.  On January 23, 2007, the
        Swiss entities were declared bankrupt by the Swiss authorities.
 
 Due
        to
        the above circumstances, Satellite Newspapers Corporation changed its strategic
        direction, and is in the process of changing its name to European Equity
        Holding Corp.  As of April 17, 2007, the new name is not
        yet effective.
 
 European
        Equity Holding Corp.'s primary business focus will be acquisition,
        management and project development of commercial real estate properties for
        the
        elderly care industry.
  
 **PRIOR
        HISTORY OF SATELLITE**
 
 The
        Company was formed as a Nevada corporation on April 14, 1998, to operate
        as a
        specialty retailer of fine jewelry.  In its fiscal year ending June 30,
        2000, the Company sold a limited quantity of jewelry through direct mail
        and
        word of mouth advertising.
 
 On
        July
        29, 2000, subsequent to the close of its June 30, 2000 fiscal year, the Company
        acquired 100% of the outstanding shares of GreenVolt Corp., an Ontario
        Corporation (“GreenVolt”) in a stock for stock exchange.  GreenVolt was in
        the process of developing fuel cell technologies for commercial and industrial
        use.  In connection with this transaction, management of the Company
        changed, and the Company disposed of its retail jewelry  business in
        September 2000, by transfer of  all jewelry  assets and
        liabilities to Larry Beck, a former director of the company.  In connection
        with such transaction, the Company changed its name from Beck & Co., Inc. to
        GreenVolt Power Corp.
  1
  On
        August 27, 2002, Satellite Holdings, Ltd., a corporation organized under
        the
        laws of Turks & Caicos, acquired 13,783,740 shares of the Company’s common
        stock from Thomas L. Faul. Such shares represented approximately 53% of the
        issued and outstanding common stock of the Company. Mr. Faul resigned as
        the Company’s sole officer and director, after appointing Robert Hodge as the
        Company’s new President and CEO, and as Chairman of the Board of
        Directors.  In addition, in exchange for the release by Faul of the Company
        for various claims, the Company transferred its wholly owned subsidiary,
        GreenVolt Corp., to Faul.
 
 On
        August
        28, 2002, the Board of Directors of the Company resolved to change the name
        of
        the Company to Satellite Enterprises Corp., and on September 15, 2002, the
        Company completed a one-for-one-hundred reverse stock split (the “Reverse Stock
        Split”) of its outstanding common stock.
 
 During
        fiscal year 2003, the Company concentrated its efforts on maintaining its
        corporate status and seeking a merger candidate.
 
 On
        June
        20, 2003, in conjunction with a previously reported change of control of
        the
        Company, the Company entered into a Rights Agreement with Satellite Newspapers
        Worldwide NV, a corporation organized under the laws of the Netherlands
        (hereinafter “Satellite Newspapers”). Under said Rights Agreement, Satellite
        Newspapers appointed the Company as it’s irrevocable commercial exclusive
        distributor to promote the sale and/or lease of its newspaper Kiosks
        (hereinafter “KiOSK) and the associated Satellite newspaper content distribution
        technology for which Satellite Newspapers has developed the technology, owns
        the
        patents, engineering and technical design. These Rights include the exclusive
        rights to use the trade names, logos and other trade designations, including,
        but not limited to, all rights to the Satellite Newspapers derived content
        fed
        into the territory granted therein to the Company and the names “Satellite
        Newspapers” devices or variants thereof as a corporate or trade name of
        Satellite Newspapers. These Rights also include the exclusive rights to
        distribute all available contents of its KiOSKs in its territory which includes
        all of North, Central and South America including but not limited to Mexico,
        the
        United States and all its territories, and all the Caribbean Islands, including
        the existing inventory of prototype and placebo units of its KiOSKs in the
        Americas. The Rights further include all parts and supply inventory owned
        by
        Satellite Newspapers relating to its KiOSKs in said territory.
 
 In
        October 2003, Satellite Newspapers took a different direction. Satellite
        Newspapers sold their patents, software and trademarks to Media Finance en
        Suisse Holding GmbH, a Swiss corporation (hereinafter “Media Finance”).
        Thereafter, Media Finance set up an operating subsidiary, Satellite Newspapers
        Suisse GmbH, a Swiss corporation (hereinafter “Satellite Swiss”). Media Finance
        granted Satellite Swiss a twenty-year exclusive license to distribute all
        satellite derived contents for the purpose of commercializing their product
        under a revenue sharing arrangement.
 
 On
        November 26, 2003, the Company entered into a Stock Purchase Option Agreement
        dated November 26, 2003 with Media Finance for the purchase of 100% of Satellite
        Swiss. This option agreement allowed the Company to acquire the right to
        purchase 100% of the shares of common stock of Satellite Swiss. On February
        15,
        2004, the Company exercised the option and acquired 100% of Satellite Swiss
        in
        consideration for the issuance of 126,000,000 shares of common
        stock.
 
 On
        December 19, 2003, as part of the Company’s desire to obtain Satellite Swiss,
        Roy Piceni, founder of Satellite Newspapers and whose family owns 100% of
        Media
        Finance was elected the Company’s chairman of the board and as its
        president.
 
 Satellite
        Swiss consisted of two subsidiaries, Satellite Newspapers Content BV a Dutch
        corporation that negotiated agreements with newspapers throughout the world
        for
        the rights to distribute their content and Satellite Newspapers Trading BV
        which
        had the production rights to produce and sell the KiOSKs.
 
 On March 11, 2004 the Company amended its Articles of Incorporation whereby
        the
        authorized number of shares of common stock were increased from 200,000,000
        to
        500,000,000 and thereafter declared a 3-for-1 stock split effective in the
        form
        of a 200% stock dividend payable on or about March 31, 2004 to shareholders
        of
        record as of March 22, 2004 thereby increasing its issued shares as of that
        date
        to 197,887,545.
  2
  On
        August
        31, 2004, the Company entered into an agreement to acquire a 52% interest
        in
        SoliDAM, a software development company located in the Netherlands. The purchase
        price consisted of the issuance of a $125,000 note payable to the
        stockholders of SoliDAM as well as 919,926 shares of the Company’s stock. 
On September 15, 2005, the Company and the shareholders of SoliDAM decided
        that
        the acquisition of SoliDAM was not in the best interests of either party.
         It was mutually agreed to unwind the transaction.  Accordingly the
        shareholders of SoliDAM returned the 919,926 shares of the Company’s common
        stock and released the Company from its note obligation in the amount of
        $125,000.
 
 In
        June
        2005, Swiss Satellite incorporated two new Swiss subsidiary entities. Satellite
        Newspapers Content GmbH and Satellite Newspapers Trading GmbH. Except for
        the
        Development and Network Management, the Swiss Companies took over all activities
        from the Dutch Companies.
 
 On
        November 30, 2005, the Company changed its name from Satellite Enterprises
        Corp.
        to Satellite Newspapers Corp. In addition, effective November 30, 2005, the
        Company’s quotation symbol on the OTC Bulletin Board changed from SENR to
        SNWP.
 
 On
        December 5, 2005, Mr. Roy Piceni resigned as Chief Executive Officer of the
        Company. On December 5, 2005, the Board of Directors appointed Ms. Jerri L.
        Palmer as the new Chief Executive Officer of the Company.
        Mr. Piceni continued to serve as the Chairman of the Board of
        Directors.
 
 On
        March
        31, 2006, the Company’s subsidiary Swiss Satellite entered into a binding
        Secured Purchase Agreement which closed on the same date with Media Finance
        en
        Suisse Holding GmbH whereby the Company sold $2,700,000 original principal
        amount of its Series A Premium Secured Convertible Debenture and its two
        Dutch
        subsidiaries Satellite Newspapers Content BV and Satellite Newspapers Trading
        BV.
 
 Media
        Finance en Suisse Holding GmbH paid for the Debentures and the two subsidiaries
        when it was transferred to Swiss Satellite with all its validity issued and
        subsisting Intellectual Properties, such as patents to the manufacture of
        the
        KiOSKS that was owned by Media Finance en Suisse Holding GmbH. With this
        transaction, the twenty-year exclusive license distribution agreement with
        Media
        Finance had ended and the Company was free from its monthly fee obligation,
        since the Company now owned these rights.
 
 On April
        2006, the Company has ended the Regional Distribution Agreements with 4 of
        its 5
        contracted Regions. As of that date the Company was working directly with
        the various individual dealers in the various countries. This allowed the
        Company to skip the process of dealing through another layer and thereby
        allowed
        the Company to realize greater revenues and better direct communication with
        its
        ultimate users.
 
  **THE
        BUSINESS OF THE COMPANY – AS OF DECEMBER 31, 2006**
 
 On
        May
        19, 2006, Ms. Jerri Palmer resigned as Chief Executive Officer of the
        Company for personal reasons.  She was unable to relocate to Europe where
        the operating companies were located.  Mr. Roy Piceni, the
        company's chairman of the board took over the functions of Ms. Palmer as
        Chief Executive Officer.
 
 On
        June
        28, 2006, Media Finance en Suisse Holding GmbH converted $2,100,000 of its
        convertible debentures into preferred Stock of the Company.  This preferred
        stock will be converted into Common Stock after the Company’s 1 for 50 Reverse
        Stock is declared effective.
 
 On
        October 1st,
        2006, Satellite Newspapers Suisse GmbH, Satellite Newspapers Content GmbH,
        Satellite Newspapers Trading GmbH, the Swiss operating company’s of Satellite,
        ceased operations. The Company’s were not able to raise additional funds to
        finance their daily operations, while the revenues of these Company’s were not
        sufficient to cover their expenses.
 
 On
        January 23, 2007, Swiss Satellite Newspapers was officially declared bankrupt
        by
        the court in Zug, Switzerland.
 
 On
        March
        27, 2007, The Board of Directors and majority of its shareholders approved
        to
        accept subject to due diligence by all parties the March 21, 2007 Memorandum
        Agreement executed with International Creative Property Belgium NV and
        Andreas Yanakopoulos, an operator and provider of elderly care services in
        Belgium. Under the Agreement, Satellite Newspapers agrees to purchase from
        ICPB
        in phase one, six properties, totally valued at € 24,515,250.00 and with a net
        value of € 11,714,500.00.
  3
  **THE
        BUSINESS AND ITS OBJECTIVES**
 
 The
        Company's primary business focus will be acquisition, management and
        project development of commercial real estate properties, for the elderly
        care
        industry.
 
 The
        Company envisions that in the next 5 years the entire elderly care market
        will change and slowly be taken over by the public sector which only controls
        20% today.  Due to the current situation, the Company believes that
        its properties will always have elderly tenants, which explains why new funds,
        institutions and large property groups are moving in this sector seeking
        a 5-6%
        yield.  Tenants, large and small, in good financial standing or not, become
        secondary to the value of the license that the building will have.
 
 The
        Company aims to create a prominent Belgian real estate investment portfolio
        and to become a developer and operator of Elderly Care Services in specific
        purpose build commercial real estate properties within Belgium.
 
 The
        Company intents to grow its business by acquiring or constructing additional
        Elderly Care Residences in Belgium.  There is a strong demand in Belgium
        for the Elderly Care Residences, increased by many major investment groups
        leaving the office market and entering the Elderly Care Residence market.
        Prices have increased by up to 100% since last year as a consequence.  At
        present investment groups are buying at a yield of 5%.  On our valuation we
        use a yield of 6%.  We have some more acquisitions agreed on existing
        Elderly Care Residences plus options on some to be built. Another major cause
        of
        the rapid increase in prices in the Elderly Care Residences market has been
        a
        government policy which has stopped the issuing of new licenses for Elderly
        Care
        Residences until 2011.  Antwerp is one of the few areas where, in special
        circumstances (i.e. The care centre in Antwerp Linker Oever) a new license
        has
        been issued.  New developments with licenses are therefore very valuable,
        because purpose built houses can command higher rents.  Lastly new
        regulations and severe inspections from the ministry of health have pushed
        small
        operators to close down. You require at least 76 beds to survive and about
        120
        to become profitable.  This year only, about 35 small Elderly Care
        Residences will had to close in Antwerp adding another 1000 people to the
        16.000
        elderly waiting list today.  Our close relation with the tenants, the
        operators of Elderly Care Residences, gives us a good view of the market
        while
        acquisitions are closely related to the tenants need for specific
        expansion.
 
 the
        Company aims to have 3000 beds under its management within the next 5 years
        of
        operation.  Growth will be realized through mergers, the acquisition of
        existing operators and by the construction of new houses.  Expansion of the
        operation will lead to economy of scale in all aspects of the business, catering
        (a saving of 40% on current costs), medication, cleaning, maintenance etc..
        By
        consolidating all operators under one management team, we will be able to
        contain costs and rents for the patients. Simultaneously the company will
        be in
        a position to provide more specialized care while increasing its
        profitability.  After consolidation we will become the biggest operator and
        owner of Elderly Care Residences in Belgium
 
 
 **MARKET
        INFORMATION AND ANALYSIS**
 
 At
        present in Belgium there is a big shortage of care centers for the
        elderly.  This shortage exists at all levels of care in Belgium. 
Large waiting lists exist and demographic surveys indicate a rapidly ageing
        population, increasing the demands for care.  The Belgium government
        calculated a shortage of Elderly Care Residence beds of more than 20.000
        beds in
        2007.   For example in the city of Antwerp alone there is a shortage
        of 8000 Elderly Care Residence beds and 6000 service flats.  Our aim is to
        create another 2000 new places within 2008.  Not only trying to minimize
        the problem but also to change the ways the operation of such houses are
        run
        today.  This expansion will be privately financed and will help to ease the
        current shortage of beds.  By constructing new purpose built facilities
        with all the latest technology, a pleasant environment will be created for
        the
        elderly.  By creating a better safer environment where people get at ease
        with there last years of their lives, inserting new animation facilities,
        research programs, bespoke new buildings we strongly believe we will make
        a
        difference.
 
 Our
        Company only targets the middle class sector and believes that the upper
        class
        always finds their way, while the lower part of the market is the governments’
responsibility.  There is a huge waiting list on our buildings which will
        only grow.  We will be one of the leading operators in the Belgium market
        in the provision care for the elderly.  We pride ourselves in the
        comfortable environment that we can create and in the high standard of the
        service and quality of care we will offer.  Through consolidation,
        centralized management and economy of scales we can provide better and more
        efficient care while increasing profitability. The operation presently is
        managed by non profit organizations as well as other companies.  In
        total the company we are working to acquire controls 13 operators which are
        currently operating 489 beds. Being 1.5% market share in Belgium and 7.5%
        of
        Antwerp.
  4
  **COMPETITION**
   Except
          for the Caritas group, a non profit company which manages over 300 institutions
          in Flanders, there are no large groups with thousands of beds. Caritas
          controls
          approximately one third of the market, as much as the public homes for
          the
          elderly which mostly are owned by the OCMW (Belgian Public Services for
          Wellbeing). The market of privately owned homes for the elderly accounts
          for one
          third of the total market in Belgium. In Flanders the private sector has
          less
          market share than in Wallonie: approximately 20% of the homes for the elderly
          and 14% of the beds.
  Because of the demographics, the population of 80+ between 2000 and 2010
          will
          increase with 40%. The demand grows and on top of that the level of service
          and
          care is rising. According to the Flemish government there is a shortage
          of
          13.000 beds. In almost every home for the elderly in Flanders there is
          a waiting
          list. This list can increase to several years. The fragmentation is this
          segment
          is huge. But there are some initiatives to come to the process of
          enlargement.
  The Dutch/Belgian investment fund Waterland Private Equity with the Senior
          living group a total of 7 institutions with 1100 beds. This was accomplished
          in
          three years and grows steadily. At this moment the Senior Living Group
          has two
          more institutions in development. This represents a mere 1% of the market,
          but
          makes Senior Living Group the biggest one in the private sector. An other
          company Restel controls 1000 beds and Van den Brande 700 beds.
  Consolidation opportunities are huge, because it is hard to survive
          independently for smaller institutions, with fewer than 50 beds. They have
          large
          fixed costs, while the number of occupants varies. The income varies as
          well,
          because the Riziv subsidizes by the number of occupants. The CCB group
          is
          consolidating in the year 2007, at the best possible moment. With current
          control of 1040 growing to over 2000 beds and 500 service flats in the
          year 2009
          makes CCB easy the largest operator in Belgium.
 **ITEM
        2                      DESCRIPTION
        OF PROPERTIES**
 
 We
        lease
        our office space on a rent free basis, which are located at the office of
        our
        General Counsel Jerry Gruenbaum at Bank of America Building, 980 Post Road
        East,
        Westport, Connecticut 06880.
   **ITEM
        3                      LEGAL
        PROCEEDINGS**
 
 From
        time
        to time, the Company is a party to litigation or other legal proceedings
        that we
        consider to be part of the ordinary course of our business. Except for the
        following, we are not involved currently in legal proceedings that could
        reasonably be expected to have a material adverse effect on our business,
        prospects, financial condition or results of operations:
 
 On
        May
        2004, Fred de Vries and Renato Mariani filed suit in the Fifteenth Judicial
        Circuit Court located in Palm Beach County, Florida, claiming breach of
        employment agreements against the Company and against the Company’s CEO claiming
        fraud. The parties were seeking monies and benefits owed in connection with
        their employment agreements as well as other damages.
 
 On
        March
        19th, 2007
        the
        Company entered into a written Settlement and Release Agreement with DeVries
        and
        Mariani whereby in consideration of payment by the Company to DeVries and
        Mariani the combined sum of $150,000.00, DeVries and Mariani agreed to
        accept said payment and upon receiving full payment from the Company, to
        release
        and discharge the Company and all current and former principals, officers,
        agents, attorneys, employees, heirs, administrators, executors, successors
        or
        assigns and/or representatives of the Company, from any and all judgments,
        agreements, claims, demands, claims of action, known or unknown, which DeVries
        and/or Mariani may claim against the Registrant including but not limited
        to the
        One Million Four Hundred Forty Thousand ($1,440,000.00) U.S. Dollars outstanding
        judgment in the Fifteenth Judicial Circuit Court located in Palm Beach County,
        Florida, claiming breach of employment agreements against Satellite and against
        the Company’s CEO claiming fraud.
  The
        Company paid to DeVries and Mariani $75,000.00 and has agreed that it will
        bank wire to DeVries and Mariani on or before 4:00PM eastern standard time
        on
        Tuesday, the 19th day of
        July, 2007
        the remaining $75,000.00 of the total combined sum
        of $150,000.00.
 
 The Company may become involved in material legal proceedings in the
        future.
 
 
 **ITEM
        4                      SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 No
        matters were submitted to a vote of the Company’s security holders through the
        solicitation of proxies or otherwise, during the last quarter of the fiscal
        year
        ended December 31, 2006.
  5
 
 PART
        II
  **ITEM
          5.              
**MARKET
          FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
          OF EQUITY SECURITIES****
  **Market
        Information**
 
 Our
        common stock has been quoted on the OTC Bulletin Board since August 2002.
        Our
        symbol is “SNWP”. For the periods indicated, the following table sets forth the
        high and low bid prices per share of common stock. These prices represent
        inter-dealer quotations without retail markup, markdown, or commission and
        may
        not necessarily represent actual transactions.
 
 **HIGH**
              
              **LOW****FISCAL
                  YEAR ENDED DECEMBER 31, 2005**First
                  Quarter
              
              0.260
              
              0.13Second
                  Quarter
              
              0.170
              
              0.06Third
                  Quarter
              
              0.235
              
              0.03Fourth
                  Quarter
              
              0.145
              
              0.07**FISCAL
                  YEAR ENDED DECEMBER 31, 2006**First
                  Quarter
              
              0.11
              
              0.013Second
                  Quarter
              
              0.006
              
              0.006Third
                  Quarter
              
              0.009
              
              0.0025Fourth
                  Quarter
              
              0.006
              
              0.0023**FISCAL
                  YEAR ENDED DECEMBER 31, 2007**First
                  Quarter
              
              0.019
              
              0.0002
 
 As
        of
        April 17, 2007, there were 423,477,518 shares of common stock
        outstanding.
 
 As
        of
        April 17, 2007, there were approximately 509 stockholders of record of our
        common stock. This does not reflect those shares held beneficially or those
        shares held in “street” name.
 
 
 **Securities
        Authorized for Issuance Under Equity Compensation Plans**
 
 As
        of the
        year ended December 31, 2006, we did not have an equity compensation plan
        authorizing us to issue shares of common stock
 
 **Dividends**
 
 It
        has
        been the policy of the Company to retain earnings, if any, to finance the
        development and growth of its business.
 
 6
 **Sale
        of Securities that were not Registered Under the Securities Act of
        1933**
 
 The
        Company sold the following shares of common stock during the three fiscal
        years
        ended December 31, 2005 (adjusted to reflect reverse stock splits and share
        issuances through April 15, 2005) without registration based on Regulation
        S or
        Section 4(2) of the Securities Act of 1933, as amended. All of the offerings
        were conducted solely by the Company, without the engagement of an
        underwriter.
 
 On
        November 26, 2003, we entered into a Stock Purchase Option Agreement dated
        November 26, 2003 with Media Finance for the purchase of 100% of Swiss Satellite
        Newspapers. This option agreement allowed us to acquire the right to purchase
        100% of the shares of common stock of Swiss Satellite Newspapers. On February
        15, 2004, we exercised the option and acquired 100% of Swiss Satellite
        Newspapers in consideration for the issuance of 126,000,000 shares of common
        stock.
 
 On
        February 9, 2004, we entered into a private placement of securities under
        Regulation S or Section 4(2) of the Securities Act of 1933, as amended for
        the
        sale of 1,348,321 common shares for foreign purchasers for approximately
        $269,664. The Company solely conducted the offering, without the engagement
        of
        an underwriter; however, the Company paid a 10% commission to Bel Air Group,
        Inc. as finders fee.
 
 On
        February 15, 2004, we entered into a private placement of securities under
        Regulation S or Section 4(2) of the Securities Act of 1933, as amended for
        the
        sale of 215,920 common shares for foreign purchasers for approximately $43,184.
        The Company solely conducted the offering, without the engagement of an
        underwriter; however, the Company paid a 10% commission to Bel Air Group,
        Inc.
        as finders fee.
 
 On
        March
        2, 2004, we entered into a private placement of securities under Regulation
        S or
        Section 4(2) of the Securities Act of 1933, as amended for the sale of 562,144
        common shares for foreign purchasers for approximately $112,429. The Company
        solely conducted the offering, without the engagement of an underwriter;
        however, the Company paid a 10% commission to Bel Air Group, Inc. as finders
        fee.
 
 On
        March
        3, 2004, we entered into a private placement of securities under Regulation
        S or
        Section 4(2) of the Securities Act of 1933, as amended for the sale of 67,791
        common shares for foreign purchasers for approximately $13,558. The Company
        solely conducted the offering, without the engagement of an underwriter;
        however, the Company paid a 10% commission to Bel Air Group, Inc. as finders
        fee.
 
 On
        April
        5, 2004, we entered into a private placement of securities under Regulation
        S or
        Section 4(2) of the Securities Act of 1933, as amended for the sale of 169,300
        common shares for foreign purchasers for approximately $33,860. The Company
        solely conducted the offering, without the engagement of an underwriter;
        however, the Company paid a 10% commission to Bel Air Group, Inc. as finders
        fee.
 
 During
        the six months ended June 30, 2004, 6,830,864 shares of common stock were
        sold
        under a private placement agreement with GCH Capital, LTD. The total aggregate
        proceeds received were $409,444.
 
 On
        April
        16, 2004, the Company issued to GCH Capital, LTD 5,000,000 shares of its
        common
        stock valued at $0.01 per share as consideration under the investment banking
        arrangement.
 
 To
        obtain
        funding for our ongoing operations, on May 19, 2004, pursuant to an offering
        conducted under Rule 506 of Regulation D, as promulgated under the Securities
        Act of 1933, we sold 10,869,565 shares of common stock to accredited investors
        in a private offering. In connection with the offering, we sold 10,869,565
        shares of common stock at a price of $.23 per share. In addition, we also
        issued
        10,869,565 common stock purchase warrants exercisable at $1.50 per share.
        We
        raised an aggregate of $2,500,000 in connection with this offering. In November
        2004, we entered into an amendment of the Securities Purchase Agreement whereby
        we cancelled 2,173,913 shares of common stock and issued to the investors
        to the
        investors secured convertible debentures in the amount of $500,000.
 
 On
        October 5, 2004, GCH Capital exercised 4,823,529 of its common stock warrants
        under a cashless/net exercise program.
 
 On
        November 1, 2004, the Company entered into an agreement with GCH Capital
        whereby
        the Company terminated its investment banking relations with respect to the
        private placement offering agreement for its common stock dated November
        11,
        2003. As consideration for terminating the agreement, the Company issued
        6,000,000 shares of its common stock to GCH Capital.
 
 The
        Company entered into an agreement to acquire on August 31, 2004 to acquire
        a 52%
        interest in SoliDAM, a software development company located in the Netherlands.
        The purchase price is to consist of the issuance of a $125,000 note payable
        to
        the stockholders of SoliDAM as well as 919,926 shares of the Company’s common
        stock. If all the conditions set forth in the agreement are satisfied, the
        closing of the transaction will take place in the fourth quarter of 2004.
        On
        October 6, 2004, the shares were issued. The note payable has not been executed
        as of December 7, 2004. The effect of this transaction has not been included
        in
        these financial statements.
 
 On
        September 15, 2005, the Company and the shareholders of SoliDAM decided that
        the
        acquisition of SoliDAM was not in the best interests of either party. It
        was
        mutually agreed to unwind the transaction. Accordingly the shareholders of
        SoliDAM returned the 919,926 shares of the Company’s common stock and released
        the Company from its note obligation in the amount of $125,000.
 
 7
 During
        the third quarter ending September 30, 2005, holders of the 5% convertible
        subordinated debenture converted their holdings to common stock at the
        stipulated conversion rate of $0.23 per share. Accordingly, 521,732 shares
        of
        the Company’s common stock were issued to convert 120,000 convertible
        subordinated debentures.
 
 On
        October 31, 2005, the Board of Directors classified 300,000 of its authorized
        but un-issued shares of preferred stock of the corporation, par value $0.01
        per
        shares as shares of Class A Preferred Stock. Each share of Class A Preferred
        Stock shall be convertible, at the option of the holder of such share, into
        1,000 shares of common stock of the Company at any time that the Company
        is
        authorized to issue such shares.
 
 On
        November 10, 2005, Satellite Enterprise Corp. agreed to sell 10,000 share
        of its
        common stock to GCH Capital, Ltd for $1,000.
 
 On
        November 11, 2005, Mr. Roy Piceni, the President and Chief Executive
        Officer, agreed to convert $1,500,000 of notes payable to him by the Company
        which was loaned to the Company prior to June 30, 2005 into 177,533 shares
        of
        the Company’s Class A Preferred Stock which is convertible into common stock at
        the rate of 1,000 shares of common stock per share of Class A Preferred Stock
        and 22,466,806 shares of common stock of the Company. The Class A Preferred
        Stock will automatically convert to common stock when the certificate of
        incorporation is amended to allow all of the outstanding shares of Class
        A
        Preferred Stock to be converted.
 
 On
        November 11, 2005, Media Finance en Suisse Holdings GmbH, a major shareholder
        of
        the Company, agreed to convert $1,500,000 of notes payable to them which
        was
        loaned to the Company prior to June 30, 2005 into 120,000,000 shares of
        restricted common stock, 80,000 shares of Class A Preferred Stock and loan
        up to
        $500,000 to the company at the Company’s request on or prior to October 30,
        2006.
 
 On
        November 21, 2005, the Company entered into an agreement with GCH Capital,
        Ltd.,
        Palisades Capital, LLC, and Dojo Investments, Ltd, (hereafter, referred to
        as
        the “Investors”) to convert $380,000 of 5% convertible subordinated debentures
        currently outstanding on the Company’s financial statements, exercise the
        outstanding warrants and waive all reset, price protection and anti-dilution
        rights. The Investors purchased the convertible subordinated debentures and
        warrants, as well as all related anti-dilution and reset rights related thereto,
        from the original investors that were part of the 2004 private placement
        agreements, and obtained signed releases from the original investors to release
        the Company from any remaining anti-dilution provisions and reset provisions
        which were part of the 2004 private placement agreements. In
        consideration  for the  conversion of the convertible
        subordinated  debentures, exercise of the warrants and the
        renegotiation of the anti-dilution and reset provisions, the Company agreed
        to
        issue 49,500,000 shares of its common stock to the Investors.
 
 One
        of
        the terms of GCH Capital entering into the agreement was that Media Finance
        en
        Suisse Holding GmbH, as well as Mr. Roy Piceni converted their notes
        payable into shares of common stock.
 
 On
        March
        31, 2006, the Registrant’s subsidiary Satellite Newspapers Suisse GmbH of Zug,
        Switzerland entered into a binding Secured Debenture Purchase Agreement which
        closed on the same date with Media Finance en Suisse Holding GmbH whereby
        the
        Registrant sold $2,700,000 original principal amount of Series A Premium
        Secured
        Convertible Debenture (the “Debenture”) and its two subsidiaries Satellite
        Newspapers Content BV and Satellite Newspapers Trading BV for a total aggregate
        consideration of Two Million Seven Hundred Thousand ($2,700,000) U.S.
        Dollars.
 
 Media
        Finance en Suisse Holdings GmbH paid for the Debentures and the two subsidiaries
        when it transferred to Satellite Newspapers Suisse GmbH all its validly issued
        and subsisting patents relating to the manufacture of the Kiosks, which patents
        are registered in the United States of America bearing registration numbers
        5,860,362 (referred to herein as the “Patents”), and of confidential and
        proprietary know-how relating to the practice of the Patents and to the
        manufacture of the articles described in the Patents that was owned by Media
        Finance en Suisse Holdings GmbH and is valued in excess of Two Million
        ($2,000,000) US Dollars and its current receivables totaling Seven Hundred
        Thousand ($700,000) U.S. Dollars.
 
 The
        Debentures are in the principal amounts of Two Million Seven Hundred Thousand
        ($2,700,000) US Dollars, bear interest at the annual rate of Eight (8%) Percent
        and are convertible into the number of shares of Satellite Newspapers Corp.
        (the
        Registrant) at the conversion rate of $0.005 per share or 50% of the market
        price if the stock trades below $0.005.
 
 On
        June
        28, 2006, Media Finance en Suisse Holding GmbH converted $2,100,000 of its
        convertible debentures into Class A Preferred Stock of the Company. The
        conversion rate of the debenture was $0.0015, being 50% of the closing stock
        price at June 28, 2006. This preferred stock will be converted into Common
        Stock
        after the Company’s 50 to 1 Reverse Stock Split will take effect.
 
 On
        January 12, 2007, Media Finance en Suisse Holding GmbH converted the final
        $600,000 of its debentures into Class A Preferred Stock of the Company. The
        conversion rate used for this conversion was $0.00115, being 50% of the closing
        stock price at January 12, 2007. This preferred stock will be converted into
        Common Stock after the Company’s 50 to 1 Reverse Stock Split will take
        effect.
 
 8
 **ITEM
          6                 
**MANAGEMENT’S
          DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS****
 
 When
        used
        in this Form 10-KSB, in other filings by the Company with the SEC, in the
        Company’s press releases or other public or stockholder communications, or in
        oral statements made with the approval of an authorized executive officer
        of the
        Company, the words or phrases “would be,” “will allow,” “intends to,” “will
        likely result,” “are expected to,” “will continue,” “is anticipated,”
“estimate,” “project,” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private Securities
        Litigation Reform Act of 1995.
 
 The
        Company cautions readers not to place undue reliance on any forward-looking
        statements, which speak only as of the date made, are based on certain
        assumptions and expectations which may or may not be valid or actually occur,
        and which involve various risks and uncertainties, including but not limited
        to
        the risks set forth above. In addition, sales and other revenues may not
        commence and/or continue as anticipated due to delays or otherwise. As a
        result,
        the Company’s actual results for future periods could differ materially from
        those anticipated or projected.
 
 Unless
        otherwise required by applicable law, the Company does not undertake, and
        specifically disclaims any obligation, to update any forward-looking statements
        to reflect occurrences, developments, unanticipated events or circumstances
        after the date of such statement.
 
 **Overview**
 
 On
          October 1st,
          2006, Satellite Newspapers Suisse GmbH, Satellite Newspapers Content GmbH,
          Satellite Newspapers Trading GmbH, the Swiss operating company’s of Satellite,
          ceased operations. The Company’s were not able to raise additional funds to
          finance their daily operations, while the revenues of these Company’s were not
          sufficient to cover their expenses.
 
 On
          January 23, 2007, Swiss Satellite Newspapers was officially declared bankrupt
          by
          the court in Zug, Switzerland.
 
 On
          March
          27, 2007, The Board of Directors and majority of its shareholders approved
          to
          accept subject to due diligence by all parties the March 21, 2007 Memorandum
          Agreement executed with International Creative Property Concepts NV and
          Andreas
          Yanakopoulos, an operator and provider of elderly care services in Belgium.
          Under the Agreement, Satellite Newspapers agrees to purchase from ICPC
          in phase
          one, six properties, totally valued at € 24,515,250.00 and with a net value of €
11,714,500.00.
 **Managements’
        Discussion and Analysis**
 
 **Results
        of Operations – Year Ended December 31, 2006 Compared to Year Ended December 31,
        2005**
 
 **Net
        Sales**
 
 We
        had no
        sales for the year ended December 31, 2006 as compared to $1,671,954 for
        the year ended December 31, 2006. This decrease is aresult of the Company
        ceasing operations in 2006.
 
  **Cost
        and Expenses**
 
 Cost
        and
        expenses for the year ended December 31, 2006 was $1,453,812 as compared
        to
        $675,671 during the year ended December 31, 2005, which consisted of selling,
        general and administrative costs and services. Cost and expenses during the
        year
        ended December 31, 2006 included impairment of technology rights ($784,082),
        selling general and administrative ($468,125), and depreciation and
        amortization ($201,605). This increase in cost and expenses is a result of
        ceasing operations and therefore included the impairment of the technology
        rights.
  Other
        expenses for the year ended December 31, 2006
        consisted of a loss on settlement of debentures ($2,096,226), loss on foreign
        exchange ($201,014), loss on sale of stock ($27,781), and interest expense
        ($188,314).
 
 As
        a
        result of the foregoing factors, we realized a net loss of $3,967,147 for
        the
        year ended December 31, 2006 compared to a net loss of $675,800 for the year
        ended December 31, 2005.
 
 9
  **Liquidity
        and Capital Resources**
 
 At
        December 31, 2006, we had a working capital deficit of ($17,327,202). Further,
        at December 31, 2005 we had a working capital deficit of ($12,087,594), as
        a
        result our auditors have raised, in their current audit report, a substantial
        doubt about our ability to continue as a going concern. We will be unable
        to
        continue as a going concern in the event we are not able to raise capital
        in
        order to develop and implement our business plan and continue operations.
        Until
        such time as sufficient capital is raised, we intend to limit expenditures
        for
        capital assets and other expense categories.
  On
          October 1st,
          2006, Satellite Newspapers Suisse GmbH, Satellite Newspapers Content GmbH,
          Satellite Newspapers Trading GmbH, the Swiss operating company’s of Satellite,
          ceased operations. The Company’s were not able to raise additional funds to
          finance their daily operations, while the revenues of these Company’s were not
          sufficient to cover their expenses.
 
 On
          January 23, 2007, Swiss Satellite Newspapers was officially declared bankrupt
          by
          the court in Zug, Switzerland.
 
 On
          March
          27, 2007, The Board of Directors and majority of its shareholders approved
          to
          accept subject to due diligence by all parties the March 21, 2007 Memorandum
          Agreement executed with International Creative Property Concepts NV and
          Andreas
          Yanakopoulos, an operator and provider of elderly care services in Belgium.
          Under the Agreement, Satellite Newspapers agrees to purchase from ICPC
          in phase
          one, six properties, totally valued at € 24,515,250.00 and with a net value of €
11,714,500.00.
 We will
        still need additional investments in order to execute the terms of the
        March 21, 2007 Memorandum Agreement with International Creative
        Property Belgium NV and Andreas Yanakopoulos. Financing transactions may
        include the issuance of equity or debt securities, obtaining credit facilities,
        or other financing mechanisms. However, the trading price of our common stock
        and the downturn in the U.S. stock and debt markets could make it more difficult
        to obtain financing through the issuance of equity or debt securities. Even
        if
        we are able to raise the funds required, it is possible that we could incur
        unexpected costs and expenses, fail to collect significant amounts owed to
        us,
        or experience unexpected cash requirements that would force us to seek
        alternative financing. Further, if we issue additional equity or debt
        securities, stockholders may experience additional dilution or the new equity
        securities may have rights, preferences or privileges senior to those of
        existing holders of our common stock. If additional financing is not available
        or is not available on acceptable terms, we will have to curtail our operations
        again.
 
 **Cash
        Flows**
 
 Net
        cash
        used in operating activities was ($636,236) for the year ended December 31,
        2006
        and ($1,552,537) for the year ended December 31, 2005. This decrease was
        primarily due to the increase in the net loss.
 
 Net
        cash
        provided by financing activities was $305,518 and $1,207,353 for the year
        ended
        December 31, 2006 and 2005, respectively. The net cash provided by financing
        activities for the year ended December 31, 2006 consisted primarily of loans
        provided by Mr. Piceni.
 
 **Off-Balance
        Sheet Arrangements**
 
 We
        have
        no off-balance sheet arrangements that have or are reasonably likely to have
        a
        current or future material effect on us.
 
 
 **ITEM
        7.                      FINANCIAL
        STATEMENTS.**
 
 
 SATELLITE
        ENTERPRISES CORP.
 
 AUDITED
        FINANCIAL STATEMENTS
 
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2006 and 2005
 
   10
 
 CONTENTSReport
                  of Independent Registered Public Accounting
                  Firm
              Page   F
                  1Consolidated
                  Balance Sheets
              F
                  2Consolidated
                  Statements of
                  Operations
              F
                  3Consolidated
                  Statements of Cash
                  Flows
              F
                  4Consolidated
                  Statement of Stockholders’
                  Deficit
              F
                  6Notes
                  to Consolidated Financial
                  Statements
              F
                  9
 
  
  MEYLER
        & COMPANY, LLC
 CERTIFIED
        PUBLIC ACCOUNTANTS
 ONE
        ARIN
        PARK
 1715
        HIGHWAY 35
 MIDDLETOWN,
        NJ 07748
 
 
 
 Report
        of Independent Registered Public Accounting
        Firm
 
 
 To
        the
        Board of Directors
 Satellite
        Enterprises Corp.
 Amsterdam,
        The Netherlands
 
 We
        have
        audited the accompanying consolidated balance sheets of Satellite Enterprises
        Corp. and subsidiaries  as of December 31, 2006 and 2005 and the
        related consolidated statements of operations, stockholders’ deficit, and cash
        flows for each of the two years in the period ended December 31, 2006. These
        consolidated financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these financial
        statements based on our audits.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform an audit of its internal control over
        financial reporting. Our audit 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
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides 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 the Company as of December
        31, 2006 and 2005, and the results of its operations and its cash flows for
        each
        of the two years in the period ended December 31, 2006, 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 A to the
        consolidated financial statements, the Company has incurred cumulative losses
        of
        $17,327,202 since inception, has negative working capital of $3,901,492 and
        accumulated stockholders’ deficit of $3,901,492 and has ceased operations.
        These conditions raise substantial doubt about its ability to continue as
        a
        going concern. Management’s plans regarding those matters are also described in
        Note A. The financial statements do not include any adjustments that might
        result from the outcome of these uncertainties.
 
 
 /s/
        Meyler & Company,
        LLC
 
 
 Middletown,
        NJ
 April
        15,
        2007
 
  F
            1
  **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **December
                  31,****2006**
              
              **2005**CURRENT
                  ASSETSCash
              
              $
              1,334
              
              $
              37,509Accounts receivable
              
              
              
              
              
              241,002Inventory
              
              
              
              
              
              119,658Total Current Assets
              
              
              1,334
              
              
              398,169EQUIPMENT,
                  net of accumulated depreciation of $398,568 at December 31,
                  2005
              
              
              
              
              
              1,183,472OTHER
                  ASSETSDeposits
              
              
              
              
              
              8,826Technology rights, net of accumulated amortization of $679,372
                  and
                  $339,686 in 2005 and 2004, respectively
              
              
              
              
              
              840,466849,292Total
                  Assets
              
              $
              1,334
              
              $
              2,430,933LIABILITIES
                  AND STOCKHOLDERS’ DEFICITCURRENT
                  LIABILITIESAccounts
                    payable
              
              $
              1,326,620
              
              $
              1,321,768Accrued salaries and related expenses
              
              
              371,107
              
              
              377,164Accrued expenses
              
              
              1,591
              
              
              93,466Notes
                  payable to related parties
              
              
              461,486
              
              
              165,848Loans
                  payable
              
              
              1,899,949
              
              
              3,060,280Total
                  Long-Term Liabilities
              
              
              3,902,826
              
              
              5,018,526STOCKHOLDERS’
                  DEFICITPreferred stock, par value $0.001 authorized 500,000,000 shares,
                  1,657,533
                  and 257,533 Class A
                convertible preferred sharesissued
                  and outstanding at December 31, 2006 and 2005,
                  respectively
              
              
              1,658
              
              
              258Common stock authorized 500,000,000 shares; par value $0.001; issued
                  and
                  outstanding 423,477,518 and 420,477,518 shares at December 31,
                  2006 and,
                  2005, respectively
              
              
              423,478
              
              
              420,478Additional
                  paid-in capital
              
              
              12,949,303
              
              
              8,932,320Accumulated
                  deficit
              
              
              (17,327,202
              )
              
              (12,087,594
              )Accumulated
                  other comprehensive loss
              
              
              51,271
              
              
              146,945Total
                  Stockholders’ Deficit
              
              
              (3,901,492
              )
              
              (2,587,593
              )Total
                  Liabilities and Stockholders’ Deficit
              
              $
              1,334
              
              $
              2,430,933
 
 
 See
        accompanying notes to financial statements.
  F
            2
  
 **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        STATEMENTS OF
        OPERATIONS**
 
 
 **Year
                  Ended December 31,****2006**
              
              **2005**COSTS
                  AND EXPENSESSelling,
                general and administrative
              
              $
              468,125
              
              $
              282,273Impairment of technology rights
              
              
              784,082Depreciation and amortization
              
              
              201,605
              
              
              393,398Total Costs and Expenses
              
              
              1,453,812
              
              
              675,671NET
                  OPERATING LOSS
              
              
              1,453,812
              
              
              675,671OTHER
                  INCOME (EXPENSES)Loss on settlement of debentures
              
              
              (2,096,226
              )Loss on foreign exchange
              
              
              (201,014
              )
              
              (16,896
              )Loss on sale of stock
              
              
              (27,781
              )
              
              154,751Interest expense
              
              
              (188,314
              )
              
              (137,984
              )Total Other Expenses
              
              
              (2,513,335
              )
              
              (129
              )NET
                  LOSS FROM CONTINUING OPERATIONS
              
              
              3,967,147
              
              
              675,800DISCONTINUED
                OPERATIONSLoss
                from discontinued operations (less applicable income taxes of 0)
              
              
              1,873,082
              
              
              1,941,685Gain from the disposal of discontinued operations (less applicable
                income
                taxes of 0)
              
              
              (600,621
              )Loss from discontinued operations
              
              
              1,272,461
              
              
              1,941,685NET
                LOSS
              
              $
              5,239,608
              
              $
              2,617,485NET
                LOSS PER COMMON SHARE (BASIC AND DILUTED)Loss
                from continuing operations
              
              $
              (0.01
              )Loss from discontinued operations
              
              
              
              
              $
              (0.01
              )Net Loss per Common Share
              
              $
              (0.01
              )
              $
              (0.01
              )WEIGHTED
                  AVERAGE COMMON SHARES OUTSTANDING
              
              
              423,477,518
              
              
              273,708,848
 
 
 See
        accompanying notes to financial statements.
  F
            3
  
 **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **Year
                  Ended December 31,****2006**
              
              **2005**CASH FLOWS FROM OPERATING ACTIVITIESNet loss
              
              $
              (5,239,608
              )
              $
              (2,617,485
              )Adjustments to reconcile net loss to cash flows used in operating
                  activities:Loss on sale of stock
              
              
              27,781Loss on disposition of operation of subsidiaries
              
              
              1,272,461Gain on disposition of
                  subsidiaries
              
              
              (600,621
              )Loss on settlement of debentures
              
              
              2,096,226Stock issued for performance contract
              
              
              300,000Depreciation
              
              
              201,605
              
              
              437,489Loss
                  on disposal of equipmentImpairment
                  of technology rights
              
              
              784,082Changes in operating assets and liabilities:Decrease
                in accounts receivable
              
              
              
              
              
              121,358Increase
                in inventory
              
              
              
              
              
              (60,579
              )Increase in accounts payable
              
              
              251,187
              
              
              668,540Increase in accrued expenses
              
              
              126,369
              
              
              (219,523
              )Increase
                  in accrued salaries and related expenses
              
              
              144,282
              
              
              117,663NET CASH FLOWS USED IN OPERATING ACTIVITIES
              
              
              (636,236
              )
              
              (1,552,537
              )CASH FLOWS FROM INVESTING ACTIVITIESCash paid for property and equipment
              
              
              
              
              
              (4,548
              )NET
                  CASH FLOWS USED IN INVESTING
                  ACTIVITIES
              
              
              
              
              
              (4,548
              )CASH
                  FLOWS PROVIDED BY FINANCING ACTIVITIESAdvances
                from notes payable to related parties
              
              
              305,518
              
              
              1,124,831Proceeds
                    from issuance of common stock
              
              
              
              
              
              82,522NET
                  CASH FLOWS FROM FINANCING ACTIVITIES
              
              
              305,518
              
              
              1,207,353EFFECT
                  OF EXCHANGE RATE CHANGES ON CASH
              
              
              294,543
              
              
              340,344DECREASE IN CASH
              
              
              (36,175
              )
              
              (9,388
              )CASH, BEGINNING OF PERIOD
              
              
              37,509
              
              
              46,897CASH, END OF PERIOD
              
              $
              1,334
              
              $
              37,509
 
 
 See
        accompanying notes to financial statements.
  F
            4
  
 **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (CONTINUED)**
 
 
 **Year
                  Ended December 31,****2006**
              
              **2005**SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATIONNoneNON-CASH
                  INVESTING AND FINANCING ACTIVITIESIssuance
                  of common stock for manufacturing consulting on kiosks
              
              $
              300,000Issuance
                  of common stock in payment of accounts payable
              
              
              
              $
              38,816Conversion of 5% subordinated debenture
              
              
              
              
              500,000Conversion
                  of related party debt to common stock
              
              
              
              
              3,000,000Accounts receivableDissolution of subsidiaries
              
              241,002InventoryDissolution of subsidiaries
              
              119,658EquipmentDissolution of subsidiaries
              
              286,243DepositsDissolution of subsidiaries
              
              8,826Technology rightsDissolution of subsidiaries
              
              752,008Accounts payableDissolution
                of subsidiaries
              
              246,335Accrued salaries and related expensesDissolution of subsidiaries
              
              308,266Notes payable to related partiesDissolution of subsidiaries
              
              9,880
 
 
 See
        accompanying notes to financial statements.
 
 
  F
            5
  **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS’
DEFICIT**
 **For
        the Years Ended December 31, 2006 and 2005**
 
  **Accumulated****Additional**
              
              
              
              **Other**
              
              **Total****Preferred
                  Stock**
              
              **Common
                  Stock**
              
              **Paid
                  In**
              
              **Accumulated**
              
              **Comprehensive**
              
              **Stockholders****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Income
                  (Loss)**
              
              **Deficit**Balance
                  at December 31, 2004
              
              
              
              
              
              
              224,248,345
              
              $
              224,249
              
              $
              7,040,096
              
              $
              (9,470,109
              )
              $
              (386,595
              )
              $
              (2,592,359
              )Issuance
                  of shares to convert $120,000 of 5%
                convertible  subordinated debentures @$0.23 per
                  share
              
              
              
              
              
              
              521,732
              
              
              522
              
              
              119,478
              
              
              
              
              
              
              
              
              120,000Conversion
                  of related party debt to equity
              
              177,533
              
              
              178
              
              22,467,007
              
              
              22,467
              
              
              1,477,355
              
              
              
              
              
              
              
              
              1,500,000Conversion
                  of media finance GmbH debt to equity
              
              80,000
              
              
              80
              
              120,000,000
              
              
              120,000
              
              
              1,379,920
              
              
              
              
              
              
              
              
              1,500,000Sale
                  of common stock to GCH Capital @$0.10 per share
              
              
              
              
              
              
              10,000
              
              
              10
              
              
              990
              
              
              
              
              
              
              
              
              1,000Issuance
                  of shares to GCH Capital for their conversion of 5%
                conversion convertible subordinated debentures @$0.23 per
                  share
              
              
              
              
              
              
              1,652,173
              
              
              1,652
              
              
              378,348
              
              
              
              
              
              
              
              
              380,000Issuance
                  of shares to GCH Capital for their purchase of
                2004 underwritten warrants
              
              
              
              
              
              
              47,847,827
              
              
              47,848
              
              
              33,674
              
              
              
              
              
              
              
              
              81,522Issuance
                  of shares to underwriters In settlement of 2004 underwriters
                agreement
              
              
              
              
              
              
              3,730,434
              
              
              3,730
              
              
              (3,730
              )Adjustment
                  from exchange rate changes
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              533,540
              
              
              533,540Net
                  loss for the year ended December 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,617,485
              )
              
              
              
              
              (2,617,485
              )Reversal
                  of investment of Media Finance GmbH in Company
              
              
              
              
              
              
              
              
              
              
              
              
              (1,493,811
              )
              
              
              
              
              
              
              
              (1,493,811
              )Balance,
                December 31, 2005
              
              257,533
              
              
              258
              
              420,477,518
              
              
              420,478
              
              
              8,932,320
              
              
              (12,087,594
              )
              
              146,945
              
              
              (2,587,593
              )Investment
                of Media en Suisse in Company
              
              
              
              
              
              
              
              
              
              
              
              
              1,621,383
              
              
              
              
              
              
              
              
              1,621,383Conversion
                  of convertiblesubordinated
                  Debenture
              
              1,400,000
              
              
              1,400
              
              
              
              
              
              
              
              2,098,600
              
              
              
              
              
              
              
              
              2,100,000Issuance
                of common stock for services rendered
              
              
              
              
              
              
              3,000,000
              
              
              3,000
              
              
              297,000
              
              
              
              
              
              
              
              
              300,000Adjustment
                from exchange rate changes
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (95,674
              )
              
              (95,674
              )Net
                loss for the year ended December 31, 2006
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (5,239,608
              )
              
              
              
              
              (5,239,608
              )1,657,533
              
              $
              1,658
              
              423,477,518
              
              $
              423,478
              
              $
              12,949,303
              
              $
              (17,327,202
              )
              $
              51,271
              
              $
              (3,901,492
              )
 
 
 
 See
        accompanying notes to financial statements.
  F
            6
  **SATELLITE
        ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
        31, 2006**
 
  **NOTE
          A -  THE COMPANY AND NATURE OF BUSINESS**
 
 **Nature
          of Business**
 
 Satellite
          Enterprises Corp., (“Company”) through its wholly owned subsidiary, Satellite
          Newspapers en Suisse GMBH (“Suisse”), was providing newspaper publishers access
          to an advanced methodology of distribution for national, international
          and local
          newspapers.  On October 1, 2006, the Company ceased operating since it
          was not able to finance its daily operations.
 
 The
          Company merged with Satellite Newspapers Suisse GMBH (formerly Media Finance
          en
          Suisse GMBH) under a stock purchase option agreement dated November 26,
          2003
          which was exercised on February 15, 2004. Suisse has two wholly owned companies
          in the Netherlands, Satellite Newspapers Content B.V. (incorporated on
          May 24,
          2001) which negotiates agreements with the newspaper publishers and Satellite
          Newspapers Trading, B.V. (incorporated on May 17, 2001) which markets and
          sells
          vending units known as Kiosks which are used to distribute the digitized
          newspapers.
 
 On
          March
          31, 2006, the Company’s subsidiary, Suisse, sold its two subsidiaries in The
          Netherlands, the technology rights and certain intercompany debt to Media
          Finance en Suisse Holding GMBH (“Holding”) for a $2,700,000 convertible
          debenture bearing interest at 8%.  The convertible debenture is
          convertible into the Company’s common stock.  Holding is a Variable
          Interest Entity. Holding transferred the companies to a private
          individual.  On January 23, 2007, a creditor of Suisse filed an
          involuntary bankruptcy petition for Suisse with the court in Zug,
          Switzerland.  With the bankruptcy of Suisse, the Company no longer has
          any operating activities.
 
 **Reverse
          Merger**
 
 On
          February 15, 2004, the Company exercised its stock purchase agreement to
          merge
          with Suisse and its wholly owned subsidiaries and acquired all of Suisse’s
          outstanding common stock by the issuance of 126,000,000 shares of its $0.001
          par
          value common stock (the “Merger”).  In connection with the Merger,
          Suisse became a wholly owned subsidiary of the Company.   Prior
          to the Merger, Satellite Enterprises Corp. was a non-operating “shell”
corporation.  Pursuant to Securities and Exchange Commission rules,
          the Merger of a private operating company into a non-operating public shell
          corporation with nominal net assets is considered a capital
          transaction.  Accordingly, for accounting purposes, the Merger has
          been treated as an acquisition of the Company by Suisse and a recapitalization
          of Suisse.  The historical financial statements prior to December 31,
          2004 are those of Suisse.  Since the Merger is a recapitalization and
          not a business combination, proforma information is not presented.
 
 Suisse
          was previously owned by Holding, a company wholly owned  by the family
          of the President and Chief Executive Officer of the Holding
          Company.  As part of the merger, an exclusive 20 year world wide
          license was granted to the Company to market and distribute digital
          newspapers.
 
 **Going
          Concern**
 
 As
          shown
          in the accompanying financial statements, the Company has incurred cumulative
          net operating losses of $17,327,202 since inception, has negative working
          capital of $3,901,492, and an accumulated stockholders’ deficit of $3,901,492
          and has ceased operations.  Management’s plans include the attendance
          to the bankruptcy proceedings of its former Swiss operations, the redefining
          of
          its business to potentially acquire elderly care service facilities in
          Belgium
          and the raising of capital through the equity markets for working capital
          and
          acquisitions.  Failure to achieve these objectives will result in the
          Company formerly going out of business.
  F
              7
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
 
 
 **NOTE
          A -  THE COMPANY AND NATURE OF BUSINESS
          (CONTINUED)**
 
 **Going
          Concern (Continued)**
 
 These
          matters raise substantial doubt about the Company’s ability to continue as a
          going concern.  However, the accompanying financial statements have
          been prepared on a going concern basis, which contemplates the realization
          of
          assets and satisfaction of liabilities in the normal course of
          business.  These financial statements do not include any adjustments
          relating to the recovery of the recorded assets or the classification of
          the
          liabilities that might be necessary should the Company be unable to continue
          as
          a going concern.
 
 **NOTE
          B -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Foreign
          Currency Translation**
 
 The
          Company considers the Swiss Franc to be its functional
          currency.  Assets and liabilities were translated into US dollars at
          the year-end exchange rates.  Statement of operations amounts were
          translated using the average rate during the year.  Gains and losses
          resulting from translating foreign currency financial statements were
          accumulated in other comprehensive loss, a separate component of stockholders’
deficit.
 
 **Cash
          Equivalents**
 
 For
          purposes of reporting cash flows, cash equivalents include investment
          instruments purchased with a maturity of three months or less.  There
          were no cash equivalents in 2006 or 2005.
 
 **Use
          of Estimates**
 
 The
          preparation of financial statements in conformity with generally accepted
          accounting principles requires management to make
          estimates  and  assumptions that  affect the
          reported amounts of assets and liabilities 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
          could differ from those estimates.
 
 **Inventories**
 
 Inventories
          are stated at the lower cost or market value.  Cost is determined
          using the first-in, first out (FIFO) method.  Inventories consist
          principally of kiosk machines.
 
 **Net
          Loss Per Common Share**
 
 The
          Company computes per share amounts in accordance with Statement of Financial
          Accounting Standards (“SFAS”) No. 128, “Earnings per Share”.  SFAS No.
          128 requires presentation of basic and diluted EPS.  Basic EPS is
          computed by dividing the income (loss) available to Common Stockholders
          by the
          weighted-average number of common shares outstanding for the
          period.  Diluted EPS is based on the weighted-average number of shares
          of Common Stock and Common Stock equivalents outstanding during the
          periods.
  F
              8
 
 **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
 
 
 **NOTE
          B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**
 
 **Net
          Loss Per Common Share (Continued)**
  The
            Company computes per share amounts in accordance with Statement of Financial
            Accounting Standards (“SFAS”) No. 128, “Earnings per Share”.  SFAS No.
            128 requires presentation of basic and diluted EPS.  Basic EPS is
            computed by dividing the income (loss) available to Common Stockholders
            by the
            weighted-average number of common shares outstanding for the
            period.  Diluted EPS is based on the weighted-average number of shares
            of Common Stock and Common Stock equivalents outstanding during the
            periods.
  **Technology
          Rights**
 
 Technology
          rights are amortized over their estimated useful life of 5 years.
 
 **Consolidated
          Financial Statements**
 
 The
          consolidated financial statements include the Company and its wholly owned
          subsidiaries. All significant intercompany transactions and balances have
          been
          eliminated in consolidation.
 
 **Comprehensive
          Income**
 
 SFAS
          No.
          130 establishes standards for the reporting and disclosure of comprehensive
          income and its components which will be presented in association with a
          company’s financial statements.  Comprehensive income is defined as
          the change in a business enterprise’s equity during a period arising from
          transactions, events or circumstances relating to non-owner sources, such
          as
          foreign currency translation adjustments and unrealized gains or losses
          on
          available-for-sale securities.  It includes all changes in equity
          during a period except those resulting from investments by or distributions
          to
          owners.  Comprehensive income is accumulated in accumulated other
          comprehensive income, a separate component of stockholders’ deficit, in the
          balance sheet.
 
 **Stock
          Based Compensation**
 
 SFAS
          No.
          123(R), which is a revision of the SFAS 123, “Accounting for Stock-Based
          Compensation”, prescribes accounting and reporting standards for all stock-based
          compensation plans, including employee stock options, restricted stock,
          employee
          stock purchase plans and stock appreciation rights.  SFAS No. 123R
          requires employee compensation expense to be recorded using the fair value
          method.
 
 The
          Company accounts for stock issued for services using the fair
          value method. In accordance with Emerging Issues Task Force (“EITF”) 96-18, the
          measurement date of shares issued for services is the date at which the
          counterparty’s performance is complete.
 
 **Revenue
          Recognition**
 
 The
          Company’s policy is to recognize revenue at the time a transaction is completed
          at a local interactive vending unit (Kiosk) located at various sites around
          the
          world.  To manage this global network, the Company has divided the
          network into eight distinct regions with the intent to issue each regional
          distributor rights to market and sell the Company’s product.  Each
          distribution agreement requires a
  F
              9
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
 
 
 **NOTE
          B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**
 
 **Revenue
          Recognition (Continued)**
 
 defined
          monthly minimum fee.  To the extent that revenues generated within the
          region exceed the minimum, no minimum fee would be required and the Company,
          based upon internally generated settlement reports, would compensate the
          distributors.
 
 **Recent
          Accounting Pronouncements**
 
 In
          June 2006, the Financial Accounting Standards Board (“FASB”) issued
          Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48
          defines the threshold for recognizing the benefits of tax return positions
          in
          the financial statements as “more-likely-than-not” to be sustained by the taxing
          authority. Recently issued literature also provides guidance on the
          derecognition, measurement and classification of income tax uncertainties,
          along
          with any related interest and penalties. FIN 48 also includes guidance
          concerning accounting for income tax uncertainties in interim periods and
          increases the level of disclosures associated with any recorded income
          tax
          uncertainties. FIN 48 is effective for fiscal years beginning after
          December 15, 2006.  The Company expects to adopt the provisions
          of FIN 48 beginning in the first quarter of 2007.  The Company is
          currently in the process of determining the impact, if any, of adopting
          the
          provisions of FIN 48 on its financial position, results of operations and
          liquidity.
  In
          September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
          defines fair value, establishes a framework for measuring fair value under
          other
          accounting pronouncements that permit or require fair value measurements,
          changes the methods used to measure fair value and expands disclosures
          about
          fair value measurements. In particular, disclosures are required to provide
          information on the extent to which fair value is used to measure assets
          and
          liabilities; the inputs used to develop measurements; and the effect of
          certain
          of the measurements on earnings (or changes in net assets). SFAS No. 157
          is
          effective for fiscal years beginning after November 15, 2007 and interim
          periods
          within those fiscal years. Early adoption, as of the beginning of an entity’s
          fiscal year, is also permitted, provided interim financial statements have
          not
          yet been issued. The Company expects to adopt the provisions of FIN 48
          beginning
          in the first quarter of 2008.  The Company is currently evaluating the
          potential impact, if any, that the adoption of SFAS No. 157 will have on
          its
          consolidated financial statements.
  In
          September 2006, the Securities and Exchange Commission issued Staff Accounting
          Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when
          Quantifying Misstatements in Current Year Financial Statements” (“SAB No. 108”).
          SAB No. 108 provides guidance on how prior year misstatements should be
          considered when quantifying misstatements in the current year financial
          statements. SAB No. 108 requires registrants to quantify misstatements
          using
          both a balance sheet and an income statement approach and evaluate whether
          either approach results in quantifying a misstatement that, when all relevant
          quantitative and qualitative factors are considered, is material. SAB No.
          108
          does not change the guidance in SAB No. 99, “Materiality,” when evaluating the
          materiality of misstatements. SAB No. 108 is effective for fiscal years
          ending
          after November 15, 2006. Upon initial application, SAB No. 108 permits
          a
          one-time cumulative effect adjustment to beginning retained earnings. The
          Company adopted SAB No. 108 for the fiscal year ended December 31,
          2006.  Adoption of SAB No. 108 did not have a material impact on the
          consolidated financial statements.
  F
              10
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
 
  **NOTE  B
          - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**
 
  **Recent
          Accounting Pronouncements (Continued)**
  In
          February 2007, the FASB issued SFAS No. 159, *The Fair Value Option for
          Financial Assets and Financial Liabilities*(“SFAS 159”).  SFAS 159 allows entities to measure at
          fair value many financial instruments and certain other assets and liabilities
          that are not otherwise required to be measured at fair value. SFAS 159 is
          effective for fiscal years beginning after November 15, 2007. We have not
          determined what impact, if any, that adoption will have on our results
          of
          operations, cash flows or financial position.
  **NOTE
          C - VARIABLE INTEREST ENTITIES**
 
 In
          January 2003, the FASB issued FIN 46 and in December 2003, it issued a
          revised
          interpretation of FIN 46 (FIN 46-R), which supersedes FIN 46 and clarifies
          and
          expands current accounting guidance for determining whether certain entities
          should be consolidated in the Company’s consolidated financial
          statements.  An entity is subject to FIN 46 and is called a Variable
          Interest Entity (VIE) if it has (1) equity that is insufficient to permit
          the
          entity to finance its activities without additional subordinated financial
          support from other parties, or (2) equity investors that cannot make significant
          decisions about the entity’s operations, or that do not absorb the expected
          losses or receive the expected returns of the entity.  A VIE is
          consolidated by its primary beneficiary, which is the party that has a
          majority
          of the expected losses or a majority of the expected residual returns of
          the
          VIE, or both.
 
 The
          Company has concluded that the entity, Media Finance en Suisse Holding
          GMBH
          (“Media Financie”) is deemed to be VIE under FIN 46 and accordingly it has been
          consolidated in the accompanying financial statements. Media Finance, a
          holding
          company, had total assets of $712,797 and $4,024,640, total liabilities
          of
          $2,279,791 and $8,050,323, accumulated deficits of $(1,566,994) and $(693,017)
          at December 31, 2006 and 2005, respectively, and losses of $1,453,553 and
          $799,475 for the years then ended.
 
 **NOTE
          D - EQUIPMENT**
 Equipment is comprised of the following at December 31,
 Molds
                                
                                $
                                1,131,444Kiosks
                                
                                
                                369,492Furniture
                                    and
                                    fixtures
                                
                                
                                81,1041,582,040Less:
                                    accumulated
                                    depreciation
                                
                                
                                398,568$
                                1,183,472
  F
                  11
 
 **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
  **NOTE
          E - LOANS PAYABLE**
 
 The
          balance sheet reflects two loans which are payable to
          individuals.  These loans are unsecured and one is non-interest
          bearing.  The other loan bears interest at the rate of 10% per
          annum.  Both of these loans are part of Media Finance en Suisse GMBH,
          the variable interest entity.  The proceeds of such loans were used to
          finance the Company and to acquire the technology rights. On December 22,
          2006,  one of the individuals accepted shares of Satellite Enterprises
          Corp. common stock held by Media Finance en Suisse GMBH Holding in complete
          satisfaction of their debt in the amount of
          $1,406,913        .  At
          December 31, 2006 and 2005, the loans aggregated $1,899,949 and $3,060,280,
          respectively.
 
 **NOTE  F
          -  RELATED PARTY TRANSACTIONS**
 
 At
          December 31, 2004, $1,436,617 was due to related parties and $1,247,878
          was due
          to individuals.  Of the $1,247,878, approximately $1,107,000 was
          repaid and $140,000 was assumed by Mr. Piceni, the Chief Executive Officer
          and
          majority shareholder increasing his loan balance to approximately
          $1,600,000.  In 2005, Media Finance en Suisse GMBH loaned the Company
          an additional $1,500,000 from investors of Media Finance en Suisse
          GMBH.  This Company is controlled by Mr. Roy Piceni, the Company’s
          Chief Executive Officer.  In October 2005 as part of a debt
          restructuring plan, both Mr. Piceni and Media Finance en Suisse GMBH each
          converted $1,500,000 of debt into common stock of the Company.  At
          December 31, 2005, the balance of indebtedness to related parties aggregated
          $165,848.  In 2006, Mr. Piceni and an individual related to Mr. Piceni
          advanced the Company an additional $295,638.  At December 31, 2006,
          the balance of the indebtedness to related parties aggregated
          $461,486.
 
 **NOTE
          G - 8% CONVERTIBLE DEBENTURE**
 
 On
          March
          31, 2006, Media Finance en Suisse Holding GMBH, the Variable Interest Entity,
          purchased from Satellite Newspapers Suisse GMBH the technology rights,
          two Dutch
          subsidiaries, and $700,000 of intercompany debts for $2,700,000 in the
          form of
          an 8% convertible debenture.  The debentures are convertible into the
          Company’s Common Stock at the rate of $0.005 per share or 50% of the market
          price if the stock trades below $0.005 per share.  On December 12,
          2006, $2,100,000 of the debentures were converted into Company Preferred
          Stock
          because of the unavailable authorized Common Stock.
 
 **NOTE
          H -  INCOME TAXES**
 
 The
          Company has adopted Financial Accounting Statement SFAS No. 109, Accounting
          for
          Income Taxes.  Under this method, the Company recognizes a deferred
          tax liability or asset for temporary differences between the tax basis
          of an
          asset or liability and the related amount reported on the financial
          statements.  The principal types of differences, which are measured at
          current tax rates, are net operating loss carry forwards. At December 31,
          2006,
          these differences resulted in a deferred tax asset of approximately $625,000.
          SFAS No. 109  requires  the  establishment of a
          valuation  allowance  to  reflect the
          likelihood  of  realization of deferred tax
          assets.  Since realization is not
          assured, he  Company  has  recorded  a  valuation  allowance  for   the   entire  deferred  tax  asset,  and   the  accompanying  financial
          statements do not reflect any net asset for deferred taxes at December
          31,
          2006.
 
 The
          Company’s net operating loss carry forwards amounted to approximately $2,500,000
          at December 31, 2006, which will expire through 2025.
  F
              12
 
 **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
  **NOTE
          I -  STOCKHOLDERS’ DEFICIT**
 
 **Increase
          in Authorized Shares**
 
 On
          March
          11, 2004, the Directors and Shareholders of Satellite Enterprises Corp.
          approved
          an increase in the authorized number of shares of common stock from 200,000,000
          to 500,000,000 and declared a 3-for-1 stock split effective in the form
          of a
          200% dividend payable on or about March 31, 2004 to shareholders of record
          as of
          March 22, 2004.  All per share data and figures have been adjusted to
          give effect to the 3-for-1 split.
 
 During
          the first quarter of 2005, GCH Capital, as part of a private placement,
          sold
          6,830,864 shares for $409,443.  The shares were sold at $0.06 per
          share, net of commissions.
 
 The
          company issued 5,000,000 shares of its common stock to GCH Capital valued
          at
          $0.06 per share or $300,000 in connection with a 3 year consulting agreement
          relating to investment banking commencing December 1, 2004  The
          agreement was terminated in September 2005 and the shares issued were accounted
          for as stock based compensation.
 
 In
          May
          2004, the Company entered into a private placement arrangement with a group
          of
          investment bankers and amended the agreement on October 29, 2004 to
          sell  8,695,653 shares of its common stock at a price of $0.23 per
          share and the issuance of $500,000 5% convertible debentures due October
          31,
          2005.  The debentures are convertible into common stock at $0.23 per
          share.  Interest is payable to maturity.  The Company will
          receive the proceeds of the convertible debentures when a registration
          statement
          is filed to register the shares sold under the private
          placement.  Additionally, $150,000 was paid to GCH Capital as a
          break-up fee under their investment banking arrangement.  Under the
          terms of the agreement, 20,000,000 shares of the Company’s common stock owned by
          Media Finance en Suisse GMBH was pledged as collateral, 8,695,653 warrants
          were
          issued to acquire shares of the Company’s common stock at $1.50 per share, and
          the Company has issued an option to each of the investors to purchase an
          equivalent number of shares within a four month period subsequent to the
          effective date of the Registration Statement at $0.23 per share.
 
 Under
          the
          terms of the securities Purchase Agreement, the company is subject to penalties
          payable in cash or stock for non-compliance with certain terms and conditions
          of
          the agreement.
 
 In
          June
          2004, the Company issued 581,949 shares @ $0.06 per share of its common
          stock to
          GCH Capital to settle unpaid expenditures paid by GCH Capital on behalf
          of the
          Company.
 
 In
          June
          2004 the Company issued 4,823,529 shares of its common stock under a net
          cash
          basis formula for 6,000,000 warrants outstanding held by GCH Capital in
          connection with consulting and investment banking agreements.  This
          transition was considered stock based compensation.
 
 In
          September 2004, the Company issued 6,000,000 shares of its common stock
          to GCH
          Capital in order to terminate all consulting and investment banking
          relationships.  This transition was considered stock based
          compensation.
 
 In
          December 2004, the Company issued 919,926 shares of its common stock at
          $0.26
          per share in connection with the acquisition of SoliDam.  In June 2005
          the parties agreed that the transaction was not in the best interest of
          the
          parties and the transaction was terminated.
  F
              13
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
  **NOTE
          I -  STOCKHOLDERS’ DEFICIT (CONTINUED)**
 
 **Increase
          in Authorized Shares (Continued)**
 
 The
          note
          holders of the 5% convertible subordinated debentures converted $120,000
          of the
          notes to common stock of the Company.  Accordingly, 521,732 shares of
          common stock were issued at a price of $0.23 per share.
 
 In
          October 2005, a majority shareholder converted $1,500,000 of related party
          debt
          to 200,000,000 shares of the Company’s common stock.  Due to the
          limitation on authorized common stock, 177,533 shares of convertible preferred
          stock was issued and 22,467,007 shares of common stock was
          issued.  The convertible preferred stock is convertible at the rate of
          one preferred to 1,000 common.
 
 In
          October 2005 Media Finance en Suisse Holding GMBH, a company controlled
          by the
          Chief Executive Officer, converted 1,500,000 of its related party debt
          to
          200,000,000 shares of the Company’s common stock.  Due to the
          limitations on authorized common stock, 80,000  shares of convertible
          preferred stock was issued and 120,000,000 shares of common stock was
          issued.  The convertible preferred stock is convertible at the rate of
          one preferred to 1,000 common.
 
 In
          October 2005, the Company issued 10,000 shares of its common stock to GCH
          Capital at a price of $0.10 per share.  The shares were issued as
          consideration with their efforts in negotiations with the underwriting
          group
          relating to the 2004 underwriting.
 
 In
          October 2005, the Company issued 1,652,173 shares of its common stock to
          GCH
          Capital for their conversion of $380,000 of 5% convertible subordinated
          debenture at $0.23 per share.
 
 In
          October 2005, the Company issued 47,847,827 shares of its common stock
          to GCH
          Capital for the exercise of warrants which GCH Capital obtained from their
          conversion of $380,000 of 5% convertible subordinated debentures. The total
          consideration for the warrant exercise was $81,522.
 
 In
          October 2005, the Company issued 3,730,434 shares of its common stock to
          the
          2004 underwriting group as final consideration to release the company from
          underwriting agreements relating to future sales of its common
          stock.  The shares were issued at par value.
 
 In
          January 2006, the Company issued 3,000,000 shares for a manufacturing consulting
          contract to produce newspaper finishers for bulk printing.  The shares
          were valued at $0.10 per share, the value of the
          contract.  Accordingly, stock based compensation was recorded in the
          amount of $300,000.
 
 On
          June
          28, 2006, the holder of the 8% convertible debenture converted $2,100,000
          of the
          debentures to Preferred Stock.   In this connection, the Company
          issued 1,400,000 shares of its Preferred Stock because authorized common
          stock
          was unavailable.
 
 **Stock
          Options**
 
 On  December
          1, 2004, the Company granted options to purchase 24,309,000 shares of the
          company’s common stock to consultants with an exercise price of $0.06 per
          share.  These options vested immediately and will expire five years
          from issuance date.  The options issued to consultants had a fair
          value of $244,692 based upon the Black-Scholes options pricing
          model.  The compensation associated with these options was expensed in
          2004.
 
 F
              14
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
  **NOTE
          I -  STOCKHOLDERS’ DEFICIT (CONTINUED)**
 
 **Stock
          Options (Continued)**
  Transactions
              involving options are summarized as follows:
 ****
                      ****
                      ****
                      ****
                      ****
                      ****Options
                          granted December 1,
                          2004
                      ****
                      24,309,000
                      ****
                      $
                      0.066
                      ****Balance
                          December 31,
                          2004
                      ****
                      24,309,000
                      ****
                      $
                      0.066
                      ****Options
                        exercised in 2005
                      ****
                      **-**
                      ****
                      ****
                      **-**
                      ****Options
                          granted in 2005
                      ****
                      **-**
                      ****
                      ****
                      **-**
                      ****Balance
                        December 31, 2005
                      ****
                      24,309,000
                      ****
                      ****
                      0.066
                      ********
                      ****
                      ****
                      ****
                      ****
                      ****
                      ****Options
                        granted 2006
                      ****
                      ****
                      ****
                      ****
                      ****
                      ****Options
                        exercised
                      ****
                      ****
                      ****
                      ****
                      ****
                      ****Balance
                          December 31,
                          2006****
                      ****
                      24,309,000
                      
                      $
                      0.066
                      ****
 Pro
              forma
              information regarding net loss and net loss per share as required by
              SFAS 123
              has been determined as if the Company had accounted for its employee
              stock
              options under the fair value method. The fair value of these options
              was
              estimated at the date of grant using the Black-Scholes option-pricing
              model with
              weighted-average assumptions for the year ended December 31, 2004 as
              follows:
  **Assumptions**Risk-free
                            rate
                        
                        3.46
                        %Dividend
                            yield
                        
                        N/AVolatility
                            factor of the expected market price of theCompany’s
                            common
                            stock
                        
                        .10
                        %Average
                            life
                        
                        1
                        yearInterest
                            rate
                        
                        3.46
                        %
  Information
              concerning stock options outstanding at December 31, 2005 is as
              follows:
 
 **Remaining****Exercise
                            Price**
                        
                        **Number
                            Outstanding**
                        
                        **Contractual
                            Life**
                        
                        **Number
                            Exercisable**$0.066
                        
                        24,309,000
                        
                        5
                            years
                        
                        24,309,000
 **Reserved
          Shares**
 
 At
          December 31, 2006, the Company has reserved 24,309,000 shares of its common
          stock under existing option agreements.
 
 **NOTE  J
          -  OPERATING LEASES**
 
 The
          Company has entered into two operating leases for (1) a corporate home
          in
          Switzerland and (2) an automobile for the President. The corporate home
          lease
          commenced April 1, 2005 and has an unlimited duration which can be cancelled
          upon three months written notice in advance.  The monthly rent is
          $1,620 per month.  The auto lease is for a period of 48 months
          commencing December 1, 2005 with a monthly payment of $1,950.  In June
          2005, the lease on the Corporate Home was terminated and in April 2007,
          the
          lease on the automobile was terminated.  All leases were cancelled
          without penalties.
  F
              15
  **SATELLITE
          ENTERPRISES CORP. AND SUBSIDIARIES**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
          31, 2006**
  **NOTE
          K -  EMPLOYMENT CONTRACT**
 
 On
          October 1, 2006, the President and Chief Executive Officer entered into
          a 1 year
          employment contract with the Company which is renewable for additional
          1 year
          terms.  The agreement calls for an annual salary of $140,000 and a
          bonus equivalent to 5% of the Company’s annual profit.
 
 On  October
          1, 2006, the Chief Financial Officer entered into a 1 year employment contract
          with the Company which is renewable for additional 1 year terms.  The
          agreement calls for an annual salary of $60,000 per year.
 
 **NOTE
          L -  SUBSEQUENT EVENTS**
 
 On
          January 23, 2007, a creditor of Satellite Newspapers Suisse, which is an
          operating subsidiary of the Company, filed an involuntary bankruptcy petition
          for Satellite Newspapers Suisse with the court in Zug,
          Switzerland.  As a result of the bankruptcy, the U.S. Corporation will
          have to write off approximately $7,500,000 in intercompany advances to
          the Swiss
          operations in 2007.
 
 On
          March
          19, 2007, the Company entered into a written Settlement and Release Agreement
          with Messrs. DeVries and Mariani whereby in consideration of payment by
          the
          Company to DeVries and Mariani, the combined sum of one hundred fifty thousand
          ($150,000) U.S. dollars, DeVries and Mariani agreed to accept said payment
          and
          upon receiving full payment from the Company, to release and discharge
          the
          Company and all current and former principals, officers, agents, attorneys,
          employees, heirs, administrators, executors, successors, or assignees and/or
          representatives of the Company, from any and all judgments, arguments,
          claims,
          demands, claim of action, known or unknown, which  DeVries and/or
          Mariani may claim against the Company including but not limited to $1,440,000
          U.S. dollars outstanding judgment in the Fifteenth Judicial Circuit Court
          located in Palm Beach County, Florida, claiming breach of employment agreement
          against Satellite and against the Company’s CEO claiming fraud.
 
 On
          March
          27, 2007, the Company’s Board of Directors and majority of its shareholders
          approved and  reaffirmed its July 1, 2006 resolution to effect a
          reverse split of the Registrant’s issued and outstanding Common Stock, $0.001
          par value per share pursuant to which each fifty (50) shares of the Registrant’s
          issued and outstanding Common Stock would be combined and consolidated
          into one
          share of Common Stock and to authorize the Board of Directors of the Company
          to
          amend its Articles of Incorporation by issuing, without further shareholder
          action, one or more series of Preferred Stock from its authorized 5,000,000
          shares of Preferred Stock.
 
 On
          March
          27, 2007, the Company’s Board of Directors and majority of its shareholders
          approved  acceptance subject to due diligence by all parties of the
          March 21, 2007 Memorandum Agreement executed with International Creative
          Property Concepts NV and Andreas Yanakopoulos, an operator and provider
          of
          elderly care services in Belgium registered in Karpellen, Belgium
          (“ICPC”).  Under the
 
 Agreement,
          the Company agrees to purchase from ICPC five elderly care units for
          approximately $47,500,000 which will be paid with the issuance of the Company’s
          Common Stock at an agreed price of $0.35.  This transaction will
          represent approximately 73% of the outstanding post reverse split shares
          of the
          Company and will have a lock up period of 2 years.
 
 On
          March
          31, 2006, the remaining $600,000 of the 8% convertible debentures were
          converted
          to Preferred Stock.
 F16


**ITEM
        8.               
**CHANGES
        IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE****
  There have been no disagreements between the Company and Meyler & Company,
        LLC (“MC”) in connection with any services provided to us by each of them for
        the periods of their engagement on any matter of accounting principles or
        practices, financial statement disclosure or auditing scope or procedure
        with
        the exception that the Company did not believe that financials for Media
        Finance
        Suisse Holdings GmbH owned by Roy Piceni, President of the Company should
        be
        consolidated, because it has no legal connections with the Company. However
        the
        Company complied with the auditors demand to consolidate.
 
 No
        accountant’s report on the financial statements for the past two years contained
        an adverse opinion or a disclaimer of opinion or was qualified or modified
        as to
        uncertainty, audit scope or accounting principles, except such reports did
        contain a going concern qualification; such financial statements did not
        contain
        any adjustments for uncertainties stated therein. In addition, MC did not
        advise
        the Company with regard to any of the following:
 
 1.            That
        internal controls necessary to develop reliable financial statements did
        not
        exist; or
 
 2.
              That
                  information has come to their attention, which made them unwilling
                  to rely
                  on management’s representations, or unwilling to be associated with the
                  financial statements prepared by management;
                  or
 
 3.
              That
                  the scope of the audit should be expanded significantly, or information
                  has come to the accountant’s attention that the accountant has concluded
                  will, or if further investigated might, materially impact the fairness
                  or
                  reliability of a previously issued audit report or the underlying
                  financial statements, or the financial statements issued or to
                  be issued
                  covering the fiscal periods subsequent to the date of the most
                  recent
                  audited financial statements, and the issue was not resolved to
                  the
                  accountant’s satisfaction prior to its resignation or dismissal. During
                  the most recent two fiscal years and during any subsequent interim
                  periods
                  preceding the date of each engagement, we have not consulted MC
                  regarding
                  any matter requiring disclosure under Regulation S-K, Item
                  304(a)(2).
 
 
 **ITEM
        8A.                      CONTROLS
        AND PROCEDURES**
 
 As
        of the
        end of the period covered by this report, an evaluation was performed under
        the
        supervision and with the participation of the Company’s management, including
        the Chief Executive Officer and the Chief Financial Officer, of the
        effectiveness of the design and operation of the Company’s disclosure controls
        and procedures. Based on that evaluation, the Company’s management, including
        the Chief Executive Officer and the Chief Financial Officer, concluded that
        the
        Company’s disclosure controls and procedures were effective as of the end of the
        period covered by this report.
 
 The
        Company maintains a system of internal controls designed to provide reasonable
        assurance that: transactions are executed in accordance with management’s
        general or specific authorization; transactions are recorded as necessary
        (i) to
        permit preparation of financial statements in conformity with generally accepted
        accounting principles and  (ii) to maintain accountability for assets.
        Access to assets is permitted only in accordance with management’s general or
        specific authorization and the recorded accountability for assets is compared
        with the existing assets at reasonable intervals and appropriate action is
        taken
        with respect to any differences.
 
 Since
        the
        date of the most recent evaluation of the Company’s internal controls by the
        Chief Executive and Chief Financial Officers, there have not been changes
        in the
        Company’s internal controls over financial reporting for the period covered by
        this report that materially affected or were likely to materially affect
        the
        Company’s internal control over financial reporting.
 
 
 **ITEM
        8B.                      OTHER
        INFORMATION**
 
 None.
  28
 **PART
        III**
  **ITEM
          9.                 
**DIRECTORS,
          EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
          16(A)
          OF THE EXCHANGE ACT****
  Our
        directors hold office until the annual meeting of shareholders next held
        after
        their election. Our officers and directors as of April 14, 2005 are as
        follows:
 
 **Name**
              
              **Age**
              
              **With
                  Company**
                **Since**
              
              **Director/Position**Roy
                  Piceni
              
              39
              
              12/2003
              
              President,
                  Chief Executive OfficerRandy
                  Hibma
              
              35
              
              01/2004
              
              Chief
                  Financial Officer
  **MR.
        ROY PICENI/PRESIDENT**
 
 Mr. Piceni
        has served as Chief Executive Officer of our company from December 19, 2003
        till
        December 05, 2005. After resignation of Ms. Palmer (CEO from December 05,
        2005
        till May 19, 2006), Mr. Piceni became the CEO of the Company again. Prior
        to
        joining our company, Mr. Piceni was the founder of Satellite Newspapers
        Worldwide and was employed there since 2000. From 1995 to 2000, Mr. Piceni
        was employed with Eurostar as CEO. Mr. Piceni provides 100% of his time to
        our company.
 
 **MR.
        RANDY HIBMA/CHIEF FINANCIAL OFFICER**
 
 Prior
        to
        his appointment as CFO with the Company, Mr Hibma served from 2000 to 2003
        as
        Financial Controller of Satellite Newspapers group of companies and affiliated
        companies. Prior to joining Satellite Newspapers, Mr Hibma was manager of
        the
        Nostro department at Banque Parisbas Bank and
        manager  at  the  Foreign  Payment  Department  from  ABN
        AMRO Bank.  In addition  to his  function for
        Satellite Newspapers, Mr Hibma serves as Chief Financial Officer of Satellite
        Newspapers Suisse, Satellite newspapers Trading and Satellite Newspapers
        Content.
  **Audit
        Committee**
 
 The
        Board
        of Directors does not have a Compensation, Audit or Nominating Committee,
        and
        the usual functions of such committees are performed by the entire Board
        of
        Directors. The Board of Directors has determined that at present we do not
        have
        an audit committee financial expert. The Board believes that the members
        of the
        Board of Directors are collectively capable of analyzing and evaluating our
        financial statements and understanding internal controls and procedures for
        financial reporting. In addition, we have been seeking and continue to seek
        an
        appropriate individual to serve on the Board of Directors and the Audit
        Committee who will meet the requirements necessary to be an independent
        financial expert.
 
 **Code
        of Ethics**
 
 During
        the year 2005, The Company adopted a “code of ethics” as defined by the SEC that
        applies to the Company’s Chief Executive Officer, Chief Financial Officer,
        principal accounting officer or controller and persons performing similar
        functions. In addition we have this “code of ethics” also signed by all our
        other employees and key persons within the Satellite group.
 
 **Section
        16(a) Beneficial Ownership Compliance**
 
 Section
        16(a) of the Securities Exchange Act of 1934 requires our directors and
        executive officers, and persons who own more then 10 percent of our Common
        Stock, to file with the SEC the initial reports of ownership and reports
        of
        changes in ownership of common stock. Officers, directors and greater than
        10
        percent stockholders are required by SEC regulation to furnish us with copies
        of
        all Section 16(a) forms they file.
 
 Specific
        due dates for such reports have been established by the Commission and we
        are
        required to disclose any failure to file reports by such dates during fiscal
        2004. Based solely on our review of the copies of such reports received by
        us,
        or written representations from certain reporting persons that no Forms 5
        were
        required for such persons, we believe that during the fiscal year ended December
        31, 2006, there was no failure to comply with Section 16(a) filing requirements
        applicable to our officers, directors and ten percent stockholders.
  29
 **ITEM
        10.                      EXECUTIVE
        COMPENSATION**
 
 The
        following table provides summary information for the years 2004, 2005 and
        2006
        concerning cash and non-cash compensation paid or accrued by us to or on
        behalf
        of the president and the only other employee(s) to receive compensation in
        excess of $100,000.
  **Name/
                  Position**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **Stock**
              
              **Other**
              
              **Total**Roy
                  Piceni
              
              2006
              
              $
              140,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              140,000President
                & Chief Executive Officer
              
              2005
              
              $
              120,000
              
              $
              0
              
              
              0
              
              $
              0
              
              $
              120,000President
              
              2004
              
              $
              120,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              120,000Jerri
                  Palmer
              
              2006
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0Chief
                  Executive Officer (until May 19, 2006)
              
              2005
              
              $
              72,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              72,000Randy
                  Hibma
              
              2006
              
              $
              60,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              60,000Chief
                  Financial Officer
              
              2005
              
              $
              59,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              59,000
  **EMPLOYMENT
        CONTRACTS**
 
 Currently
        we have entered into two employment agreements with Mr. R.P. Piceni, our
        CEO and
        Mr. R. Hibma our CFO.
 
 The
        employment agreement of Mr. R.P. Piceni commenced October 1st, 2006
        and the
        duration is infinite. The agreement provides for a monthly salary of $12,000
        per
        month plus reasonable travel expenses.
 
 The
        employment agreement of Mr. R. Hibma commenced October 1st, 2006
        and the
        duration is infinite. The agreement provides for a monthly salary of $5,000
        per
        month plus reasonable travel expenses.
 
 **OPTION
        CONTRACTS**
 
 We
        implemented a 2003 Stock Option Plan in December 2003 for key employees and
        consultants in Holland and Switzerland totaling 24,309,000 at $0.06 per share.
        The following individuals are the recipients of the 2003 Stock Option Plan
        and
        the amount of shares involved:
 Roy
                        Piceni
                    5,475,000Robert
                        Piceni
                    4,380,000Ernst
                        V Kranen
                    2,995,500Anne
                        Bogaardt
                    547,500Randy
                        Hibma
                    2,102,400Karin
                      Frank
                    1,314,000Ralph
                      Vooys
                    876,000Karina
                      Tettero
                    876,000Cees
                      Jan Quirijns
                    43,800R.M.
                      Piceni
                    5,737,80024,309,000
 In December 2005, we granted two more Stock Option Plans. The following
          companies are the recipients of this 2005 Stock Option Plan and the amount
          of
          shares involved:
 
 Satellite
                      Newspapers Asia Pacific
                    Satellite
                      Newspapers Trading BV
                  1,050,000
                    2,900,0003,950,000
 
 **Family
        Relationships**
 
 Randy
        Hibma, The Chief Financial Officer of the Company is a first cousin of
        Mr. Roy Piceni, the Company’s President. Currently there are no other
        family relationships among our directors, executive officers or other persons
        nominated or chosen to become officers or executive officers.
  30
  **ITEM
          11.              
**SECURITY
          OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT****
 The following table sets forth information regarding the beneficial ownership
        of
        our common stock as of April 14, 2007. The information in this table provides
        the ownership information for:
 
 ·
              each
                  person known by us to be the beneficial owner of more than 5% of
                  our
                  common stock;
 ·
              each
                  of our directors;
 ·
              each
                  of our executive officers; and
 ·
              our
                  executive officers and directors as a
                  group.
 
 Beneficial
        ownership has been determined in accordance with the rules and regulations
        of
        the SEC and includes voting or investment power with respect to the shares.
        Unless otherwise indicated, the persons named in the table below have sole
        voting and investment power with respect to the number of shares indicated
        as
        beneficially owned by them.
  **Title
                      of Class**
                  
                  **Name**
                  
                  **Shares**
                  
                  **Percent**Common
                      Stock
                  
                  Roy
                      Piceni*
                  
                  233,063,915
                  (1)
                  55,04
                  %Randy
                      Hibma*
                  
                  0
                  
                  0.00
                  %
 *
        Executive officer and/or director.
 
 (1)
        Unless otherwise indicated, each
        person has sole investment and voting power with respect to the shares
        indicated. For purposes of this table, a person or group of persons is deemed
        to
        have “beneficialownership”
of any shares, which
        such person has the right to acquire within 60 days as of
        April 14, 2007. For purposes of computing the percentage of outstanding shares
        held by each person or group of persons named above on April 14, 2007 any
        security which such person or group of persons has the right to acquire within
        60 days after such date is deemed to be outstanding for the purpose of computing
        the percentage ownership for such person or persons, but is not deemed to
        be
        outstanding for the purpose of computing the percentage ownership of any
        other
        person. As of April 14, 2007, we had 423,477,518 shares of common stock
        outstanding.
 
 
 **ITEM
        12.                      CERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS**
 
 No
        director, executive officer or nominee for election as a director of our
        company, and no owner of five percent or more of our outstanding shares or
        any
        member of their immediate family has entered into or proposed any transaction
        in
        which the amount involved exceeds $60,000 except as set forth
        below.
 
 In
        October 2003, Media Finance en Suisse Holding GmbH acquired the patents,
        software and trademarks for the Newspaper KiOSK and related products. Media
        Finance is 100% owned by Roy Piceni, the chairman and director of our company.
        Thereafter, Media Finance set up an operating subsidiary, Swiss Satellite
        Newspapers. Media Finance granted Swiss Satellite Newspapers a twenty-year
        exclusive license to distribute all satellite derived contents for the purpose
        of commercializing their product under a revenue sharing
        arrangement.
 
 On
        November 26, 2003, we entered into a Stock Purchase Option Agreement with
        Media
        Finance to acquire Swiss Satellite Newspaper. On February 15, 2004, we issued
        126,000,000 shares of common stock in connection with the acquisition of
        Swiss
        Satellite Newspapers.
 
 As of December 31, 2005, Roy Piceni, our principal stockholder and an executive
        officer and director, has advanced our company $1,436,617. There is no specific
        maturity date and the loan is interest free. Imputed interest on the loan
        would
        approximate $42,000 for the nine months ended September 30, 2004 at an average
        rate of 5%.
 On March 31, 2006, the Company’s subsidiary Satellite Newspapers Suisse GmbH of
          Zug, Switzerland entered into a binding Secured Debenture Purchase Agreement
          which closed on the same date with Media Finance en Suisse Holding GmbH
          whereby
          the Company sold $2,700,000 original principal amount of Series A Premium
          Secured Convertible Debenture (the “Debenture”) and its two subsidiaries
          Satellite Newspapers Content BV and Satellite Newspapers Trading BV for
          a total
          aggregate consideration of Two Million Seven Hundred Thousand ($2,700,000)
          U.S.
          Dollars.
  Media Finance en Suisse Holdings GmbH paid for the Debentures and the two
          subsidiaries when it transferred to Satellite Newspapers Suisse GmbH all
          its
          validly issued and subsisting patents relating to the manufacture of the
          Kiosks,
          which patents are registered in the United States bearing registration
          numbers 5,860,362 (referred to herein as the “Patents”), and of confidential and
          proprietary know-how relating to the practice of the Patents and to the
          manufacture of the articles described in the Patents that was owned by
          Media
          Finance en Suisse Holdings GmbH and is valued in excess of Two Million
          ($2,000,000) US Dollars and its current receivables totaling Seven Hundred
          Thousand ($700,000) U.S. Dollars.
  The Debentures are in the principal amounts of Two Million Seven Hundred
          Thousand ($2,700,000) US Dollars, bear interest at the annual rate of Eight
          (8%)
          Percent and are convertible into the number of shares of Satellite Newspapers
          Corp. (the Registrant) at the conversion rate of $0.005 per share or 50%
          of the
          market price if the stock trades below $0.005.
 31
 **ITEM
        13.                      EXHIBITS
        AND REPORTS ON FORM 8-K**
 
 (a)           Exhibits:
 
 Exhibit
        Number                                Document
        Description
 
 2
              Rights
                  Agreement between Satellite Newspapers Worldwide NV, and Satellite
                  Enterprises Corp. dated June 20, 2003, incorporated by reference
                  to the
                  Company’s Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on June 25,
                  2003.
 
 3.1
              Corporate
                  Charter of Beck & Co. as filed with the Nevada Secretary of State on
                  April 6, 1998, incorporated by reference to the Company’s Registration
                  Statement on Form 10-SB filed with the Securities and Exchange
                  Commission
                  on April 4, 2000.
 
 3.2
              Bylaws
                  of Beck & Co., incorporated by reference to the Company’s Registration
                  Statement on Form 10-SB filed with the Securities and Exchange
                  Commission
                  on July 6, 1999.
 
 31
              Certification
                  pursuant to Section 302 of the Sarbanes-Oxley
                  Act.
 
 32
              Certification
                  Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002
 
 (b)           Reports
        on Form 8-K:
 
 The
          Company filed a Form 8-K on February 2, 2006 relating to the cancellation
          of the
          Share Purchase Agreement
  The
          Company filed a Form 8-K on April 4, 2006 relating to the Secured Debenture
          Agreement.
  The
          Company filed a Form 8-K on May 30, 2006 relating to resignation of Ms.
          Jerri
          Palmer (CEO) and Mr. Henk Meijer (Board Member) .
  The
          Company filed a Form 8-K on February 2, 2007 relating to the bankruptcy
          of the
          Swiss subisidiary
  The
          Company filed a Form 8-K on March 27, 2007 relating to Settlement and Release
          Agreement.
  The
          Company files a Form 8-K on March 27, 2007 relating to Reverse Stock Split
&
Name Change as well as the Memorandum of Agreement
  **ITEM
        14.                      PRINCIPAL
        ACCOUNTANTS FEES AND SERVICES**
 
 The
        following table sets forth fees billed to us by our auditors during the fiscal
        years ended December 31, 2006 and December 31, 2005 for: (i) services rendered
        for the audit of our annual financial statements and the review of our quarterly
        financial statements, (ii) services by our auditor that are reasonably related
        to the performance of the audit or review of our financial statements and
        that
        are not reported as Audit Fees, (iii) services rendered in connection with
        tax
        compliance, tax advice and tax planning, and (iv) all other fees for services
        rendered.
  32
  FIRM
              
              FISCAL
                  YEAR 2005
              
              FISCAL
                  YEAR 2006Meyler
                  & Company, LLC
              
              $
                  51,500.00
              
              $
                  51,600 (1)
 
 (ii)
        Audit Related Fees
 
 None
 
 (iii)
        Tax
        Fees
 
 None
 
 (iv)
        All
        Other Fees
 
 None
  **TOTAL
        FEES**
 
 FIRM
              
              FISCAL
                  YEAR 2005
              
              FISCAL
                  YEAR 2006Meyler
                  & Company, LLC
              
              $
                  51,500.00
              
              $
                  51,600.00 (1)
 
 
 **SIGNATURE**
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        dully caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.
 
 **SATELLITE
        NEWSPAPERS CORP.**
 
 
 Dated:
        April 17, 2007
 
 In
        accordance with the Exchange Act, the report has been signed below by the
        following persons on behalf of the Company and in the capacities and on the
        dates indicated.
 
 
 **SIGNATURE**
              
              **NAME**
              
              **TITLE**
              
              **DATE**/s/
                  Roy Piceni
              
              Roy
                  Piceni
              
              President,
                  & Chairman
              
              April
                  17, 2007/s/
                  Randy Hibma
              
              Randy
                  Hibma
              
              CFO  (Principal)
              
              April
                  17, 2007
 
 33