**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.20549**

|   | **FORM** **10-KSB/A** |
|--------|----------------------------|

| **(Mark one)**                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| x                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE****SECURITIES EXCHANGE ACT OF 1934**           |
| **For the fiscal year ended December 31, 2007**                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Or**                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| o                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **TRANSITION REPORT PURSUANT TO SECTION 13 OR** **15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| **For the transition period                            from**                               **to**                               **.** |

 

**Commission file number-**033-20033-D

 

**INTERLINK GLOBAL CORPORATION**

**(Name of small business issuer in its charter)**

 

| **NEVADA***(State or other jurisdiction of incorporation or organization)*            |   | **42-1655043***(I.R.S. Employer Identification No.)* |
|---------------------------------------------------------------------------------------|--------|------------------------------------------------------|
| **1100 NW 163 Drive**

**Miami, Florida**

*(Address of principal executive offices)* |   | **33169***(Zip Code)*                                |
|  

*(Issuer’s Telephone Number) (305) 261-2007*                            |

 

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

 

| **Title of each class**                  |   | **Name of each exchange                            on which registered** |
|------------------------------------------|--------|--------------------------------------------------------------------------|
| Common Stock, par value $0.001 per share |   | None                                                                     |

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

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this            Form 10-KSB. o

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

The issuer’s gross revenue for fiscal year ended December 31, 2007, was: $9,897,748

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by referenced to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specific date within the past 60 days. (See definition of affiliates in rule 12b-2 of the Exchange Act). $4,784,892

Note: If determining whether a person is an affiliate will involve an unreasonable effort, the issuer may calculate the ggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if assumptions are stated.

 

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Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ___ No ____            Not applicable x

As of March 15, 2008 the issuer had 21,800,920 shares of its common stock issued and outstanding to non affiliates.

**DOCUMENTS INCORPORATED BY REFERENCE**

The issuer has not incorporated by reference into this annual report: (1) any annual report to the issuer’s securities holders, (2) any proxy or information statement, or (3) any Annual Report on Form 10-KSB/A filed pursuant to Rule 424(b) or (c) of the Securities Act.

|   | Transitional Small Business Disclosure Format (Check one): Yes o  | No x |
|--------|----------------------------------------------------------------------------------|-----------|

**Interlink Global Corporation**

**FISCAL YEAR 2007 FORM 10-KSB ANNUAL REPORT**

 
|                           |
|---------------------------|
| **INDEX**                 |   |
|                           |
| **PART I**                | **Page** |
|                      |   |   |   |
| Item 1.                   |   | Description of Business | 4 |
| Item 2.                   |   | Description of Property | 15 |
| Item 3.                   |   | Legal Proceedings | 16 |
| Item 4.                   |   | Submission of Matters to a Vote of Security Holders | 16 |
|                      |   |   |   |
| **PART II**               |   |
|                      |   |   |   |
| Item 5.                   |   | Market for Common Equity and Related Stockholder Matters and Small                    Business Issuer Purchases of Equity Securities. | 17 |
| Item 6.                   |   | Management’s Discussion and Analysis or Plan of Operation | 17 |
| Item 7.                   |   | Financial Statements | 20 |
| Item 8.                   |   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. | 20 |
|                      |  |  |  |
| Item 8A.                  |   | Controls and Procedures | 20 |
| Item 8A(T).               |   | Controls and Procedures | 20 |
| Item 8B.                  |   | Other Information | 21 |
|                      |
| **PART III**              |   |
|                      |   |   |   |
| Item 9.    |   | Directors, Executive Officers, Promoters and Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act | 22 |
| Item 10.                  |   | Executive Compensation | 25 |
| Item 11.                  |   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 25 |
| Item 12.                  |   | Certain Relationships and Related Transactions, and Director Independence. | 26 |
| Item 13.                  |   | Exhibits | 26 |
| Item 14.                  |   | Principal Accountant Fees and Services | 26 |
|                      |   |   |   |
| Signatures                |   |   | 27 |
|                      |   |   |   |
| Certifications            |   |   | 31 |
|                           |
|                      |   |   |   |

 

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**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

 

 

In this annual report we make a number of statements, referred to as “*forward-looking statements*”, which are intended to convey our expectations or predictions regarding the occurrence of possible future events or the existence of trends and factors that may impact our future plans and operating results. These forward-looking statements are            derived, in part, from various assumptions and analyses we have made in the context of our current business plan and information currently available to us and in light of our experience and perceptions of historical trends, current conditions and expected future developments and other factors we believe to be appropriate in the circumstances. You can generally identify forward-looking statements through words and phrases such as            “*seek*”, “*anticipate*”, “*believe*”, “*estimate*”, “*expect*”, “*intend*”,            “*plan*”, “*budget*”, “*project*”, “*may be*”, “*may continue*”, “*may likely result*”,and similar expressions. When            reading any forward looking statement you should remain mindful that all forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of our company, and that actual results or developments may vary substantially from those expected as expressed in or implied by that statement for a number of reasons or factors, including those relating to:

 

|   | **•** | our ability to design and market our future products; |
|--------|------------|-------------------------------------------------------|

|   | **•** | our ability to protect our intellectual property rights and operate our business without infringing upon the intellectual property rights of others; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | whether or not markets for our products develop and, if they do develop, the pace at which they develop; |
|--------|------------|----------------------------------------------------------------------------------------------------------|

|   | **•** | our ability to attract the qualified personnel to implement our growth strategies, |
|--------|------------|------------------------------------------------------------------------------------|

|   | **•** | our ability to develop sales and distribution capabilities; |
|--------|------------|-------------------------------------------------------------|

|   | **•** | the accuracy of our estimates and projections; |
|--------|------------|------------------------------------------------|

|   | **•** | our ability to fund our short-term and long-term financing needs; |
|--------|------------|-------------------------------------------------------------------|

|   | **•** | changes in our business plan and corporate strategies; and |
|--------|------------|------------------------------------------------------------|

|   | **•** | other risks and uncertainties discussed in greater detail in the sections of this annual report, including those captioned “Risk Factors” and “Management’s Discussion And Analysis.” |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Each forward-looking statement should be read in context with, and with an understanding of, the various other disclosures concerning our company and our business made elsewhere in this annual report as well as other public reports filed with the United States Securities and Exchange Commission (the “*SEC*”). You should not place undue reliance            on any forward-looking statement as a prediction of actual results or developments. We are not obligated to update or revise any forward-looking statement contained in this annual report to reflect new events or circumstances unless and to the extent required by applicable law.

 

***We require additional financing to sustain our operations and without it we may not be able to continue operations.***

 

We will need additional funds to continue our operations and such additional funds may not be available when required. Our inability to raise additional working capital at all or to raise it in a timely manner would negatively impact our ability to fund our operations, to generate revenues, and to otherwise execute our business plan, leading to the reduction or suspension of our operations and ultimately            our going out of business.

 

 

3

 

 

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**PART I**

 

**Item 1*****Description of Business***

 

**History and Development of the Company**

 

We were incorporated in Utah on November 20, 1987. In August of 1992, our Company acquired privately-held, Infinity Worldwide Trading Corp., a New York company, and changed our name to Infinity Worldwide, Inc. However, our Company was inactive from 1994 until January 12, 2005, when Infinity Worldwide, Inc. effectuated a merger with Interlink Global Corp. (the Company), a Florida corporation. In February            2005, pursuant to the merger agreement, we effected a 1 share for 3 shares reverse stock split and issued a net total of 13,149,680 restricted shares of common stock, recorded at par value, to the shareholders of Interlink Global Corp., the Florida corporation. Retroactive effect of the reverse stock split and the merger has been reflected in this report. The share exchange reorganization and merger allowed Interlink Global Corp. to become a wholly-owned subsidiary of Infinity            Worldwide, Inc., a publicly-held shell company. From and after the closing of the reorganization and merger, our principal asset became Interlink Global Corp. Simultaneously, we reincorporated in Nevada and the holding company named Infinity Worldwide, Inc. was changed to Interlink Global Corporation (“Interlink”).

 

Our corporate offices are located at 1100 NW 163rd Drive, North Miami, Florida, 33169. Our telephone number is (305) 261-2007. Our website address is http://www.interlink-global.com. Information contained in our website is not a part of this report on Form 10-KSB.

 

On March 15, 2006, Interlink acquired Communication Networks Holdings, Ltd., (CNH). The acquisition included CNH’s ownership of all issued and outstanding capital stock of Telecomunicaciones NGTV, S.A., (NGTV) a Venezuelan corporation engaged in the provision of telecommunication services (NGTV).

 

On November 3, 2006, Interlink acquired 66% of MetroIP Colombia S.A. (MetroIP), a Colombian telecommunication company located in Barranquilla, Colombia.

 

**OUR BUSINESS**

 

**General**

 

We are a provider of private and public telecommunications network and Internet services. We offer integrated data, voice, data center and Internet solutions, with an emphasis on broadband transmission, for national and multinational companies, financial institutions, governmental agencies and other business customers, as well as private and residential customers. We provide telecommunications, data            center and Internet services through our networks, which consist of owned microwave backbone and wireless links, teleports, data centers, earth stations and leased fiber optic and satellite links.

 

We consult with potential business and residential customers to assist them in the selection of a service plan based on their anticipated usage and internet requirements. Subscribers can select one or more telephone numbers in any rate center where we provide service. All residential customer packages include various services, including voicemail, caller ID, call waiting, web-based account management and            billing and various other services. Business customers enjoy the following additional features: auto attendant, extension-to-extension dialing, call hunt, conference bridging, and business class voicemail.

 

***Economic and political conditions in Latin America pose numerous risks to our operations.***

 

We expect that a large part of our revenues will be derived from operations in Latin America, where we have significant operations.

4

 

 

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**General (continued)**

 

***We do not anticipate paying any cash dividends in the foreseeable future, which may reduce your return on an investment in our common stock.***

 

We plan to use any of our earnings, to the extent we have earnings, to fund our operations.

 

***We are controlled by our principal stockholders, executive officers and directors, and as a result, the trading price for our shares may be depressed and these stockholders can take actions that may be adverse to your interests.***

 

As of December 31, 2007, our principal shareholder, Anastasios Kyriakides, beneficially owns approximately 18.44% of our common stock. This stockholder, will have the ability to exert substantial influence over all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our            assets.

 

***We are subject to the penny stock rules. These rules may adversely affect trading in our common stock**.*

 

Our common stock is a “low-priced” security under the “penny stock” rules promulgated under the Securities Exchange Act of 1934. In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer’s duties in selling the            stock, the customer’s rights and remedies and certain market and other information.

 

**Products and Services**

 

**Business and Residential Calling Plans**

 

Business and residential customers select a service plan based on their anticipated usage and enter into a service agreement with Interlink. Our service plans provide for unlimited calls to other Interlink customers worldwide and various levels of usage (fixed number of minutes or unlimited) for calls to Publicly Switched Telephone Network (PSTN) phones in North America and Canada and international            regions (Latin American, European and Asia-specific). Calls in excess of a selected limit are charged on a per-minute basis.

 

Subscribers can select one or more telephone numbers in any rate center where Interlink provides service, anywhere in the world.1 All Interlink customer packages include voice mail, caller ID, call waiting, simultaneous ringing, multi-phone call forwarding, call transfer, inbound call blocking, missed call logging, call return, repeat dialing, call rerouting, outbound international PSTN call            block, and web-based account management and billing at no additional cost. Business customers are provided the following additional features: auto attendant, extension-to-extension dialing, call hunt, conference bridging, and business class voicemail.

Depending on the selected service plan and promotions in effect, Interlink may sell at a discount or provide at no cost an analog telephone adapter for residential customers to use with the Company’s service. For small businesses, Interlink can offer “virtual PBX” services. For large business customers, Interlink offers hardware and software to directly connect to their existing PBX            system.

_________________________

1 However, extra charges may apply based on the location of the selected tariff zone, the applicability of local tolls in that zone, and any interprovider contractual restrictions that may exist.

5

 

 

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**Products and Services (continued)**

We offer US customers the ability to retain their existing phone number when they switch to Interlink, subject to service availability in their current number’s tariff zone.

***Our failure to acquire, integrate and operate new technologies could harm our competitive position***

 

The telecommunications industry is characterized by rapid and significant technological advancements and the introduction of new products and services. We do not possess significant intellectual property rights with respect to the technologies we use and are dependent on third parties for the development of and access to new technology.

 

We cannot predict the effect of technological changes, such as changes relating to emerging wire line and wireless transmission technologies and the use of the Internet for traditional voice, data or other broadband services, on our business. In addition, it is not possible for us to predict with any certainty which emergent technology relevant to our business will prove to be the most economic,            efficient or capable of attracting new customers.

 

**Wholesale Calling Plans**

Wholesale customer relationships are negotiated on a case-by-case basis and dependent on the call volume, desired features, implementation requirements, and marketing issues (white label versus co-branded) of other broadband telephony carriers such as IDT, Dollar Phone and Ntera.

**Wholesale PSTN Termination**

We also provide wholesale PSTN termination (i.e., connecting calls to users on the PSTN) for other broadband telephony providers in any location where we establish a trunking gateway to reduce our operating costs associated with PSTN termination.

**Call Termination to Our Customers**

We have a payment structure which permits us to receive payment for long distance calls terminated to our customers, regardless of whether they originate from the PSTN or another broadband telephony provider.

**Implementation Services**

In addition to the calling plans, Interlink also offers an array of implementation services for wholesale and large enterprise customers so that they can integrate Interlink service into their telecommunications network or company. Because we intend to automate system integration as much as possible, we believe that integration services will likely remain a negligible revenue stream.

**Internet Connectivity**

In addition to the calling plans, Interlink also offers wireless internet connectivity in both Colombia and Venezuela through our own subsidiary wireless infrastructure. This service is provided to large enterprise customers, as well as small business and residential customers so that they may have a better connectivity offer than that, which can be obtained from the traditional incumbent            providers.

6

 

 

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**Products and Services (continued)**

 

**Satellite Connectivity**

Interlink also offers satellite connectivity through our satellite hub in Miami, Florida, in the United States (US). Through this hub (and with appropriate equipment on the remote side) our Company can offer satellite connectivity to almost anywhere in the world.

Our 9.3 meter dish satellite can service half the US, Europe, all of Africa, and all of Latin America and Caribbean. We can service 500 clients (depending on site customer equipment, a customer can have as many as 30 E1/T1 connections). It has its own outdoors containment hub and power backup.

**Data Transmission Services**

We offer our customers a broad range of end-to-end network service combinations for their point to-point and point-to-multipoint telecommunications needs, ranging from simple connections to customized private network solutions. We offer our network services over our proprietary and leased networks, which are comprised of microwave wireless networks, leased lines, fiber optic lines, and satellite            links.

**Industry Background**

**Residential Wire Line Communications Market** 

Residential wire line communications services historically have been offered to consumers by a variety of operators, including traditional local and long distance telephone providers such as AT&T (formerly SBC Communications), BellSouth, Citizens Communications Corp., Qwest, Sprint Nextel and Verizon. However, the competition for residential consumers has increased significantly. In recent years,            many cable television service providers added telephone service to their offerings. Improvements in wireless technology have allowed a number of wireless communications providers, many of which are owned by traditional telephone operators, to capture a share of the residential telephone service market, as many former wire line customers have begun to make wireless their sole telephone service. Most recently, improvements in Voice over Internet Protocol, or VoIP, networks, which            allow for the transmission of voice signals as digital data over a broadband Internet connection and in many cases require only modest capital investment to build, have created even more competition in the market. A new group of competitors, including start-up companies similar to ours, and existing cable, telephone and Internet providers, now use VoIP to offer telephone service to residential customers.

While the information listed above discusses the US market, third party analysts generally agree that the rest of the world is encountering similar or higher market growth. With the exception of South Korea and Japan (both of which far exceed the growth patterns herein), we believe that the relative numbers shown herein (adjusted for population) are indicative of the true market size that we have            available in the various countries where we operate, or plan to operate.

 

7

 

 

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**The Growth in Broadband Adoption in the Home** 

VoIP communications are carried as data packets and require a broadband Internet connection that has sufficient bandwidth to deliver the data uninterrupted. As a result, broadband penetration has been a key driver of VoIP’s expansion to date. As the Internet has become a bigger part of people’s lives and advanced applications have come to require greater bandwidth, broadband use has become            more widespread. However, an increasing array of alternative broadband access technologies, such as wireless broadband and broadband over power lines, is now available. The availability of these alternatives will encourage future broadband deployment and penetration both in the US and worldwide.

We believe the rapid deployment of broadband access in the US and abroad will continue to enable the accelerated adoption of VoIP communications.

**VoIP Communications and Providers** 

One of the outgrowths from the rapid deployment of broadband connectivity in the US and abroad has been the accelerated adoption of VoIP. Independent industry analysts have noted that the historical adoption of VoIP to date indicates that it may follow a future growth trajectory equal to or greater than that of the expansion of broadband access to the Internet.

VoIP is a technology that enables voice communications over the Internet through the conversion of voice signals into data packets. The data packets are transmitted over the Internet and converted back into voice signals before reaching their recipient. The Internet uses packet-switched technology to transmit information between two communicating terminals. For example, packet switching allows a            personal computer to download a page from a web server or to send an e-mail message to another computer. VoIP allows for the transmission of voice signals over these same packet switched networks and, in doing so, provides an alternative to traditional telephone networks.

VoIP technology presents several advantages over the technology used in traditional wire line telephone networks that enable VoIP providers to operate with lower capital expenditures and operating costs while offering both traditional and innovative service features. Traditional networks, which require that each user’s telephone be connected to a central office circuit switch, are expensive to            build and maintain. In contrast, VoIP networks route calls over the Internet using either soft switches or software, both of which are less expensive than circuit switches. In addition, traditional wire line networks use dedicated circuits that allot fixed bandwidth to a call throughout its duration, whether or not the full bandwidth is being used throughout the call to transmit voice signals. VoIP networks use bandwidth more efficiently, allocating it instead based on usage at any            given moment. VoIP technology also presents the opportunity to offer customers attractive features that traditional telephone networks cannot easily support, such as online call management and self-provisioning (the ability for customers to change or add service features online).

Traditional telephone companies originally avoided the use of VoIP networks for transmitting voice signals due to the potential for data packets to be delayed or lost, preventing real-time transmission of the voice data and leading to poor sound quality. While a delay of several seconds in downloading a webpage or receiving an e-mail generally is acceptable to a user, a delay of more than a millisecond            during a live, two-way voice conversation is not satisfactory. Original VoIP services, which were pioneered in the mid-1990s, were typically only PC-to-PC, requiring two personal computers to be in use at the same time. Early international calling card services, which allowed users to dial abroad for significantly discounted rates, also relied on a form of VoIP technology. These initial VoIP services often suffered from dropped calls, transmission delays and poor sound quality            because of bandwidth limitations. As a result, VoIP initially developed a poor reputation for service quality relative to traditional fixed line telephone service. Subsequent increases in bandwidth, driven by increased broadband penetration, and improvements in packet switching, signaling, and compression technology have significantly enhanced the quality and reliability of VoIP calls.

 

8

 

 

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**VoIP Communications and Providers (continued)**

Today, VoIP technology is used in the backbone of many traditional telephone networks, and VoIP services are offered to residential and business users by a wide array of service providers, including established telephone service providers. These VoIP providers include traditional local and long distance phone companies (such as AT&T, BellSouth, Qwest and Verizon), established cable companies (such            as Cablevision, Charter Communications, Comcast, Cox and Time Warner Cable), competitive telephone companies (such as Time Warner Telecom), Internet service providers (such as AOL, EarthLink and MSN, and Interlink Global in Venezuela and Colombia) and alternative voice communications providers (such as Interlink Global, Vonage and Skype).

While all of these companies provide residential VoIP communications services, traditional wire line telephone companies offering VoIP services to consumers, typically have high capital expenditures and operating costs in connection with their networks. In addition, depending on the structure of their VoIP networks, the VoIP services provided by some of these companies can only be used from the location            at which the broadband line they provide is connected.

As the availability of broadband and VoIP becomes more widespread, and as the public becomes familiar with the advantages of VoIP over traditional voice telephony, independent industry analysts believe that VoIP will become increasingly attractive to mainstream consumers.

**Market Opportunity for VoIP** 

Analysts have emphasized that the VoIP industry will need to move away from marketing VoIP on the basis of its low price, and instead begin to distinguish VoIP from traditional telephone service on the basis of innovative features, in order to combat price erosion and maintain healthy revenues in the industry. This will be especially important as the regulation governing VoIP becomes more developed,            since increasing regulation may impose additional operating costs and taxes on VoIP providers that may increase their costs of doing business and, ultimately, reduce their ability to undercut the pricing of traditional telephone services. This has occurred in the past.

**Marketing**

We differentiate the Company from our competitors as much as possible with our favorable rates in the Latin American market. We compete on the basis of our feature set, packaging premium features—such as those found in our enterprise packages—in a manner that is attractive to price sensitive customers. We encourage customers to sign up for plans, such as our Latin American calling plan,            which reduce our revenue volatility and our customers’ focus on per minute charges.

Nevertheless, we recognize that telecommunications, most notably at the lower end, is a commodity subject to intense competition—particularly in the US. We compete at the lower end of the market. Specifically, we will continue to strive to have the lowest retail cost per minute for calling to the largest cities in Latin America. We believe this generates a perception among our price sensitive            customers that the Company*always*offers a solid value at a competitive price. This, in turn, creates significant brand loyalty and reduces churn. Because Interlink Global has one of the lowest cost structures in the industry, we believe that we can compete even at the low end of the market without significant erosion of our margins.

**Promotional Strategy**

Our promotional strategies are based on cost/benefit efficiency. As an example, in our targeted Spanish and Portuguese speaking retail market, we will, as much as possible, utilize our wholesale customers to co-brand our product offerings in a way that will build Interlink brand awareness in markets where these wholesale customers operate. This will leave the majority of the cost to obtain new            customers with our wholesale customer.

We will provide low priced and or free connection devices (ATA’s or IP phones) when the retail customer signs a minimum one year contract. While we are exploring the possibility of having these units sold via a leasing company with the individual customer contracts (and credit cards) as the security.

 

9

 

 

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**Channel Strategy**

Interlink will utilize a diversified channel approach which will allow for the greatest penetration and customer growth within the shortest time period while upholding our conservative spending approach.

We will distribute our software through strategic relationships with leading Internet and computer hardware and software companies in Latin America. Our goal is to have our software bundled with our partners’ products and services and distributed domestically and internationally.

We will enter into various agreements with focused web sites to promote our products/services, by hosting Interlink referral links on their web sites. We will either pay per sign up (once the customer has completed a 60 day subscription period), or provide a percentage of the reoccurring revenue for a period of one year when the subscriber signs a minimum one year contract.

We will utilize multi level marketing as well as master agents (wholesale customers) to address the retail market. We also believe that there is a substantial upside by using eBay as a sales outlet (directly, through multi level marketing and/or through master agents). These combinations can allow us to build a substantial retail base without having the cost associated with building a large in-house            sales team.

As larger potential customers will require direct contact as well as some specialization, and special pricing, Interlink will utilize direct sales when approaching other operators such as the smaller CATV operators, large corporations (banks, manufacturing companies, etc.), universities, and/or developing nation’s telephone companies.

**Advertising Strategy**

We will advertise our services through online and Internet-based advertising venues and traditional print advertising in domestic and international publications. We will target any advertising at specific groups versus shotgun advertising. We will also make extensive use of press releases and companies that specialize in disseminating press releases to the public.

We will supplement all of these promotional efforts with culture-specific and/or geography-specific print advertising, web advertising, carrier trade show appearances, and, to the extent we see a payoff, radio advertising.

**Sales**

Our direct sales force targets enterprise accounts, such as Fortune 1000 and multi national companies, and wholesale accounts, such as cable operators. We employ six people in our sales department.

Our indirect sales team consists of an in-house sales group which oversees our registered sales agents, our reseller marketing program, and our Refer-a-Friend program.

**Supply Chain Partners**

Our most significant variable cost on a per subscriber basis is the customer premises equipment, the Analogue Telephone Adapter (ATA) device. Regardless of whether the cost is paid directly by the customer (which raises the cost to the customer of switching telephone services) or subsidized by Interlink (which raises our customer acquisition costs), it is in our best interest to seek the lowest possible            cost for these ATA devices. Fortunately, these devices are now commodities as their core technology (in a semiconductor + software package) is widely licensed by TI and Netergy to Asian chipset suppliers. Initially, we contracted with Signal C for an ATA device that was functionally similar to those offered by Motorola and Cisco but which cost 30% less. We are now purchasing from another Asian company, a more advanced version with a smaller form factor, and better feature set. In            the long-term, as our subscriber base increases, we may contract directly with a manufacturer to take advantage of volume discounts without paying a markup for branding or distribution.

 

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**Competition**

 

We compete on the basis of our experience, network quality, customer service, range of services offered and price. Our competitors fall into three broad categories:

 

|   | **•** | public telecommunication operators (“PTO’s”) in each country where we operate |
|--------|------------|-------------------------------------------------------------------------------------------------|

 

|   | **•** | other companies that operate competing satellite and terrestrial data transmission businesses, including newer entrants from more developed telecommunications markets outside of Latin America |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | large international telecommunications carriers, and |
|--------|------------|------------------------------------------------------|

 

|   | **•** | other VOIP operating companies |
|--------|------------|--------------------------------|

 

In the first category are the PTOs, which in the recent past began to extend their focus beyond local and long-distance telephony services, dedicating resources towards the private telecommunications network systems segment of the telecommunications market targeting the type of customer that represents our most important target market. PTOs generally have significant competitive advantages, including (i)            close ties with national regulatory authorities, (ii) control over connections to local telephone lines, (iii) the ability to subsidize competitive services with revenues generated from other services they provide on a monopoly or duopoly basis and (iv) a reluctance of regulators to adopt policies and grant regulatory approvals that will result in increased competition.

 

We believe that by maintaining our position as a reliable, high quality provider of telecommunications services, while strengthening the quality of our network and the breadth of service offerings through our Radio Network, we will be able to maintain our current customers and successfully attract new customers.

 

In the second category, our competitors include data transmission providers. We believe that we are able to compete successfully in data transmission services because we offer a broad array of services, provide high quality, custom-designed services that are tailored to meet the specific needs of each customer and have a greater geographical footprint for our broadband network than our current            competitors among these providers.

In the third category, major telecommunications carriers, including PTOs, have entered, or indicated their intention to enter, the Latin American telecommunications market as deregulation in Latin America and elsewhere opens new market opportunities. Increasing competition may significantly affect our pricing policies. In particular, PTOs, including Telefonica in Spain have expanded their regional            presence through acquisitions of smaller competitors in specific countries. We cannot assure you that any future competition arising from major telecommunications carriers will not adversely affect our financial condition or results of operations.

 

**Our principal competitors include:**

 

|   | **•** | Spain’s Telefonica S.A., which provides through its affiliates fixed line and cellular telecommunications services, data transmission services and audiovisual content and media services in Spain, Latin America and other regions. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | Telecom Italia SpA, a global telecommunications provider, which operates through affiliates in Latin America principally in the field of mobile telephony (fixed-network, Internet, data transmission, telex and telegraphy) services in Argentina (through its ownership stake in Telecom Argentina held through Nortel Inversora), Bolivia, Brazil (through its                            wholly-owned TIM Brasil Group), and Paraguay, with publicly-announced goals of developing a continent-wide GSM network in South America. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | IBM, EDS and other local system integrators. |
|--------|------------|----------------------------------------------|

 

|   | **•** | Virtual operators address the market on a national or global basis. They can leverage their reach to achieve economies of scale better than any other competitor. Virtual operators also offer unique value for mobile customers. Leading virtual operators include Vonage, Net2Phone, and Packet8. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

11

 

 

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**Competition (continued)**

 

We believe the use of new or emerging voice and data transmission services or technologies that are not widely available in Latin America, such as wireless-based systems dedicated to data and voice distribution services provides us with a current advantage. However, we can not guarantee that this advantage will be maintained in the future.

 

Rates are not regulated in our countries of operation and the prices for our services are strongly influenced by market forces. We believe that increasing competition will result in increased pricing pressures. We have faced and expect to continue to face declining prices and may experience margin pressure as the PTOs in the countries where we have operations modernize their facilities, adapt to a            competitive marketplace, place greater emphasis on data telecommunications and as other companies enter the Latin American telecommunications market. These price and margin declines have also accelerated, and will likely continue to do so, as new competitors enter our markets.

 

The principal barriers to entry for prospective providers of private telecommunications network services such as ours are the development of the requisite understanding of customer needs and the technological, commercial experience, comprehension of, and experience with, the complex regulatory environments in Latin America and the Caribbean, infrastructure to provide quality services to meet those needs,            and working capital.

 

***Our international sales are subject to the risks of doing business abroad***

 

Substantially all of our operations are located abroad. Foreign operations are subject to a number of risks, including**:**

 

| - | political and social unrest, |
|---|------------------------------|

| - | changing economic conditions, |
|---|-------------------------------|

| - | currency exchange rate fluctuations, |
|---|--------------------------------------|

| - | international political tension and terrorism, |
|---|------------------------------------------------|

| - | electrical shortages, |
|---|-----------------------|

| - | transportation delays, |
|---|------------------------|

| - | loss or damage to products in transit, |
|---|----------------------------------------|

| - | expropriation, |
|---|----------------|

| - | nationalization, |
|---|------------------|

| - | the imposition of tariffs and trade duties both international and domestically, |
|---|---------------------------------------------------------------------------------|

| - | import and export controls and other non-tariff barriers, |
|---|-----------------------------------------------------------|

| - | exposure to different legal standards (particularly with respect to intellectual property), |
|---|---------------------------------------------------------------------------------------------|

| - | compliance with foreign laws; and |
|---|-----------------------------------|

| - | changes in domestic and foreign governmental policies. |
|---|--------------------------------------------------------|

 

**INTELLECTUAL PROPERTY**

 

We have filed for federal trademarks in order to protect our brand names in the US. We have applied for federal trademark registration for the clauses “Net Talk” (Trademark Serial No.:78772555, filed on December 15, 2005) and “Connecting The World” (Trademark Serial No.: 78783778, filed on January 3, 2006). Both trademarks were granted.

 

12

 

 

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**INTELLECTUAL PROPERTY (continued)**

 

**In addition, we have registered the following Internet domain names to secured future expansion:**

            Nettalkasia.com            Nettalkiptv.com

Nettalkla.com

Nettalkmexico.com

Nettalktelecom.com

Nettalkuk.com

Nettalkusa.com

Nettalkwifi.com

Nettalkwimax.com

Nettalkbiz.com

Nettalkbusiness.com

Nettalkcanada.com

Nettalkeurope.com

Nettalkfree.com

Nettalkglobal.com

Nettalkhome.com

Nettalkiptv.com

Nettalkla.com

Nettalkmexico.com

Nettalktelecom.com

Nettalkuk.com

Nettalkusa.com

Nettalkwifi.com

Nettalkwimax.com

 

Our software utilized for the NetTalktmVOIP/Video phone utilizes programming codes and algorithms developed by us or for us on a work-for-hire basis. We consider this software as copyrightable material, trade secrets and other proprietary material. We currently are having attorneys conduct patent searches carried out to ascertain the exact extent to which we            can seek patent or copyright protection for this software.

 

Litigation may be required to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. Any action we take to protect our intellectual property rights could be costly and could absorb significant management time and attention. In addition, as a result of any such litigation, we could lose any proprietary rights we have. If any            of the foregoing occurs, we may be unable to execute on our business plan.

 

**GOVERNMENT REGULATION**

 

*Domestic Service.*We are regulated by the national telecommunications authorities of the countries where we operate, and our operations require us to procure permits and licenses from these authorities. While we believe that we have received all required authorizations from regulatory authorities for us to offer our services in the countries in which we operate, the            conditions governing our service offerings may be altered by future legislation or regulation that could affect our business and operations.

 

*Cross-Border Service.*We provide integrated data, voice and video transmission between and among several Latin American and Caribbean countries and the US. International private line services are traditionally provided by local carriers in each country acting as correspondents and establishing dedicated telecommunications links between their facilities.

 

13

 

 

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**GOVERNMENT REGULATION (continued)**

 

In countries where we do not maintain customer premises equipment or where we are not authorized to operate in that fashion, our service uses our facilities in the originating country to connect with a correspondent local carrier in the destination country or vice-versa. To date, we have signed correspondent agreements with carriers in several Latin American and Caribbean countries.

 

*911 service.*We were required to provide this service to US customers and as such have implemented E911 in the US and Canada. We do not currently charge for this service, but we may do so at a future date, depending on market trends. We are not aware of any similar regulation in the other countries where we operate. However, regulations could be added and if we were required            to provide 911- like services in these countries we cannot predict the cost of providing such services in other countries.

***Communications Assistance for Law Enforcement Act Compliance.***

The Communications Assistance for Law Enforcement Act (“CALEA”), enacted in 1994, required telecommunications companies to rewire their networks so police could have access for wiretaps and other surveillance measures. However, CALEA specifically exempted “persons or entities insofar as they are engaged in providing information services.” The Justice Department recently filed a            FCC petition that Internet broadband and online telephone providers should be treated the same as traditional telephone companies. As a result of this petition, the FCC has adopted, on May 3, 2006 a*Second Report and Order and Memorandum Opinion and Order*(*Order*) that addresses several issues regarding implementation of the CALEA, enacted in 1994.  The primary goal of            the*Order*is to ensure that law enforcement agencies (LEAs) have all of the resources that CALEA authorizes to combat crime and support security, particularly with regard to facilities-based broadband Internet access providers and interconnected VOIP providers.  The*Order*attempts to balance the needs of law enforcement with the competing aims of encouraging the development of            new communications services and technologies while protecting customer privacy. The*First Report and Order*in this proceeding concluded that facilities-based broadband Internet access and interconnected VOIP providers were covered by CALEA. This second*Order*addresses remaining issues raised in this proceeding and provides certainty that will help achieve CALEA compliance,            particularly for packet-mode technologies. This order states as follows:

First, the*Order*affirms that the CALEA compliance deadline for facilities-based broadband Internet access and interconnected VoIP services was May 14, 2007, as established by the*First Report and Order*in this proceeding.  The*Order*concludes that this deadline gives providers of these services sufficient time to develop compliance solutions, and notes that standards developments for these services are already well underway. 

 

Second, the*Order*clarifies that the May 14, 2007, compliance date will apply to all facilities-based broadband Internet access and interconnected VoIP providers.  Applying the same compliance date to all providers will eliminate any possible confusion about the applicability of the deadline, avoid any skewing effect on            competition and preventing migration of criminal activity onto networks with delayed compliance dates.

 

Third, the*Order*explains that, absent the filing of a petition the assistance capability standards are deficient, it would be premature for the Commission to intervene in the ongoing process by which telecommunications standards-setting bodies, acting in concert with LEAs and other interested persons, are developing assistance            capability standards. 

Fourth, the*Order*permits telecommunications carriers the option of using Trusted Third Parties (TTPs) to assist in meeting their CALEA obligations and providing LEAs the electronic surveillance information those agencies require in an acceptable format.  The record indicates that TTPs are available to provide a variety of            services for CALEA compliance to carriers, including processing requests for intercepts, conducting electronic surveillance, and delivering relevant information to LEAs.  The*Order*makes clear that, if a carrier chooses to use a TTP, the carrier remains responsible for ensuring the timely delivery of call-identifying information and call content information to a LEA and for protecting subscriber privacy, as required by            CALEA.

 

14

 

 

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**GOVERNMENT REGULATION (continued)**

 

Fifth, the*Order*restricts the availability of compliance extensions under CALEA section 107(c) to equipment, facilities and services deployed prior to October 25, 1998, clarifies the role and scope of CALEA section 109(b), under which carriers may be reimbursed for their CALEA compliance costs.  More specifically, the*Order*find that sections 107(c) and 109(b) of CALEA provide only limited relief from compliance requirements.

 

Sixth, the*Order*finds that the Commission may, in addition to law enforcement remedies available through the courts, take separate enforcement action under section 229(a) of the Communications Act against carriers that fail to comply with CALEA.

 

Seventh, the*Order*concludes that carriers are responsible for CALEA development and implementation costs for post-January 1, 1995 equipment and facilities, and declines to adopt a national surcharge to recover CALEA costs.  The*Order*finds that it would not serve the public            interest to implement a national surcharge because such a mechanism would increase the administrative burden placed upon the carriers and provide little incentive for them to minimize their costs.

 

Finally, the*Order*requires all carriers providing facilities-based broadband Internet access and interconnected VoIP service to submit interim reports to the Commission to ensure that they will be CALEA-compliant by May 14, 2007, and also requires all facilities-based broadband Internet access and interconnected VoIP providers to            whom CALEA obligations were applied in the*First Report and Order*to come into compliance with the system security requirements in the Commission’s rules within 90 days of the effective date of this Order. 

 

The Company. has long expected the final ruling to be along the lines that this final order presented. With this in mind, we opted not to use a Trusted Third Party(TTP), as it ultimately does not relieve the Company of the responsibility to provide the information and or intercepts, specified, in a timely manner. Therefore, we have chosen to implement a store and forward solution that will first,            redirect the desired conversation first to a reserved, secure, server in order to store a copy of the conversation data. This data, will then automatically be forwarded to the proper authority authorized to have the data. This solution was implemented and tested.

**RESEARCH AND DEVELOPMENT**

 

We have not expended material amounts on research and development for the years ended December 31, 2007 and 2006.

 

**EMPLOYEES**

 

We have ten employees all of whom work on a full-time basis. As of December 31, 2007, our Venezuelan subsidiary, NGTV, had sixty full-time employees and sixty part-time employees. Our Colombian subsidiary, MetroIP, had five full-time employees . We consider our relationships with our employees to be good.

 

**Item 2.*****Description of Property***

 

The Company leases a switch room and antenna pad space for its telecommunications equipment.

The office is located at 1100 NW 163rd Drive, Miami, Florida 33169. The leases are effective through May 31, 2009. We believe the facilities located in Miami to be in satisfactory condition for the purposes required. Minimum annual rental payments, including sales tax and monthly electricity expense aggregate $145,415. As of December 31, 2007, the consolidated net book value of property, plant            and equipment is $5.3 million, respectively.

 

15

 

 

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**Item 2.*****Description of Property (continued)***

 

NGTV, the Company’s wholly-owned subsidiary, leases a 4,120 square feet headquarters in Caracas, Venezuela. The lease expired in September, 2007, and was renewed for approximately $7,000 per month plus utilities for additional term of two years. Each year the lease is adjusted for inflation. We believe facilities located in Venezuela to be in satisfactory condition for the purpose            required.

 

**Item 3**.***Legal Proceedings***

 

On August 18, 2006, we filed a lawsuit against Assai, Inc. (“Assai”) and Mr. Siba Padhi, the owner, agent and principal of Assai, in connection with an agreement to acquire 100% of Assai’s voting common stock on August 2005. After we delivered the purchase price of $62,000 and 1 million shares of Company common stock (worth approximately $1 million) to Padhi, we discovered that Padhi            had many material misrepresentations and omissions of facts regarding the value of Assai. As a result, we have sued for rescission of the purchase agreement and the transactions contemplated therein.

 

Our causes of action arise from alleged violations of federal and Florida laws, common law rescission, fraud, constructive trust and unjust enrichment as a result of alleged fraudulent statements, acts and omissions by Padhi. In May 2007, the case was settled and the Company received all 1 million shares, all claims were satisfied and Padhi kept purchase price of $62,000.00.

 

On May 3, 2006, Strategic Computer Solutions (“SCS”) filed an action against the Company alleging an outstanding unpaid balance for computer related equipment purportedly ordered by the Company. The Company believes the products were never received by an authorized employee of the Company. Ultimately, the Company prevailed and won a summary judgment. An appeal is still pending.

 

The Company has long had a relationship with TBeck Capital, Aritex Consultants, Warren Street Investments, Victoria, et al (collectively referred to as TBeck). TBeck was engaged as the investment banker and funds raising broker for the Company. Remuneration was in the form of stock issues and repayment of loans to the company. A Settlement Agreement was reached between TBeck Capital and the Company in            the amount of

$10,000, payable to TBeck, dated August 2, 2007, in which, mutual release of all claims by all parties to this relationship was issued.

 

In addition, we are subject from time-to-time to litigation, claims and suits arising in the ordinary course of business. As of December 31, 2007, we were not a party to any material litigation, claim or suit whose outcome we believe have a material effect on our financial statements.

 

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

 

No matters were submitted to a vote of our stockholders during the fourth quarter of the year ended December 31, 2007.

 

16

 

 

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**PART II**

 

**Item 5.*****Market for Common Equity and Related Stockholder Matters and Small Issuer Purchases of Equity Securities.***

 

**Market Information**

 

Our common stock was traded on the “Pink Sheets” and is now traded on “Gray Market”, under the symbol “ILKG.OB.” The following table sets forth the range of high and low bid quotations for each of quarter of the last two fiscal years, adjusted to reflect the reverse split on a three - one basis such that each old share represent 1/3 of a new share effected in February,            2005. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Prior to the reversal, our common shares were quoted on the Pink Sheets under the symbol “TDIH.”

|                   |   | **High** |   |   | **Low** |   |
|------------------------|--------|----------|--------|--------|---------|--------|
| ***Fiscal Year 2006*** |   |     |   |   |    |   |
|                   |   |     |   |   |    |   |
| First Quarter          |   | $3.04    |   |   | $1.25   |   |
| Second Quarter         |   | $2.85    |   |   | $1.25   |   |
| Third Quarter          |   | $1.95    |   |   | $0.85   |   |
| Fourth Quarter         |   | $1.75    |   |   | $0.35   |   |
|                   |   |     |   |   |    |   |
| ***Fiscal Year 2007*** |   |     |   |   |    |   |
|                   |   |     |   |   |    |   |
| First Quarter          |   | $0.76    |   |   | $0.14   |   |
| Second Quarter         |   | $0.60    |   |   | $0.18   |   |
| Third Quarter          |   | $0.50    |   |   | $0.15   |   |
| Fourth Quarter         |   | $0.55    |   |   | $0.10   |   |

   

On December 31, 2007, the closing price our common stock on the Pink Sheets was $0.10 and there were approximately 179 holders of record of our common stock.

 

The transfer agent and registrar for our common stock is Fidelity Transfer Company.

 

**Dividends**

 

We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, for the operation and expansion of our business, and therefore do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of the Board of Directors, and will be dependent upon our financial condition, results of            operations, capital requirements and other factors as the Board may deem relevant at that time.

 

**Recent Sales of Unregistered Securities - None**

 

| **Item 6.   ****Management’s Discussion and Analysis or Plan of Operation** |
|--------------------------------------------------------------------------------------------------|

 

**FORWARD-LOOKING STATEMENTS**

 

This annual report contains forward-looking statements defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “plans”,            “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels            of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us include, but are not limited to:

 

17

 

 

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**FORWARD-LOOKING STATEMENTS (continued)**

 

| **•** |   | our ability to finance our activities and maintain our financial liquidity,                       |   |
|------------|--------|---------------------------------------------------------------------------------------------------|--------|
| **•** |   | our ability to enter into new agreements and to maintain and renew existing licensing agreements, |   |
| **•** |   | stability of foreign regimes, specifically Venezuela,                                             |   |

 

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

 

**MATTERS EFFECTING SHORT-TERM OR LONG-TERM LIQUIDITY**

 

Effective March 15, 2006, the Company signed a Share Purchase Agreement (the “Agreement”) with NERA ASA, a Norwegian company (“Nera”), to acquire all of the issued and outstanding common stock of Communication Networks Holdings, Ltd., an exempted company incorporated and existing under the laws of Bermuda (“CNH”). The acquisition included CNH’s ownership of all            of the issued and outstanding capital stock of Telecomunicaciones NGTV, S.A., (“NGTV”), a Venezuelan corporation engaged in the provision of telecommunication services in that country. Subject to the terms of the Agreement, we purchased CNH, free from any lien, charges and encumbrances, for a purchase price of $1.75 million. Additional consideration included:

 

$2 million within 150 days of the closing date in order to fund the investment and working capital needs of NGTV. Of this amount, $979,179 will be exclusively used to fund unpaid salaries and severance obligations of NGTV. On August 3, 2006, our board of directors authorized the issuance of four million shares of restricted stock ($0.50 per share) for compliance with this provision            of the Agreement.

 

As part of further negotiations for a debt reduction program and further additional negotiations for the purchase of CNH, we utilized the services of Lane Bridge Overseas, Ltd., an affiliate of Nera. In consideration of such services, we have granted Lane an exclusive and irrevocable purchase option through December 31, 2009 for 2 million shares of our common stock. These shares will            be valued at the abovementioned per share price of $0.50 cents.

 

**CHANGES IN FINANCIAL STATEMENT BALANCES**

 

**Financial Condition – Balance Sheet**

 

Net property, plant and equipment decreased by $997,660. Decrease was due to depreciation expense of $1,104,829 and new acquisitions of $283,727 during 2007. Total assets decreased by $669,050. Total current assets increased by $167,579, Property, plant and equipment (net) decreased by $997,660 and Prepaid value added tax increased by $241,929.            Total current liabilities increased by $1,728,397. Total long term liabilities increased by $739,152.            Total stockholders’ equity decreased by $2,975,606. Decrease was due to a current net loss of $3,000,606.            During our fiscal year ended December 31, 2006, funds were raised from two primary sources: (i) the issuance of restricted common stock and (ii) a note offering The note offering is in accordance with a Note and Warrant Purchase Agreement, dated November 29, 2005; the note bears interest at 10% and matures May 29, 2007. Maturity date was extended to December 31, 2007.

 

**Results of Operations**

 

Gross revenues for 2007 increased by $4,008,893. Increase was due to an increase in sales activities. Cost of sales increased by $3,783,297. Increase was due to an increase in cost of sales activities.            Gross profit increased by $225,596. The increase was due to increase in sales activities.            Total expenses decreased by $426,009. Decreased was due to less amount for amortization other expenses.            Bad debt recovery was recorded during 2007 in the amount of $35,930. Forgiveness of debt (telecommunication expenses) was recorded during 2007 in the amount of $295,683. Interest expense increased by $267,023. Increase was due to new Senior debentures issued during 2007.            Net loss for 2007 decreased by $1,546,897. Decrease was due to increase in sales, decrease in total expenses and forgiveness of debt recorded during 2007.

 

18

 

 

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**LIQUIDITY AND CAPITAL RESOURCES**

On November 29, 2005, the Company issued a Series A Senior Convertible Note for $2 million, resulting in net proceeds of $1,767,000. The notes bear interest at 10% and mature on May 29, 2007. Closing costs of $233,000 are being amortized over eighteen months, commencing in December 2005. One- fourteenth (1/14th) of the principal and all accrued but unpaid interest is due monthly; the principal            and accrued interest may be paid in registered shares of the Company’s common stock at a conversion price equal to 85% of the average closing bid price for the ten trading days preceding the payment due date. In connection with this agreement, the Company issued warrants to purchase an aggregate of 6,181,822 shares of common stock (at an exercise price of $.75 per share): (i) 5,454,546 to the note holders and (ii) 727,276 to the placement agents.

 

On February 28, 2006, the Company issued two Series B Senior Convertible Notes for $1,297,550, resulting in net proceeds of $1,142,635. The notes bear interest at 10% percent and mature on August 28, 2008. Closing costs of $154,915 will be amortized over the term of the loan. One-fourteenth (1/14th) of the principal and all accrued but unpaid interest is due monthly; the principal and            accrued interest may be paid in registered shares of the Company’s common stock at a conversion price equal to 85% of the average closing bid price for the ten trading days preceding the payment due date.

In connection with this agreement, the Company issued warrants to purchase an aggregate of 5,882,222 shares of common stock: (i) 5,190, 198 to the note holders and (ii) 692,024 to the placement agents.

 

For both the Series A Senior Convertible Note, dated November 29, 2005, and the two Series B Senior Convertible Notes, dated February 28, 2006, one-fourteenth (1/14th) of the principal and all accrued but unpaid interest was to be repaid monthly, commencing April 2006 and July 2006, respectively. In consideration of the Company reducing the exercise prices of the warrants to $1.05 per share,            the note holders have agreed to delay payment until August 2008.

 

**CRITICAL ACCOUNTING POLICIES**

 

In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant effect on our revenues, income (loss) from operations, and net income (loss), as well as on the value of certain assets on our consolidated balance sheet. We believe that there are several accounting policies that are critical to an understanding of our historical and future performance as            these policies affect the reported amounts of revenues, expenses, and significant estimates and judgments applied by management. While there are a number of accounting policies, methods and estimates affecting our consolidated financial statements, areas that are particularly significant include revenue recognition and stock-based compensation. In addition, please refer to Note 1 to the accompanying financial statements for further discussion of our significant accounting            policies.

 

**Revenue Recognition**

 

Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) 101,*Revenue Recognition*, as amended by SAB 104, outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with the            Securities and Exchange Commission. Management believes that the Company’s revenue recognition policy conforms to SAB 104.

 

We evaluate the criteria of the FASB Emerging Issues Task Force (“EITF”) 99-19,*Reporting Revenue Gross as a Principal Versus Net as an Agent,*in determining whether it is appropriate to record the gross amount of revenue and related costs or the net amount earned as commissions. The Company is the primary obligor, has latitude in            establishing prices and selecting suppliers, establishes product specifications, and has the risk of loss as it relates to the ultimate collection of accounts receivable. However, the Company’s revenue is recorded on net basis in 2007 and 2006.

 

**Stock-Based Compensation**

 

For the year ended December 31, 2007 and 2006, the Company has not issued any share based payments to its employees.

 

**Derivative Financial Instruments**

 

As of this date, the Company has not entered into any derivative transactions.

 

19

 

 

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***Item 7. Financial Statements***

 

Our financial statements, including the notes thereto, together with the report of independent auditors thereon are presented as a separate section of this Form 10-KSB, and the following are attached hereto beginning on Page F-1:

Financial Statements:

Report of Independent, Registered Public Accounting Firm Audited Balance Sheets as of December 31, 2007. and 2006

Audited Statements of Operations for years ended December 31, 2007, and 2006

|   | Audited Statements of Cash Flows for years ended December 31, 2007, and 2006 |
|--------|-----------------------------------------------------------------------------------|

Audited Statements of Stockholders equity (Deficiency in Assets) for years ended December 31, 2007, and 2006

Notes to audited financial statements

 

***Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure – None.***

 

***Item 8 A and T Controls and Procedures***

 

***Evaluation and Disclosure Controls and Procedures***

 

***Disclosure controls and procedures (defined in Rule 13(a) – 15(e)), are controls and other procedures that are designed to ensure that information required to be disclosed by a public company in the reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.***

***Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a public company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing            similar***

***functions, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures include many aspects of internal control over financial reporting.***

 

***In connection with the preparation of this annual report on Form 10 KSB, management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, pursuant to Rule 13 a – 15 under the Exchange Act, also in compliance with Item 308T of Regulation S – K. Based upon management’s            evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level at December 31, 2007.***

 

***Management’s Report on Internal Control over Financing Reporting***

 

***Management of Interlink Global Corporation is responsible for establishing and maintaining adequate internal control over financing reporting as defined in Rule 13 a – 15 under the Exchange Act, also in compliance with Item 308T of Regulation S – K. Internal control over financial reporting refers to a process designed by, or under the supervision of, our Chief            Executive Officer and Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including those policies and procedures that:***

 

20

 

 

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***Management’s Report on Internal Control over Financing Reporting (contimued)*** 

 

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

 

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

 

|   | - | ***provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.*** |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

***Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of the prevention or detection of misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate of changes in conditions, or that the degree of compliance with the policies or procedures may            deteriorate.***

 

***With the active participation of the Chief Executive Officer and the Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting base on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission (the COSO Criteria). Management reviewed the            results of its assessment with the Board of Directors. Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2007.***

 

**Changes in Internal Controls**

 

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date their evaluation. There were no significant deficiencies or material weaknesses, and therefore, no corrective actions were taken.

 

***Item 8B. Other Information –***

 

***Effective April 8, 2008, the Company lost one of its main providers of telecommunication traffic (destination). At the present time the Company is working on replacing and reinstating its destinations.***.

 

**During 2007 the Company was placed on “hold trading” by the Security and Exchange Commission for 20 days. At present, the Company has filed “15 C 211” with FINRA for reinstatement to trade. Although the 20 days “hold” period was lifted, SEC has not officially closed the case.**

 

**During 2007 and 2006 there were certain Press Releases that were reported and did not fully materialized.**

 

**Effect of these Press Releases were not material to presentation of financial statements for the Company.**

 

**Effective October 2007, Mr. Severino Rivano, who served as President of CNH/NHTV, our Venezuela affiliate, is no longer employed.**

 

21

 

 

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**Item 9.  *****Directors, Executive Officers, Promoters, Control Persons and Corporate Governance ; Compliance with Section*** ***16(a) of the Exchange Act.***

 

**MANAGEMENT**

 

The following table identifies our current executive officers and directors, their respective offices and positions, and their respective dates of election or appointment:

 

|  

**Name**              |  

**Age** |  

**Position Held**                       | **Initial Election or Appointment Date** |
|-------------------------------|-----------------|-------------------------------------------------|------------------------------------------|
|  

Anastasios Kyriakides |  

60      | Chairman, Chief Executive Officer and Secretary |  

February 2004                    |
| Kenneth A. Hosfeld            | 57              | Executive Vice President and Director           | February 2004                            |
|  

Bill Rodriguez        |  

60      | Chief Financial Officer                         |  

April 2007                       |
| Stephan M. Gardner            | 64              | Vice President and Director                     |  

November 2004                    |

 

There are no family relationships between any two or more of our directors or executive officers. Our executive officers are appointed by our board of directors and serve at the board’s discretion. There is no arrangement or understanding between any of our directors or executive officers and any other person pursuant to which any director or officer was or is to be selected as a director or            officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the current board of directors. There are also no arrangements, agreements or understandings to our knowledge between non-management stockholders that may directly or indirectly participate in or influence the management of our affairs.

 

None of our directors or executive officers has, during the past five years:

 

|   | **•** | had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time, |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | been convicted in a criminal proceeding and none of our directors or executive officers is subject to a pending criminal proceeding, |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities, or |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

22

 

 

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**BUSINESS EXPERIENCE**

 

ANASTASIOS KYRIAKIDES. Mr. Kyriakides has been our President and CEO since inception. Mr. Kyriakides received a Bachelor of Science degree in business from Florida International University in 1975; in 1977, he received a degree in investment banking from the American Institute of Banking. Mr. Kyriakides has extensive experience in the field of shipping investment banking and venture capital and the            process of public and private offerings. From 1979 to the present, Mr. Kyriakides has consulted for numerous companies in the areas of shipping, travel, banking, and electronics. His cruise ship career started with Carnival Cruise line out of the Port of Miami, and continued to a successful start up with Tropicana Cruises; one of the first gaming ships out of the Port of Miami. In 1994, Mr. Kyriakides became the Chairman of Montgomery Ward Travel, a company created to provide full            travel services to eight million Montgomery Ward customers and credit card holders; he served in this capacity from 1994 to 1996. Mr. Kyriakides had previously organized the successful start-up of Seawind Cruise Line in 1990; there, he was the founder, and later, the Chairman, CEO, and Secretary until 1994. In 1984 Mr. Kyriakides founded Regency Cruise Line, the world’s first publicly traded company in passenger shipping, and served as its Chairman and Secretary until 1987. In            1983, Mr. Kyriakides founded the Mylex Corporationwww.mylex.comto develop and produce the world’s first hand-held optical scanner and VGA card for personal computers. As the President and Chairman, Mr. Kyriakides guided Mylex from its beginning as a private company to its becoming a public company traded on the NASDAQ under the stock symbol MYLX until it was acquired as a wholly-owned subsidiary            of IBM (NYSE: IBM). Mr. Kyriakides, in 1983, was the founder and Chairman of Tower Bank NA, a full service commercial bank, with three offices, headquartered in Dade County, Florida.

Mr. Kyriakides, in 1980, worked at Delcor Industries of Hollywood, Florida, an electronic manufacturing facility, assembling OEM products for various electronic companies including IBM mainframe and cable division employing over 150 skilled employees. Mr.Kyriakides, in 1979, was the founder and Chairman of Lexicon Corporation, the world first hand-held electronic language translator the LK3000 that            translated in to 12 different languages. From its inception to its becoming a publicly traded company on the NASDAQ, under the symbol LEXI, until it was acquired by Nixdorf Computers of Germany. From 2001 to 2004 Mr. Kyriakides was the founder and Chairman of the on-line brokerage firm NowTrade, Corp. and also the founder and chairman of Internet Stock Market Corp. an Investment Relations and Public Relations firm for Public Companies.

KENNETH A.HOSFELD. Mr. Hosfeld has served as our Executive Vice President and a member of our Board of Directors since February 2004. Kenneth’s background includes over twenty-two years of international sales, marketing, and business management in the telecommunications industry. Before co-founding NetExpress, he was the Regional Director of Brazil, the Andinos, and the Caribbean for Tellabs, Inc            from 1999 to September 2002. There, he negotiated deals as large as $350 million. He secured Tellabs’ first “turn-key” contract (a complete, fully managed network deployment including all products and services and project financing). He opened Tellabs’ offices in Brazil and regularly exceeded revenue targets by 130%. Prior to that, Kenneth was Vice President of Nera Latin America, a subsidiary of Nera Telecommunications (formerly ABB), with full P&L            responsibility for the region. He opened offices throughout Latin America including Brazil, Colombia, Mexico, and Venezuela and additionally penetrated the Mexican and Chilean markets. He also worked at OneRing International from January 2003 to February 2004 as their Vice President, global sales and marketing. Prior to Latin America, Kenneth was responsible for sales in Africa and in China. At Nera, Kenneth regularly grew sales in his region between 80-200%, annually. He speaks            over six languages including fluent Spanish and Portuguese. Mr. Hosfeld also serves on the Board of Directors of our wholly-owned subsidiaries, C N H Bermuda and New Global Telecom De Venezuela (NGTV).

 

Bill Rodriguez, is a Florida Certified Public Accountant (CPA), he earned a bachelors degree from the University of Miami in Coral Gables, FL, with majors in Accounting and Business Administration. He also earned a Master of Business Administration (MBA) from Nova Southeastern University in Davie, FL. He has extensive accounting and financial reporting experience in Banking, Real Estate Brokerage,            Property Management and telecommunication industries. He was also an auditor/examiner for the Federal Deposit Insurance Corporation (FDIC).

 

23

 

 

----

 

**BUSINESS EXPERIENCE (continued)**

 

STEPHAN M. GARDNER. Mr. Gardner earned a bachelor’s degree from the University of Miami in Coral Gables, Florida, with majors in Business Administration and Journalism. He has extensive experience in the fields of investment banking, sales consulting and television production. From 1970-1979, Mr. Gardner was an independent television producer headquartered in San Juan, Puerto Rico. From 1979, he            owned several companies, which provided consulting services in the fields of banking, health care, and sales administration in California as well as Florida. From January 2001 to November 2004, Mr. Gardner served as Sales Manager and Representative for Solaroll Shade and Shutter, and Roll-A-Way, Storm and Security Shutters, of St.Petersburg, Florida, a division of Valco Enterprises.Beginning in 1984, as an investment banker, Mr. Gardner structured public            offerings of stock, and stock syndications in the fields of health, medical products, and leisure activities, (cruise ships). In 1989, Mr. Gardner became the owner/operator of Med Test, Inc., a private company, which is a provider of mobile medical testing services. For the last two decades, Mr. Gardner has worked as a marketing and public relations consultant.

 

**Board of Directors**

 

Our Board of Directors currently consists of five members. Our by laws provide that our directors be elected at each annual meeting of the stockholders. Their term of office will run until the next annual meeting of the stockholders and until their successors have been elected and qualified or until their earlier death, resignation or removal.

 

**Board Meetings and Committees**

The Board of Directors held six meetings during 2006. The Board of Directors now has one standing committees - an Audit Committee. Current committee members are listed below. The functions of the Audit Committee are to recommend selection of independent public accountants to the Board of Directors, to review the scope and results of the year-end audit with management and the independent auditors, to            review the Company’s accounting principles and its system of internal accounting controls and to review the Company’s annual and quarterly reports before filing with the Securities andExchange Commission. The Audit Committee was formed in 2006 and did not meet during 2006. The current members of the Audit Committee are Anastasios Kyriakides and Bill Rodriguez.

Mr. Bill Rodriguez, our Chief Financial Officer, serves as our financial expert regarding generally accepted accounting principals and general application of such principles in connection with the accounting for estimates and accruals, including an understanding of internal control procedures and policies over financial reporting, and maintains sufficient experience preparing auditing, analyzing or            evaluating financial statements in such depth and breadth as may be required of an audit committee financial expert. However, Mr. Rodriguez is not an elected director of the company.

 

**DIRECTOR COMPENSATION**

 

We have adopted a Code of Ethics as of October 4, 2006.

 

**Compliance with Section 16(a) of Exchange Act**

Section 16(a) of the Securities Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the Securities and Exchange Commission. Directors, executive officers and persons who own more than 10% of our common stock are required by Securities and Exchange Commission regulations            to furnish to us copies of all Section 16(a) forms they file.To our knowledge, based solely upon review of the copies of such reports received or written representations from the reporting persons, we believe that during our 2006 fiscal year none of our directors, executive officers and persons who own more than 10% of our common stock made any Section 16(a) filings if they were so required.

 

 

24

 

 

----

 

***Item 10. Executive Compensation***

 

**SUMMARY OF COMPENSATION**

The following table summarizes all compensation received by our Chief Executive Officer for services rendered to us and several other officers who earned more than $100,000 in fiscal year 2006. These persons are referred to as our Named Executive Officers.

 

**SUMMARY COMPENSATION TABLE**

 

|                                           |     ANNUAL COMPENSATION   |   | LONG TERM COMPENSATION AWARDS                       |            |        |
|------------------------------------------------|---------------------------------------------------------|--------|---------------------------------------------------------------|------------|--------|
|                                                |                                                         |
| NAME AND                    PRINCIPAL POSITION |                                                    | YEAR   |                                                          | SALARY ($) |   | BONUS ($) |   | OTHER ANNUAL                    COMPENSATION |   | SECURITIES UNDERLYING     OPTIONS # OF SHARES |
|                                                |                                                         |
|                                           |                                                    |        |                                                               |            |        |  |  |  |  |  |  |  |
| Anastasios Kyriakides,                         |                                                    | 2007   |                                                          | $76,500    |   | NONE |   | NONE |   | NONE |   |  |
| Chairman, CEO and Secretary                    |                                                    | 2006   |                                                          | $59,500    |   | NONE |   | NONE |   | NONE |   |  |
| and Director                                   |                                                    |        |                                                               |            |        |  |  |  |  |  |  |  |
|                                           |                                                    |        |                                                               |            |        |  |  |  |  |  |  |  |
| Kenneth Hosfeld,                               |                                                    | 2007   |                                                          | $56,250    |   | NONE |   | NONE |   | NONE |   |  |
| VP and Director                                |                                                    | 2006   |                                                          | $50,700    |   | NONE |   | NONE |   | NONE |   |  |
|                                           |                                                    |        |                                                               |            |        |  |  |  |  |  |  |  |
| Severino Rivano,                               |                                                    | 2007   |                                                          | NONE       |   | NONE |   | NONE |   | NONE |   |  |
| VP and Director                                |                                                    | 2006   |                                                          | $25,700    |   | NONE |   | NONE |   | NONE |   |  |
|                                           |                                                    |        |                                                               |            |        |  |  |  |  |  |  |  |
| Stephan Gardner,                               |                                                    | 2007   |                                                          | $22,000    |   | NONE |   | NONE |   | NONE |   |  |
| VP and Director                                |                                                    | 2006   |                                                          | $29,500    |   | NONE |   | NONE |   | NONE |   |  |
|                                                |                                                         |

 

**OPTION GRANTS TO EXECUTIVE OFFICERS IN 2007 - None**

 

**EMPLOYMENT ARRANGEMENTS**

 

We have entered into an Employment Agreement with our Chief Executive Officer, Anastasios Kyriakides.

In consideration of his services to us, we have agreed to pay him a base salary of $52,000 plus certain bonuses and awards if the Company achieves certain profitability levels and adopts certain incentive compensation plans. As of December 31, 2006, none of these incentive arrangements and plans had been realized. The agreement is effective through December 31, 2008.

 

***Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters***

We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. Except as otherwise indicated, we believe that the beneficial owners listed below, based on the information furnished by these owners, have sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to applicable community property laws.            With respect to the table below, we have based our calculation of the percentage of beneficial ownership of 26,048,000 shares of common stock outstanding as of December 31, 2007.

In computing the number of shares of common stock beneficially owned by a person and the percent ownership of that person, we deemed outstanding shares of common stock subject to warrants or options held by that person that are currently exercisable or exercisable within 60 days of December 31, 2007. We did not deem these shares outstanding for purposes of computing the percent ownership of any other            person.

 

 

25

 

 

----

 

 

***Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (cont)***

 

The following tables set forth certain information regarding beneficial ownership of our common stock as of December 31, 2007 by (i) each person who is known by us to own beneficially more than five percent (5%) of the outstanding shares of common stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. Unless otherwise stated, their            address is c/o Interlink Global Corporation, 1100 NW 163rd Drive, No. Miami, FL 33169.

 

COMMON STOCK

|                                                                             |   |                                                                       |   |                                             |
|----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|--------------------------------------------------|
| NAME OF DIRECTOR, OFFICER                        AND BENEFICIAL OWNER            |   | NUMBER OF SHARES OF COMMON STOCK                        BENEFICIALLY OWNED |   | PERCENTAGE OF OUTSTANDING SHARES OF COMMON STOCK |
|                                                                             |   |                                                                            |   |                                                  |
| Anastasios Kyriakides                                                            |   | 7,569,000(1)                                                               |   | 18.44%                                           |
|                                                                             |   |
| Kenneth Hosfeld                                                                  |   | 2,329,000                                                                  |   | 5.67%                                            |
|                                                                             |   |                                                                       |   |                                             |
| Stephan M. Gardner                                                               |   | 1,800,000                                                                  |   | 4.39%                                            |
|                                                                             |   |
| Severino Rivano                                                                  |   | 1,001,000                                                                  |   | 2.44%                                            |
|                                                                             |   |
| All Officers & Directors                         As a Group (6 persons) |   | 13,349,000                                                                 |   | 32.52%                                           |
|                                                                             |   |
| Total                                                                            |   | 26,048,000                                                                 |   | 63.46%                                           |

 

 

|   | (1) | Includes 600,000 Shares held by Anastasios & Maria Kyriadides as Joint Tenants, 3,669,000 Shares held by the Maria, Nicholas, Stephanie, Peter Kyriakides Trust and 3,300,000 shares held by the Maria, Nicholas, Stephanie, Peter Kyriakides Trust |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**CHANGE OF CONTROL**

 

To the knowledge of management, there are no present arrangements or pledges of securities of our company that may result in a change in control..

 

***Item 12. Certain Relationships and Related Transactions, and Director Independence.***

 

We reflected a Due to Shareholder’s loan in the amount of $349,883 outstanding at December 31, 2007 – for one year term and no interest.

At present, three Directors of the Company are active employees, namely, President, EVP and VP Sales.

 

**Item 13. Exhibits**

 

The following documents are filed as part of this report:

 

(1) financial statements - see index to accompanying audited financial statements under item 7 above.

(2) Exhibits - see index to exhibits following the signatures to this report.

 

**Item 14. Principal Accountants Fees and Services**

 

The following table sets forth fees billed to the Company by our auditors during the fiscal years ended December 31, 2007 and December 31, 2006 for: services rendered for the audit of our annual financial statements and the review of our quarterly financial statements.

 

|   | December 31, 2007 | December 31, 2006 |
|--------|-------------------|-------------------|

 

|   | Audit Fees | $ 201,192 | $80,438 |
|--------|------------|-----------|---------|

 

 

26

 

 

----

 

 

SIGNATURES,

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 28th day of April,2008.

 

|  |  | Interlink Global Corporation                    By:                    **/s/ Anastasios Kyriakides**                           ———————————————————**                                Anastasios Kyriakides                                    President and Chief Executive Officer** |
|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

27

 

 

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**POWER OF ATTORNEY**

 

**KNOW ALL PERSONS BY THESE PRESENTS**, that each person whose signature appears below constitutes and appoints Anastasios Kyriakides and Kenneth Hosfeld, and each or any one of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to            sign any and all amendments to this Annual Report on Form 10-KSB, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby            ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substituted, may lawfully do or cause to be done by virtue hereof.

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

 

| **Signatures****——————————————**                                                                                                                 |   | **Title****——————————————**         |   | **Date****——————** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|
| **         **                                                                                                                                                                           |   |                                                                                                                    |   |                                                   |
| **/s/ ANASTASIOS KYRIAKIDES                    ——————————————                      ANASTASIOS KYRIAKIDES**                             |   | **Chief Executive                    Officer, Chairman and Secretary                    (Principal Executive Officer)** |   | **December 11, 2008**                                  |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
| **    /s/ Bill Rodriguez                    ——————————————                         Bill Rodriguez** |   | **Chief Financial Officer                    (Principal Financial and                    Accounting Officer)**          |   | **December 11, 2008**                                  |
| ** **                                                                                                                                                                                                                           |   |                                                                                                                         |   |                                                        |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
| **  /s/ KENNETH A. HOSFELD                    ——————————————                        KENNETH A. HOSFELD**           |   | **VP & Director**                                                                                                   |   | **December 11, 2008**                                  |
|                                                                                                                                                                                                                                      |   |                                                                                                                    |   |                                                   |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
| **     Stephan Gardner                    ——————————————**                                                              |   | **Director**                                                                                                            |   | **December 11, 2008**                                  |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
|                                                                                                                                                                                                                                 |   |                                                                                                                    |   |                                                   |
| **     Severino Rivano                    ——————————————**                                                              |   | **Director**                                                                                                            |   | **December 11, 2008**                                  |

 

 

 

28

 

 

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| Dohan and CompanyCertified Public Accountants

A Professional Association | 7700 North Kendall Drive, 200Miami, Florida      33156-7564Telephone            (305) 274-1366Facsimile               (305) 274-1368E-mail                     info@uscpa.comInternet                  www.uscpa.com |
|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|--------|---------------------------------------------------------|

 

Stockholders and Board of Directors

Interlink Global Corporation and Subsidiaries

North Miami, Florida

 

We have audited the accompanying consolidated balance sheets of Interlink Global Corporation and Subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders' equity (deficiency in assets) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an            opinion on these financial statements based on our audits. We did not audit the financial statements of Communications Networks Holding, Ltd., a wholly-owned subsidiary, which statements reflect total assets of $ 8,446,923 and $ 8,674,251 as of December 31, 2007 and 2006, respectively, and total revenues of $9,963,537 and $ 5,570,838 for the years then ended. Those statements were audited by MGI P&P Asociados whose report has been furnished to us, and our opinion, insofar as it            relates to the amounts included for Communications Networks Holding, Ltd., is based solely on their report.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits 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 audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit            also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Interlink Global Corporation and Subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company generated negative cash flows from operating activities during the past year. The Company has negative working capital of approximately $3,088,842 and an accumulated deficit of approximately $2,914,000 for the year ended December            31, 2007. These factors, and others, raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue operations is subject to its ability to secure additional capital to meet its obligations and to fund operations. Management's plans in regard to these matters are also described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this            uncertainty.

 

|   | /s/ Dohan and Company, P.A.                            Certified Public Accountants |
|--------|-------------------------------------------------------------------------------------|

 

Miami, Florida

April 30, 2008

 

29

 

----

**EXHIBITS.**

| 4.10         | Registration Rights Agreement dated as of February 28, 2006 by and among certain lenders and the Registrant             |
|--------------|-------------------------------------------------------------------------------------------------------------------------|
| 10.3         | Note and Warrant Purchase Agreement between certain lenders and the Registrant dated as of February 28, 2006            |
|  

10.4 |  

Amendment to Note and Warrant Purchase Agreement between certain lenders and the Registrant dated 10/06.        |
| 10.7         | Share Purchase Agreement dated as of March 15, 2006 by and between the Registrant and NERA ASA. (1)                     |
| 10.8         | Share Purchase Option Agreement dated as of March 15, 2006 by and between the Registrant, Lane Bridge Overseas Ltd. (1) |
| 14.1         | Code of Ethics                                                                                                          |
| 21.1         | List of subsidiaries                                                                                                    |
| 31.1         | Certification of Chief Executive Officer                                                                                |
| 31.1         | Certification of Chief Executive Officer                                                                                |
| 31.2         | Certification of Chief Financial Officer                                                                                |
| 32.1         | Section 1350 Certification of Chief Executive Officer                                                              |
| 32.2         | Section 1350 Certification of Chief Financial Officer                                                              |

 

30

 

 

----

**INTERLINK GLOBAL CORPORATION AND SUBSIDIARIES** 

 

Consolidated Balance Sheets 

December 31, 2007 and 2006 

| ASSETS                                                                                                                                                             |   | 2007   |   | 2006       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|------------|--------|
|                                                                                                                                                               |   |   |   |       |   |   |   |   |
| CURRENT ASSETS                                                                                                                                                     |   |   |   |       |   |   |   |   |
|    Cash and equivalents                                                                                                                             |   |   | $      | 151,394    |   | $ | 40,477 |   |
|    Accounts receivable, less allowance of $149,794                         in 2007, $570,486 in 2006                       |   |   |   | 783,362    |   |   | 957,534 |   |
|    Advance to suppliers                                                                                                                             |   |   |   | 46,465     |   |   | 56,519 |   |
|    Prepaid expenses                                                                                                                                 |   |   |   | 456,703    |   |   | 133,916 |   |
|    Deferred loan costs, net                                                                                                                         |   |   |   | —    |   |   | 124,967 |   |
|           Total current assets                                                                                   |   |   |   | 1,437,924  |   |   | 1,313,413 |   |
|                                                                                                                                                               |   |   |
| Property, Plant and Equipment                                                                                                                                      |   |   |   |       |   |   |   |   |
|    Telecommunications equipment                                                                                                                     |   |   |   | 11,885,443 |   |   | 11,605,649 |   |
|    Leashold improvements                                                                                                                            |   |   |   | 118,844    |   |   | 118,844 |   |
|    Furniture and fixtures                                                                                                                           |   |   |   | 7,221      |   |   | 7,177 |   |
|    Other equipment                                                                                                                                  |   |   |   | 16,888     |   |   | 15,499 |   |
|    Software and licenses                                                                                                                            |   |   |   | 179,364    |   |   | 176,864 |   |
|    Vehicles                                                                                                                                         |   |   |   | 61,506     |   |   | 61,506 |   |
|           Total Property, plant and equipment                                                                    |   |   |   | 12,269,266 |   |   | 11,985,539 |   |
|    Less accumulated Depreciation                                                                                                                    |   |   |   | (7,098,392 | )      |   | (5,817,005 | ) |
|    Property, plant and equipment, net                                                                                                               |   |   |   | 5,170,874  |   |   | 6,168,534 |   |
| Land                                                                                                                                                               |   |   |   | 162,567    |   |   | 162,567 |   |
| Prepaid value added tax                                                                                                                                            |   |   |   | 805,834    |   |   | 563,905 |   |
| Deferred tax asset, less valuation allowance of                      $1,903,270 in 2007 and $1,225,328 in 2006.                                          |   |   |   | —    |   |   | — |   |
| Other assets                                                                                                                                                       |   |   |   | 43,068     |   |   | 80,898 |   |
|                                                                                                                                                               |   |   |   |       |   |   |   |   |
| TOTAL ASSETS                                                                                                                                                       |   |   | $      | 7,620,267  |   | $ | 8,289,317 |   |
|                                                                                                                                                               |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                         |   |   |   |       |   |   |   |   |
|                                                                                                                                                               |   |   |   |       |   |   |   |   |
| CURRENT LIABILITIES                                                                                                                                                |   |   |   |       |   |   |   |   |
|    Accounts payable                                                                                                                                 |   |   | $      | 3,130,594  |   | $ | 2,667,489 |   |
|    Accrued expenses                                                                                                                                 |   |   |   | 1,072,724  |   |   | 185,969 |   |
|    Accrued interest                                                                                                                                 |   |   |   | 835,165    |   |   | 324,796 |   |
|    Notes payable                                                                                                                                    |   |   |   | —    |   |   | 51,873 |   |
|    Senior convertible debentures, current portion                                                                                                   |   |   |   | 4,772,550  |   |   | 706,618 |   |
|    Advances from officers                                                                                                                           |   |   |   | 134,558    |   |   | 259,883 |   |
|    Due to stockholder                                                                                                                               |   |   |   | 171,186    |   |   | 90,000 |   |
|           Total current liabilities                                                                              |   |   |   | 10,116,777 |   |   | 4,286,628 |   |
|                                                                                                                                                               |   |   |
| LONG-TERM LIABILITIES                                                                                                                                              |   |   |   |       |   |   |   |   |
|    Accrual for labor indemnities                                                                                                                    |   |   |   | 195,425    |   |   | 866,360 |   |
|    Customer deposits                                                                                                                                |   |   |   | —    |   |   | 83,846 |   |
|    Other                                                                                                                                            |   |   |   | 396,907    |   |   | 307,302 |   |
|    Senior convertible debentures, non-current portion                                                                                               |   |   |   | —    |   |   | 2,590,932 |   |
|           Total long-term liabilities                                                                            |   |   |   | 592,332    |   |   | 3,848,440 |   |
| TOTAL LIABILITIES                                                                                                                                                  |   |   |   | 10,709,109 |   |   | 8,135,068 |   |
|                                                                                                                                                               |   |   |
| Minority Interest                                                                                                                                                  |   |   |   | (175,002   | )      |   | (14,009 | ) |
|                                                                                                                                                               |   |   |
| COMMITMENTS AND CONTINGENCIES (NOTES 2, 5, AND 6)                                                                                                                  |   |   |   |       |   |   |   |   |
|                                                                                                                                                               |   |   |   |       |   |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)                                                                                                                        |   |   |   |       |   |   |   |   |
|    Common Stock: $0.001 par value,                                                                                                                  |   |   |   | 47,849     |   |   | 47,599 |   |
|      100,000,000 shares authorized; 47,598,922                           shares issued and outsanding. |   |   |   |       |   |   |   |   |
|    Additional paid-in-capital                                                                                                                       |   |   |   | 4,870,868  |   |   | 4,846,118 |   |
|    Accumulated deficit                                                                                                                              |   |   |   | (7,832,557 | )      |   | (4,725,459 | ) |
| TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)                                                                                                                  |   |   |   | (2,913,840 | )      |   | 168,258 |   |
|                                                                                                                                                               |   |   |   |       |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                   |   |   | $      | 7,620,267  |   | $ | 8,289,317 |   |

 

(DEFICIENCY IN ASSETS)

 

The accompanying notes are an integral part of these financial statements.

31

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INTERLINK GLOBAL CORPORATION AND SUBSIDIARIES

 

Consolidated Statements of Operations

| For the years ended December 31, 2007 and 2006                                      | 2007   |   | 2006       |        |
|-------------------------------------------------------------------------------------|--------|--------|------------|--------|
|                                                                                |   |   |       |   |   |   |   |
| REVENUES                                                                            |   | $      | 9,897,738  |   | $ | 5,888,845 |   |
|                                                                                |   |   |       |   |   |   |   |
| COST OF REVENUES                                                                    |   |   | 8,089,197  |   |   | 4,305,900 |   |
|                                                                                |   |   |       |   |   |   |   |
| GROSS MARGIN                                                                        |   |   | 1,808,541  |   |   | 1,582,945 |   |
|                                                                                |   |        |            |        |  |  |  |
| OPERATING EXPENSES                                                                  |   |   |       |   |   |   |   |
|    Advertising                                                       |   |   | 10,412     |   |   | 50,491 |   |
|    Amortization of deferred loan costs                               |   |   | 219,764    |   |   | 431,211 |   |
|    Bad debts                                                         |   |   | 31,348     |   |   | 35,930 |   |
|    Consulting and technical services                                 |   |   | 330,032    |   |   | 299,307 |   |
|    Depreciation                                                      |   |   | 1,281,387  |   |   | 872,912 |   |
|    Professional fees                                                 |   |   | 415,178    |   |   | 231,331 |   |
|    Other expenses                                                    |   |   | 305,308    |   |   | 455,940 |   |
|    Rent and occupancy                                                |   |   | 455,558    |   |   | 393,847 |   |
|    Salaries and wages                                                |   |   | 1,387,786  |   |   | 1,550,473 |   |
|    Taxes and licenses                                                |   |   | 124,498    |   |   | 220,996 |   |
|    Telecommunications                                                |   |   | 45,972     |   |   | 458,530 |   |
|    Travel and entertainment                                          |   |   | 111,891    |   |   | 144,175 |   |
|        TOTAL GENERAL AND ADMINISTRATIVE EXPENSES |   |   | 4,719,134  |   |   | 5,145,143 |   |
| LOSS BEFORE OTHER INCOME EXPENSES                                                   |   |   | (2,910,593 | )      |   | (3,562,198 | ) |
|                                                                                |   |   |       |   |   |   |   |
| OTHER INCOME (EXPENSES)                                                             |   |   |       |   |   |   |   |
|    Bad debt recovery                                                 |   |   | 35,930     |   |   | — |   |
|    Forgiveness of debt                                               |   |   | 295,683    |   |   | — |   |
|    Impairment of goodwill                                            |   |   | —    |   |   | (581,358 | ) |
|    Interest expense                                                  |   |   | (685,080   | )      |   | (338,098 | ) |
|    Other                                                             |   |   | (4,031     | )      |   | (186,350 | ) |
|        TOTAL OTHER INCOME (EXPENSES)             |   |   | (357,498   | )      |   | (1,105,806 | ) |
|                                                                                |   |   |       |   |   |   |   |
| LOSS BEFORE INCOME TAX AND MINORITY INTEREST                                        |   |   | (3,268,091 | )      |   | (4,668,004 | ) |
|                                                                                |   |   |       |   |   |   |   |
| PROVISION FOR INCOME TAXES                                                          |   |   | —    |   |   | — |   |
|                                                                                |   |   |       |   |   |   |   |
| LOSS BEFORE MINORITY INTERST                                                        |   |   | (3,268,091 | )      |   | (4,668,004 | ) |
|                                                                                |   |   |       |   |   |   |   |
| MINORITY INTEREST                                                                   |   |   | 160,993    |   |   | 14,009 |   |
|                                                                                |   |   |       |   |   |   |   |
| NET LOSS                                                                            |   | $      | (3,107,098 | )      | $ | (4,653,995 | ) |
|                                                                                |   |   |       |   |   |   |   |
| Weighted average shares outstanding - basic and diluted                             |   |   | 41,849,460 |   |   | 36,806,198 |   |
|                                                                                |   |   |       |   |   |   |   |
| Net loss per share - basic and diluted                                              |   |   | (0.08      | )      |   | (0.13 | ) |

 

The accompanying notes are an integral part of these financial statements.

32

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INTERLINK GLOBAL CORPORATION AND SUBSIDIARIES

 

Consolidated Statements of Stockholders’ Equity – Deficiency of assets

 

Years ended December 31, 2007 and 2006

 

|                          |   |   | Common stockshares |       | Amount |   | Additional                    Paid-InCapital |   | Stock                    SubscriptionReceivable |      | Issuance                    of Common                    Stock forServices |   | Deficit  |   | Total  |          |
|-------------------------------|--------|--------|--------------------|------------|--------|--------|----------------------------------------------|--------|-------------------------------------------------|-----------|----------------------------------------------------------------------------|--------|----------|--------|--------|----------|
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Balance at December 31, 2005  |   |   |               | 33,393,922 |   | $      | 33,394                                       |   | $                                               | —   |                                                                       | $      | (304,869 | )      | $      | (179,000 | ) | $ | (71,464 | ) | $ | (521,939 | ) |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Issuance of common stock Cash |   |   |               | 7,419,000  |   |   | 7,419                                        |   |                                            | 1,066,688 |                                                                       |   | 304,869  |   |   | —  |   |   | — |   |   | 1,378,976 |   |
| Services and fees             |   |   |               | 235,000    |   |   | 235                                          |   |                                            | 234,765   |                                                                       |   | —  |   |   | 179,000  |   |   | — |   |   | 414,000 |   |
| Acquisition of CNH/NGTV       |   |   |               | 6,000,000  |   |   | 6,000                                        |   |                                            | 2,994,000 |                                                                       |   | —  |   |   | —  |   |   | — |   |   | 3,000,000 |   |
| Acquisition of MetroIP        |   |   |               | 551,000    |   |   | 551                                          |   |                                            | 550,665   |                                                                       |   | —  |   |   | —  |   |   | — |   |   | 551,216 |   |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Net loss                      |   |   |               | —    |   |   | —                                      |   |                                            | —   |                                                                       |   | —  |   |   | —  |   |   | (4,653,995 | ) |   | (4,653,995 | ) |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Balance at December 31, 2006  |   |   |               | 47,598,922 |   | $      | 47,599                                       |   | $                                               | 4,846,118 |                                                                       | $      | —  |   | $      | —  |   | $ | (4,725,459 | ) | $ | 168,258 |   |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Issuance of common stockCash  |   |   |               | 250,000    |   |   | 250                                          |   |                                            | 24,750    |                                                                       |   | —  |   |   | —  |   |   | — |   |   | 25,000 |   |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Net loss                      |   |   |               | —    |   |   | —                                      |   |                                            | —   |                                                                       |   | —  |   |   | —  |   |   | (3,107,098 | ) |   | (3,107,098 | ) |
|                          |   |   |               |       |   |   |                                         |   |                                            |      |                                                                       |   |     |   |   |     |   |   |   |   |   |   |   |
| Balance at December 31, 2007  |   |   |               | 47,848,922 |   | $      | 47,849                                       |   | $                                               | 4,870,868 |                                                                       | $      | —  |   | $      | —  |   | $ | (7,832,557 | ) | $ | (2,913,840 | ) |

 

The accompanying notes are an integral part of these financial statements.

33

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INTERLINK GLOBAL CORPORATION AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

 

| For the years ended December 31, 2007 and 2006                          |   | 2007   |   | 2006       |        |
|-------------------------------------------------------------------------|--------|--------|--------|------------|--------|
|                                                                    |   |   |   |       |   |   |   |   |
| Net Loss                                                                |   |   |   | (3,107,098 | )      |   | (4,653,995 | ) |
|                                                                    |   |   |   |       |   |   |   |   |
| Adjustments to reconcile net loss to cash used in operating activities: |   |   |   |       |   |   |   |   |
| Depreciation expense                                                    |   |   |   | 1,281,387  |   |   | 872,912 |   |
| Forgiveness of debt                                                     |   |   |   | (295,683   | )      |   | — |   |
| Bad debt                                                                |   |   |   | 31,348     |   |   | 61,635 |   |
| Bad debt recovery                                                       |   |   |   | (35,930    | )      |   | — |   |
| Impairment of assets                                                    |   |   |   | —    |   |   | 546,230 |   |
| Issuance of common stock for services                                   |   |   |   | —    |   |   | 235,000 |   |
| Amortization of deferred fees                                           |   |   |   | 219,764    |   |   | 431,211 |   |
| Changes in assets and liabilities:                                      |   |   |   |       |   |   |   |   |
| Decrease (increase) in accounts receivable                              |   |   |   | 135,685    |   |   | (159,368 | ) |
| Increase in other receivables                                           |   |   |   | (133       | )      |   | (1,934 | ) |
| Increase in accounts payable                                            |   |   |   | 758,775    |   |   | 1,141,144 |   |
| Increase (decrease) in accrued expenses                                 |   |   |   | 570,968    |   |   | (273,192 | ) |
|                                                                    |   |   |   |       |   |   |   |   |
| Net cash used in operating activities                                   |   |   |   | (440,917   | )      |   | (1,800,357 | ) |
|                                                                    |   |   |
| Cash Flows used in Investing Activities:                                |   |   |   |       |   |   |   |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Purchase of property and equipment                                      |   |   |   | (283,727   | )      |   | (296,744 | ) |
| Increase in noncurrent assets                                           |   |   |   | (568,427   | )      |   | (763,581 | ) |
| Payment for purchase of Venezuelan company, net                         |   |   |   | —    |   |   | (1,589,218 | ) |
|                                                                    |   |   |   |       |   |   |   |   |
| Net cash used in investing activties                                    |   |   |   | (852,154   | )      |   | (2,649,543 | ) |
|                                                                    |   |   |   |       |   |   |   |   |
| Cash Flow from Financing activities:                                    |   |   |   |       |   |   |   |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Proceeds from issuance of common stock                                  |   |   |   | 25,000     |   |   | 2,063,473 |   |
| Proceeds from stock subscription receivable                             |   |   |   | —    |   |   | 304,869 |   |
| Net proceeds from senior convertible notes                              |   |   |   | 1,475,000  |   |   | — |   |
| (Payment) Proceeds from note payable to officer                         |   |   |   | (44,139    | )      |   | 144,840 |   |
| Proceeds from due to stockholder                                        |   |   |   | —    |   |   | 90,000 |   |
| Net increase (decrease) in other notes payable                          |   |   |   | (51,873    | )      |   | 442,486 |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Net cash provided by or (used) in financing activities                  |   |   |   | 1,403,988  |   |   | 3,045,668 |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Net Increase (Decrease) in cash                                         |   |   |   | 110,917    |   |   | (1,404,232 | ) |
|                                                                    |   |   |   |       |   |   |   |   |
| Cash and equivalents, beginning                                         |   |   |   | 40,477     |   |   | 1,444,709 |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Cash and equivalents, ending                                            |   |   |   | 151,394    |   |   | 40,477 |   |
|                                                                    |   |   |
| Supplemental disclosures                                                |   |   |   |       |   |   |   |   |
| Cash paid for interest                                                  |   |   | $      | —    |   | $ | 13,302.00 |   |
| Cash paid for income taxes                                              |   |   | $      | —    |   | $ | — |   |
|                                                                    |   |   |
| Supplemental disclosures for non-cash items:                            |   |   |   |       |   |   |   |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Stock issued services                                                   |   |   | $      | —    |   | $ | 235,000 |   |
|                                                                    |   |   |   |       |   |   |   |   |
| Stock issued for settlement of debt                                     |   |   | $      | —    |   | $ | 115,100 |   |

 

The accompanying notes are an integral part of these financial statements.

34

----

**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

 

Note 1 Organization and Summary of Significant Accounting Policies

 

Nature of Operations 

The Company provides telecommunications applications utilizing hardware and software that enables its domestic and world-wide users to access the world-wide Internet as a transmission medium for telephone calls locally and throughout the world. The sale of Internet service is made possible using Voice over Internet Protocol (“VoIP”). Our markets are located in Latin America (namely            Venezuela and Colombia).

 

Organization 

In 1987, Hawaii Ventures, Inc. (“HVI”) was organized under the laws of the State of Utah as a public company for the purpose of acquiring a participation interest in any and all types of businesses and products. HVI’s stock offering was a “blind pool” offering.

 

In 1992, the Company acquired privately-held Infinity Worldwide Trading Corp., a New York company, and changed its name to Infinity Worldwide Inc. (“IWI”). The principal business of IWI became the purchase of discounted and surplus consumer products for resale in eastern Europe. This venture eventually failed and IWI was dormant since mid-1994 through mid-January 2005.

 

On January 12, 2005, IWI effectuated a merger with Interlink Global Corp., a Florida corporation, acquiring the issued and outstanding shares of IWI and liquidating it. Simultaneously, the state of incorporation was changed to Nevada and the entity’s name was changed to Interlink Global Corporation (the “Company”). The stock symbol was changed to ILKG.

 

Acquisitions

 

Communications Network Holdings (Venezuelan Company) 

Effective March 15, 2006, the Company signed a Share Purchase Agreement (the “Agreement”) with Nera ASA (“NERA”), a Norwegian company , to acquire all of the issued and outstanding common stock of Communication Networks Holdings, Ltd., an exempted company incorporated and existing under the laws of Bermuda (“CNH”). The acquisition included CNH’s ownership of            all of the issued and outstanding capital stock of Telecomunicaciones NGTV, S.A. (“NGTV”), a Venezuelan corporation engaged in the provision of telecommunication services.

 

Subject to the terms of the Agreement, the Company purchased CNH, free from any lien, charges and encumbrances, for a purchase price of $1.75 million. Under the terms of the Agreement, the Company has agreed to inject into NGTV, within 150 days of the closing date, $2 million in order to fund the investment and working capital needs of NGTV. Of this amount, $979,179 will be used to fund unpaid            salaries and severance obligations of NGTV. On August 3, 2006, the Company’s Board of Directors authorized the issuance of four million shares of restricted stock (fifty cents per share) for compliance with this provision of the Agreement.

 

As part of further negotiations of a debt reduction program and for further additional negotiations for the purchase of CNH, the Company utilized the services of Lane Bridge Overseas, Ltd., a British Virgin Islands company (“Lane”), an affiliate of Nera. In consideration of such services, the Company has granted Lane an exclusive and irrevocable purchase option through December 31, 2009,            for two million shares of the Company’s common stock, quoted on the OTC market in the United States, at a sale price of one cent per share. Based upon the per share price of fifty cents per share for the payment of the Cash Consideration as discussed in the preceding paragraph, these two million shares will be valued at fifty cents per share.

35

 

----

**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

 

MetroIP (Colombian Company) 

Effective November 3, 2006, the Company acquired a 66% equity interest in MetroIP Colombia S.A. (“MetroIP”), a telecommunications company headquartered in Barranquilla, Colombia.

 

On March 2007, the Company was placed on “hold trading” by the Security and Exchange Commission for 20 days due to “spam” mailing. On April 2007, the Company files an 15 C 211 application with FINRA for reinstatement to trade. As of December 31, 2007, the Company had not been reinstated and was listed on the “Gray Market”.

 

Principles of Consolidation 

The accompanying consolidated financial statements include the accounts of Interlink Global Corporation, and its owned subsidiaries, Communication Networks Holdings, Ltd. (“CNH”) and MetroIP. All material inter-company accounts and transactions between the Company and its Subsidiaries for the years presented have been eliminated in consolidation.

 

Note 2 Summaries of Significant Accounting Policies

 

Cash and Cash Equivalents 

The Company considers all highly liquid debt instruments with an original maturity of three months or less at the date of purchase to be cash equivalents.

 

Accounts receivable and allowance for doubtful accounts 

Trade and other receivable are reported at fair market value less any provisions for uncollectible accounts considered necessary. Accounts receivable primarily includes trade receivables from customers. The Company estimates doubtful accounts on an item-by-item basis and includes over-aged accounts as part of allowance for doubtful accounts, which are generally accounts that are 90 days or more            overdue. Bad debt expense for the year ended December 31, 2007 was $31,348 and December 31, 2006 was $35,930 respectively. In 2007, the Company recovered Bad debts of $35,930, which were expenses as Bad debts in previous years. The recovery is included in Other income on the Statements of operations.

 

Revenue Recognition 

Revenue for voice, data and other services to end-users are recognized in the month in which the service is provided. Amounts invoiced and collected in advance of services provided are recorded as deferred revenue. Revenues for carrier interconnection and access are recognized in the month in which the service is provided. Arbitrage revenue are recorded as net amount of income.

 

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 the reported amounts of revenues and expenses during the reporting period. Actual results could            differ from those estimates.

 

Concentrations of Business and Credit Risks 

The Company maintains cash balances in various banks the United States of America (“US”), Venezuela and Colombia. Balances maintained in a US banks, sometimes exceed the Federal Deposit Insurance Corporation (“FDIC”) limit of $100,000 per account. Balances maintained is Venezuelan and Colombian banks are not insured and amounted to $185,925 at December 31, 2007.

 

36

 

----

**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

 

Basic and Fully Diluted Net Loss Per Common Share 

The Company follows the provisions of Statement of Financial Accounting Standards No. 128 (SFAS 128), Earnings per Shares (“EPS”). SFAS No. 128 requires companies to present basic earnings (loss) per share (EPS) and diluted EPS, instead of primary and fully diluted EPS presentations that were formerly required. Basic EPS is computed by dividing net income or loss by the weighted average            number of common shares outstanding during each year. Certain debt instruments and related interest may be paid in cash or shares. The convertible shares have been added to the denominator in calculating diluted “EPS”. Refer to Note 10.

 

Impairment of Long-Lived Assets 

The Company follows SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets”. SFAS No. 144 requires that long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value            of the asset. Long-lived assets to be disposed of, if any, are reported at the lower of carrying amount or fair value less cost of sell.

 

Impairment of Goodwill 

Goodwill was recorded in the acquisition of MetroIP in the fourth quarter of 2006. Goodwill is tested for impairment annually in the last quarter of the year, unless management believes events have occurred or circumstances have changed that would require testing. Due to continued operating losses and cash flows being lower than expected, in December 2006, a goodwill impairment loss of $546,230 was            recognized. The fair value of goodwill was estimated using the expected present value of future cash flows.

 

Advertising 

The Company incurred advertising expenses in the amount of $ 10,412 in 2007 and $50,491 in 2006. The Company expenses all marketing and advertising expenses to statement of income and expense.

 

Reclassifications - Certain amounts in the prior year financial statements have been reclassified for comparative purposes to conform to the current year presentation.

 

Fair Value of Financial Instruments - Cash, accounts receivable, accounts payable, accrued expenses, current and non-current portion of debt, and other liabilities are carried at amounts which reasonably approximate their fair value due to the short-term nature of these amounts or due to variable rates of interest which are consistent with current market rates.

 

Recent Accounting Pronouncements - In July 2006, the FASB issued FASB Interpretation No. (“FIN”) 48, “Accounting for Uncertainty in Income Taxes”--an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized under SFAS No. 109, FIN 48 prescribes a recognition threshold and measurement attribute for financial statement            recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on various related matters such as derecognition, measurement and classification of income tax uncertainties, interest and penalties, and disclosure. FIN 48 also includes guidance concerning accounting for income tax uncertainties in interim periods and increases the level of required disclosures associated with any recorded income tax uncertainties. The differences            between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption are to be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. FIN 48 was effective beginning in fiscal year 2007 and did not have a material effect on the Company’s consolidated financial position, consolidated results of operations, or liquidity.

 

37

 

----

**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

 

Recent Accounting Pronouncements (cont) 

In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 108, “ Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements “ (“SAB 108”). SAB 108 provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should            be considered in quantifying a current year misstatement. The SEC staff believes that registrants should quantify errors 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. The provisions of SAB 108 were effective for the Company’s fiscal year ending December 30, 2007 and 2006. The adoption of SAB 108 did            not have a material impact on the Company’s consolidated financial statement.

 

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value while applying generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions based on            market data obtained from independent sources and (2) the reporting entity’s own assumptions developed based on unobservable inputs. The Company is still evaluating the impact of SFAS No. 157 on its financial statements, which is effective for fiscal year beginning after November 15, 2007. The Company does not expect its adoption to a material impact on its consolidated financial statements.

 

Note 2 Going Concern and Management’s Plans

 

As reflected in the accompanying consolidated financial statements, the Company incurred a consolidated net loss of approximately $3,100,000 for the year ended December 31, 2007, due principally to expenses incurred for general and administrative expenses. The Company has not generated significant recurring cash flows to sustain the operations. The ability of the Company to continue as a going concern            is dependent upon its ability to obtain financing and achieve profitable operations. The Company’s strategy is to acquire operating entities established in the telecommunication industry. The plan also includes raising equity capital through private stock offerings. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

Note 3 Property, plant and equipment

 

Property, plant and telecommunication equipment are presented at acquisition cost. Depreciation is computed using the straight line method based on the originally estimated useful life of assets. Repairs and maintenance are charged in the year in which incurred, while disbursements for major renewals or improvements are capitalized. When any property is retired or disposed, the cost and accumulated            depreciation is relieved from the accounts, and the resulting gain or loss is reflected in income statement. Depreciation expense for the years ended December 31, 2007 and 2006, was $1,281,387 and $872,912, respectively.

 

38

 

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**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

Note 4 Commitment and Contingencies

 

Leases 

Interlink accounts for occupancy leases as operating expenses. There are no capitalized leases. Rent and occupancy expenses for the year ended December 31, 2007 and 2006 was $455,558 and 393.847, respectively.

 

Minimum future lease payments as of December 31, 2007, were as follows:

 

| Year | 12/31/07 |
|------|----------|

 

| 2008 | 229,415 |
|------|---------|

| 2009 (annual renewals) | 84,000 |
|------------------------|--------|

 

| Total | 313,415 |
|-------|---------|

 

Future lease payments includes location in No. Miami, FL (USA), Caracas, Venezuela and Barranquilla, Colombia.

 

Employment arrangement 

The Company has an Employment Agreement with its Chief Executive Officer. In consideration of his services, the Company has agreed to pay a base salary of $52,000 plus certain bonuses and awards if the Company achieves defined goals. As of December 31, 2007 and 2006, none of these goals had been realized. The agreement is effective though December 31, 2008.

 

Legal Proceedings 

On August 18, 2006, the Company filed a lawsuit against a potential investor and the owner, agent and principal of in connection with an agreement to acquire 100% of the voting common stock in August 2005. After delivery of the purchase price of $62,000 and 1million shares of common stock (worth (approximately $1million) to the owner, the Company many material misrepresentations and omissions of facts            regarding the value of the investment . As a result, the Company sued for rescission of the purchase agreement and the transactions contemplated therein. The causes of action arose from alleged violations of Federal and Florida laws, common law rescission, fraud, constructive trust and unjust enrichment as a result of alleged fraudulent statements, acts and omissions by the owner. The amount in controversy was approximately $65,000, exclusive of interest and costs plus the shares            issued. The case was settled and the Company received all shares and all claims were satisfied in May 2007. The owner retained the purchase price of $62,000.00.

 

On May 3, 2006, Strategic Computer Solutions (“SCS”) filed an action against the Company alleging an outstanding unpaid balance for computer related equipment purportedly ordered by the Company. The Company believes the products were never received by an authorized employee of the Company. The legal action is still pending. As of December 31, 2007, the potential outcome was            unknown.

 

Until 2007, Interlink had a relationship with TBeck Capital, Aritex Consultants, Warren Street Investments, Victoria, et al (collectively referred to as TBeck). TBeck was engaged as the investment banker and funds raising company for Interlink Global Corp. and remuneration was in the form of stock issues and repayment of loans to the Company. The Company and TBeck terminated the arrangement and to            document the termination a settlement agreement was reached between TBeck and Interlink Global Corp., dated August 2, 2007. The agreement included mutual release of all claims.

 

39

 

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**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

Note 5 Accrued for labor indemnities

 

During 2006, the Company purchased two subsidiaries - NGTV/CNH and MetroIP. Foreign subsidiaries are required to record accrued unpaid labor fringe benefits (ie: vacation, sick days etc.) These accruals become due and payable upon termination or severance of the individual employees.

 

Note 6 Income Taxes

 

As of December 31, 2007, the Company had a net operating loss carry-forward of approximately $9.7 million. This loss may be carried forward to offset federal income taxes in various future years through the year 2027. During 2005, there was a significant ownership change in the Company as defined in Section 382 of the Internal Revenue Code. As a result of this change, the Company’s ability to            utilize net operating losses available before the ownership change is restricted to a percentage of the market value of the Company at the time of the ownership change. Therefore, substantial net operating loss carry-forward will, in all likelihood, be reduced or eliminated in future years due to the change in ownership.

 

A deferred tax asset has been provided to record the effect of the cumulative tax losses. Due to the uncertainty as to whether these losses will be realized, the Company has provided a valuation allowance equal to the amount of the deferred tax asset.

| The provision for income taxes are summarized as follows:            |   | 2007   |   | 2006    |   |
|----------------------------------------------------------------------|--------|--------|--------|---------|--------|
|                                                                 |   |   |   |    |   |   |   |   |
| Current tax, net of utilization of net operating loss carry-forward  |   |   |   |    |   |   |   |   |
| Federal                                                              |   |   |   | — |   |   | — |   |
| State                                                                |   |   |   | — |   |   | — |   |
|                                                                 |   |   |   |    |   |   |   |   |
| Total current tax                                                    |   |   |   | — |   |   | — |   |
|                                                                 |   |   |   |    |   |   |   |   |
| Deferred tax, net of utilization of net operating loss carry-forward |   |   |   |    |   |   |   |   |
| Federal                                                              |   |   |   | — |   |   | — |   |
| State                                                                |   |   |   | — |   |   | — |   |
|                                                                 |   |   |   |    |   |   |   |   |
| Total deferred tax                                                   |   |   |   | — |   |   | — |   |
|                                                                 |   |   |   |    |   |   |   |   |
| Total income taxes                                                   |   |   |   | — |   |   | — |   |

 

The company files consolidated income tax returns with its two subsidiaries. Deferred income taxes and benefits for 2007 and 2006 are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes. The principal temporary differences that give rise to the deferred tax asset (liability) and the effects (computed at 20% in both years) that the            changes in those temporary differences had on the provision for deferred tax expense as follows:

At the present time the Company has not filed its income tax return for December 31, 2006. Current year tax return is under extension.

 

40

 

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**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

| Items                            |   | 2007   |   | 2006       |        |
|----------------------------------|--------|--------|--------|------------|--------|
|                             |   |   |   |       |   |   |   |   |
| Deferred tax assets:             |   |   |   |       |   |   |   |   |
| Allowance for bad debts          |   |   | $      | 114,097    |   | $ | 114,097 |   |
| Net operating loss carry-forward |   |   |   | 1,802,523  |   |   | 1,120,000 |   |
|                             |   |   |   |       |   |   |   |   |
| Total deferred tax asset         |   |   |   | 1,916,620  |   |   | 1,234,097 |   |
|                             |   |   |   |       |   |   |   |   |
| Deferred tax liability:          |   |   |   |       |   |   |   |   |
| Depreciation                     |   |   |   | (13,350    | )      |   | (8,769 | ) |
|                             |   |   |   |       |   |   |   |   |
| Total deferred tax liability     |   |   |   | (13,350    | )      |   | (8,769 | ) |
|                             |   |   |   |       |   |   |   |   |
| Less: Valuation allowance        |   |   |   | (1,903,270 | )      |   | (1,225,328 | ) |
|                             |   |   |   |       |   |   |   |   |
| Net deferred tax asset           |   |   | $      | —    |   | $ | — |   |

 

Note 7 Senior Convertible Notes

 

On November 29, 2005, the Company issued a Series A Senior Convertible Note for $2 million, resulting in net proceeds of $1,767,000; the notes bear interest at 10% and mature on May 29, 2008. Closing costs of $233,000 are being amortized through that date. One-fourteenth (1/14th) of the principal and all accrued but unpaid interest is due monthly commencing in January 2007; the principal and accrued            interest may be paid in registered shares of the Company’s common stock at a conversion price equal to 85% of the average closing bid price for the ten trading days preceding the payment due date.

 

On February 28, 2006, the Company issued two Series B Senior Convertible Notes for $1,297,550, resulting in net proceeds of $1,142,635. The notes bear interest at ten percent and matured in August 28, 2007. Closing costs of $154,915 are being amortized through that date, commencing in March 2006. One-fourteenth (1/14th) of the principal and all accrued but unpaid interest is due monthly, commencing in            January 2007; the principal and accrued interest may be paid in registered shares of the Company’s common stock at a conversion price equal to 85% of the average closing bid price for the ten trading days preceding the payment due date. At present, expired Convertible Notes are under request for extension of time to August 28, 2008.

 

In connection with these agreements, the Company issued warrants to purchase an aggregate of 12,064,044 shares of common stock: (i) 10,644,744 to the note holders (at an exercise price of $1.05 per share) and (ii) 1,419,300 to the placement agents (at varying exercise prices, ranging from $.75 to $3.25 per share). The warrants to the note holders expire at varying dates through February            2016.

 

Registration of Restricted Stock 

In accordance with the abovementioned Series A and Series B Senior Convertible Notes, the Company was obligated to file a registration statement within forty-five days of the closing dates. In as much that a registration statement was not filed within that period, the Company is obligated to pay liquidated damages of 1.5 percent per month based upon the principal balance (not to exceed 9%).            Accordingly, the Company has issued 240,000 warrants with an exercise price of $.75 per share (for the Series A Notes) and 155,706 warrants with an exercise price of $.75 per share for the Series B Notes.

 

41

 

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**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

Note 8 Stock issuance

 

Shares Issued per Merger 

In February 2005, pursuant to the merger agreement (per Note 1 above), the Company effected a one share for three share reverse stock split and issued a net total of 13,149,680 restricted shares of common stock, recorded at par value. In March 2005, the Company’s transfer agent placed a total of 10,889,859 shares in reserve as security for shares lost by shareholders in lieu of a bond. These            shares are considered outstanding, but unissued. As of March 31, 2006, 50,000 shares were issued and removed from the reserve. These share transactions have been recorded at par value.

 

Shares Issued for Services 

During the three months ended March 31, 2006, the Company issued 235,000 restricted shares of common stock for various technical and consulting services, including investor relations, corporate restructuring, private placements and financing projects. The shares were valued at $1 per share; expense of $235,000 was recognized for the period.

 

Shares Issued for Current and Future Consulting Services 

In May and June 2005, the Company issued 325,000 restricted shares of common stock pursuant to consulting agreements for investor relations, research reporting and other services to be rendered. The transactions were recorded at $325,000. The Company recorded this amount as deferred consulting fees and is amortizing the costs over the terms from August 2006 to June 2007.

 

Shares Issued for Cash 

In April 2006, the Company issued 555,000 shares of restricted common stock for $1 per share. No new shares have been issued for cash.

 

Issuance of Convertible Debentures 

In May and June 2006, the Company issued 11% convertible debentures aggregating $48,500. The debentures are due December 31, 2009 and provide for a conversion price of $1.25 per share.

 

Convertible debentures for Common stock 

Series A, B and C debentures provides for conversion to Common stock. If converted, the Company would need to issue additional stock, as follows:

 

| Items | Number of Common shares |
|-------|-------------------------|

| Series A | 4,100,130 |
|----------|-----------|

| Series B | 3,438,743 |
|----------|-----------|

| Series C | 1,474,605 |
|----------|-----------|

 

| Total | 9,013,478 |
|-------|-----------|

 

Convertible debentures A and B are presently in default. The Company is under negotiations with debenture holders.

 

Additional Financing Arrangements 

In July 2006, the Company signed a Placement Agent Agreement for the proposed private placement of up to $5 million of the Company’s common stock. As compensation for its services, the placement agent is to be paid 10% percent of such financing. In addition, in August 2006, the Company signed a letter of intent for additional financing of up to $1 million in two years, 7% convertible notes as            compensation for its services.

 

42

 

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**INTERLINK GLOBAL CORPORATION**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

December 31, 2007 AND 2006

Note 9 Related party transactions.

 

Advances from officers amounted to $134,558, as of December 31, 2007 and $259,883 at 2006, respectively. The advances are due within one year of advance date and are non-interest bearing. Due to shareholders amounted to $171,186, as of December 31, 2007 and $90,000 at 2006. Due to shareholders amounts are due within one year of dated received and are non-interest bearing.

 

Note 10 Subsequent Events

 

Issuance of Convertible Debentures 

On March 31, 2007, the Company issued Series D Senior Convertible Notes for $1,500,000, resulting in net proceeds of $1,415,300, the notes bear interest at twelve percent and mature in March 2011. Closing costs of $84,700 are being amortized through that date, commencing in April 2007.

 

The Company is presently under negotiations with Debenture holders to exercised conversion privileges for debentures to Common stock. Negotiations are on going and will be completed by second quarter of 2008.

 

The Company is presently working with Corporate counsel to increase number of authorized shares. Request is in process and will be completed by second quarter of 2008.

 

The Company is waiting final resolution of `FINRA” examination. Final approval is expected during second quarter of 2008.

 

The Company terminated major agreement with vendor, relating to traffic and international destinations. At present the Company and vendor are working details of settlement, final resolution will be during second quarter 2008.

 

The Company is not planning any major maintenance activities on any of its affiliates.

 

During 2007 and 2006, there were certain Press Releases that were reported and did not fully materialize. Effect of these Press Releases were not material to presentation of financial statements for the Company.

 

Effective October 2007, Mr. Severino Rivano, President of CNH/NGTV, our Venezuela affiliate, is no longer employed.

 

NGTV (our Venezuela affiliate) entered into payment agreement with former employees. The agreement was filed on February 11, 2008, and it stipulates 36 quarterly payment including interest of 10% per year.

 

43