Form 10-KSB/A
                                 -------------
                               (AMENDMENT NO. 1)

Special  Financial  Report  Pursuant  to Section  13 or 15(d) of the  Securities
Exchange Act of 1934 For the Fiscal Year Ended December 31, 2000

The Issuer's Registration Statement on Form SB-2 (Registration Number 333-50948)
became  effective on February 14, 2001 and did not contain  certified  financial
statements  for the fiscal year ended  December 31, 2001, the Issuer's last full
fiscal year. This special  financial  report is filed pursuant to Rule 15d-2 and
contains only financial statements for the fiscal year ended December 31, 2000.

                        Commission File Number 333-8234
                        -------------------------------


                            Sunshine PCS Corporation
                            ------------------------
                 (Name of small business issuer in its charter)

Delaware                                                      13-4141279
--------                                                      ----------
(State or other jurisdiction                              (I.R.S.  Employer
of  incorporation  or  organization)                     Identification  No.)

421 Hudson  Street,  New York,  New York                            10014
----------  -------  ---------  --------                            -----
(Address of principal executive offices)                          (Zip Code)

 Issuer's telephone number: (212) 675-1920
                            --------------

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

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject  to such  filing  requirements  for the  past 90  days.  Yes ____ No X__
(Issuer only became subject to Section 15(d) filing requirements on February 14,
2001, pursuant to the filing of a Registration  Statement on Form SB-2 which was
declared effective on such date (Commission File No. 333-8234))

Check if there is no disclosure of delinquent  filers in response 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. ( X )

Issuer's revenues for its most recent fiscal year were $0.

The aggregate market value of the voting common equity held by non-affiliates of
the Issuer was approximately $5.9 million as of May 1, 2001.

As of Juanury 21, 2001,  there were  3,057,060  shares of Class A common  equity
outstanding.
<PAGE>

This  Amendment  No. 1 on Form  10KSB/A is being filed to restate the  Company's
Financial  Statements  as of  December  31,  1999 and 2000 and each of the three
years in the period  ended  December  31,  2000 and for the period from July 27,
1995  (inception) to December 31, 2000, to properly  reflect the following:  (1)
the  Management  Services  Agreement  entered into as of May 1, 2001 between the
company  and  Graylink  Wireless,  Inc.,  (2) the Stock  Options  granted to the
Company's  Chief  Executive  Officer and Chief  Operating  Officer,  and (3) the
agreement  between the Company and Lynch Interactive  Corporation  regarding the
issuance of shares to the holder of Lynch Interactive's convertible note and the
holders of the Company's Class B common stock.

The effects of this  restatement were to decrease the basic and diluted loss per
share by $0.43 for the year ended  December  31,  1999 and by $0.18 for the year
ended  December 31, 2000. In addition,  under the column "Pro Forma  (Unaudited)
December  31,  2000,"  Additional  paid-in capital was  increased by $94,306 and
Deficit accumulated during the development stage was increased by $94,306.  From
a  disclosure  perspective,  Footnote 5,  "Subsequent  Event/Pro  Forma Basis of
Accounting (Unaudited)" was amended and Footnote 6, "Matters Occuring Subsequent
to the Date of the Auditors Reports (Unaudited)"was added.

This annual report on Form 10-KSB/A for the fiscal year ended  December 31, 2000
is being filed pursuant to Rule 15d-2 under the Securities Exchange Act of 1934,
as amended, and contains only certified financial statements as required by Rule
15d-2. Rule 15d-2 provides  generally that, if a registrant files a registration
statement  under the Securities Act of 1933, as amended,  which does not contain
certified  financial  statements for the registrant's  last full fiscal year (or
the life of the registrant if less than a full fiscal year), then the registrant
shall, within 90 days of the effective date of the registration statement,  file
a special report furnishing  certified financial statements for such last fiscal
year or other period,  as the case may be, meeting the  requirements of the form
appropriate  for annual reports of the registrant.  Rule 15d-2 further  provides
that such  special  financial  report is to be filed  under  cover of the facing
sheet  apropriate  for  the  annual  report  of  the  registrant.  Sunshine  PCS
Corporation's  Registration  on Form  SB-2  referenced  above  did  not  contain
certified   financial   statements   for  the  year  ended  December  31,  2000,
Registrant's  last full  fiscal  year.  Therefore,  as  required  by Rule 15d-2,
certified  financial  statements  for the year ended December 31, 2000 are filed
herewith under cover of the facing page of an Annual Report on Form 10-KSB/A.


Item 7. Financial Statements.


Partners
Fortunet Communications, L.P.

We have audited the accompanying balance sheets of Fortunet Communications, L.P.
(the  "Partnership") a development  stage enterprise and predecessor to Sunshine
PCS Corporation, as of December 31, 1999 and 2000, and the related statements of
operations,  changes in partners'  equity/(deficit),  and cash flows for each of
the three years in the period ended  December 31, 2000,  and for the period from
July 27, 1995 (inception) to December 31, 2000.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. 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 Fortunet  Communications,  L.P.
at December 31, 1999 and 2000,  and the results of its  operations  and its cash
flows for each of the three years in the period ended December 31, 2000, and the
period from July 27, 1995  (inception) to December 31, 2000, in conformity  with
accounting principles generally accepted in the United States.

The  accompanying  financial  statements  have been prepared  assuming  Fortunet
Communications,  L.P. will continue as a going concern.  As more fully described
in Note 1, the  Partnership  has incurred  losses since  inception,  has not yet
adopted a business  plan,  determined  how to  finance  its  operations  and may
forfeit its licenses or be subject to the  imposition  of fines and sanctions if
it  does  not  meet  certain  build-out  requirements.  These  conditions  raise
substantial  doubt  about  the  Partnership's  ability  to  continue  as a going
concern.  The financial statements do not include any adjustments to reflect the
possible future effects on the  recoverability  and  classification of assets or
the amounts and  classification  of liabilities that may result from the outcome
of this uncertainty.

                                                /s/ Ernst & Young LLP
Stamford, Connecticut
April 30, 2001
<PAGE>
<TABLE>

                          Fortunet Communications, L.P.
                       (ADevelopment Stage Enterprise and
                    Predecessor to Sunshine PCS Corporation)
                                 Balance Sheets
<CAPTION>
                                                                                                 Pro Forma
                                                                                                (Unaudited)
                                                                      December 31,               December 31,
                                                                                                    2000
                                                                  1999            2000            (Note 5)
                                                                  ----            ----            --------
Assets                                                                                           (Restated)
<S>                                                            <C>             <C>             <C>
Cash .......................................................   $       --      $       --      $    250,000
PCS Licenses ...............................................      2,686,012       2,686,012       2,686,012
                                                               ------------    ------------    ------------
Total Assets ...............................................   $  2,686,012    $  2,686,012    $  2,936,012
                                                               ============    ============    ============
Liabilities and partners'/stockholders' equity/(deficit)

Long-term debt:

  Loan from Limited Partner ................................   $ 69,760,140    $ 83,459,785    $       --
  Subordinated Notes .......................................           --              --        16,131,117

Preferred Stock, $1.00 par value Authorized shares - 30,000            --              --           250,000

Partners'/stockholders' equity/(deficit)

Common Stock, $0.0001 par value
  Class A: Authorized shares - 20,000,000
  Class B: Authorized shares - 9,000,000
Additional paid-in capital .................................          --               --        68,121,577
Deficit accumulated during the development stage ...........          --               --       (81,566,682)
General partner's deficit accumulated during the development
stage ......................................................    (12,618,925)    (12,755,921)           --
Limited partner's deficit accumulated during the development
stage ......................................................    (54,455,203)    (68,017,852)           --
                                                               ------------    ------------    ------------
Total partners'/stockholders' deficit
  accumulated during the development stage .................    (67,074,128)    (80,773,773)    (13,445,105)
                                                               ------------    ------------    ------------
Total liabilities and
  partners'/stockholders' equity/(deficit) .................   $  2,686,012    $  2,686,012    $  2,936,012
                                                               ============    ============    ============
See accompanying notes
</TABLE>

<PAGE>
<TABLE>

                          Fortunet Communications, L.P.

                       (A Development Stage Enterprise and
                    Predecessor to Sunshine PCS Corporation)

                            Statements of Operations

<CAPTION>
                                                                                  July 27, 1995
                                         Years Ended December 31,                 (inception) to
                                                                                   December 31,
                                     1998             1999            2000             2000
                                     ----             ----            ----             ----
Interest expense (including
<S>                               <C>             <C>             <C>             <C>
commitment fees) ..............   $(18,679,726)   $(13,001,850)   $(13,699,645)   $(75,599,277)
Forgiveness of interest expense     19,159,890            --              --        19,159,890
Impairment of PCS Licenses ....           --       (18,454,112)           --       (25,032,989)
                                  ------------    ------------    ------------    ------------

Net profit (loss) .............   $    480,164    $(31,455,962)   $(13,699,645)   $(81,472,376)
                                  ============    ============    ============    ============

Net profit (loss) allocated to    $  6,472,834    $ (9,375,529)   $   (136,996)   $(13,105,920)
general partner ...............     ==========    ============      ==========    =============

Net loss allocated to limited .   $ (5,992,670)   $(22,080,433)   $(13,562,649)   $(68,366,456)
partner .......................   ============    =============   =============   =============

Pro-forma basic and diluted
earnings (loss) per share
(Restated) ....................   $        .08    $      (5.13)   $      (2.24)           --
                                  ============    ============    ============
Weighted average shares used in
computation (Restated).........      6,126,373       6,126,373       6,126,373            --
                                  ============    ============    ============
See accompanying notes
</TABLE>

<PAGE>
<TABLE>


                          Fortunet Communications, L.P.

                       (A Development Stage Enterprise and
                    Predecessor to Sunshine PCS Corporation)

               Statement of Changes in Partners' Equity/(Deficit)

     For the period from July 27, 1995 (inception) through December 31, 2000
<CAPTION>

                              General Partners  Limited Partners Total Partners
                              equity/(deficit)  equity/(deficit) equity/(deficit)
                              ---------------- ----------------  ----------------
<S>                             <C>             <C>             <C>
Capital contributions .......   $    350,000    $    348,603    $    698,603
  Net loss ..................         (4,605)       (455,894)       (460,499)
                                ------------    ------------    ------------
Balance at December 31, 1995         345,395        (107,291)        238,104
  Net loss ..................       (850,414)     (6,474,655)     (7,325,069)
                                ------------    ------------    ------------
Balance at December 31, 1996        (505,019)     (6,581,946)     (7,086,965)
  Net loss ..................     (9,211,211)    (19,800,154)    (29,011,365)
                                ------------    ------------    ------------
Balance at December 31, 1997      (9,716,230)    (26,382,100)    (36,098,330)
  Net profit (loss) .........      6,472,834      (5,992,670)        480,164
                                ------------    ------------    ------------
Balance at December 31, 1998      (3,243,396)    (32,374,770)    (35,618,166)
  Net Loss ..................     (9,375,529)    (22,080,433)    (31,455,962)
                                ------------    ------------    ------------
 Balance at December 31, 1999    (12,618,925)    (54,455,203)    (67,074,128)
  Net loss ..................       (136,996)    (13,562,649)    (13,699,645)
                                ------------    ------------    ------------
Balance at December 31, 2000    ($12,755,921)   ($68,017,852)   ($80,773,773)
                                ============    ============    ============

See accompanying notes.
</TABLE>

<PAGE>
<TABLE>

                          Fortunet Communications, L.P.

                       (A Development Stage Enterprise and
                    Predecessor to Sunshine PCS Corporation)

                            Statements of Cash Flows
<CAPTION>
                                                                                            July 27,1998
                                                                                            (inception) to
                                                      Year Ended December 31                 December 31,
                                                 1998          1999           2000              2000
                                                 ----          ----           ----              ----

Operating activities
<S>                                         <C>             <C>             <C>             <C>
Net profit (loss) .......................   $    480,164    $(31,455,962)   $(13,699,645)   $(81,472,376)
Net change in accrued interest and ......      3,437,852      13,001,850      13,699,645      58,774,587
commitment fees
Impairment of PCS licenses ..............           --        18,454,112            --        25,032,989
                                            ------------    ------------    ------------    ------------
Net cash provided by operating activities      3,918,016            --              --         2,335,200
                                            ------------    ------------    ------------    ------------

Investing activities ....................           --
Deposits with the FCC ...................           --              --              --        (4,200,000)
Purchase of PCS licenses ................       (164,798)           --              --        (4,698,398)
Other ...................................        (61,300)           (813)           --          (215,710)
                                            ------------    ------------    ------------    ------------
Net cash used in investing activities ...       (226,098)           (813)           --        (9,114,108)
                                            ------------    ------------    ------------    ------------

Financing activities
Net proceeds from (repayments of)
Limited Partner loans ...................     (3,691,918)            813            --         6,080,305
Capital contributions ...................           --              --              --           698,603
                                            ------------    ------------    ------------    ------------
 Net cash (used in) provided by financing
  activities ............................     (3,691,918)            813            --         6,778,908
                                            ------------    ------------    ------------    ------------
Net change in cash ......................           --              --              --              --
Cash at beginning of period .............           --              --              --              --
                                            ------------    ------------    ------------    ------------

Cash at end of period ...................   $       --      $       --      $       --      $       --
                                            ============    ============    ============    ============
</TABLE>
<PAGE>

Fortunet Communications, L.P. (A Development Stage Enterprise and Predecessor to
Sunshine PCS Corporation)  Notes to Financial  Statements  December 31, 1999 and
2000

1. Accounting Policies

Restatement

This  Amendment  No. 1 on Form  10KSB/A is being filed to restate the  Company's
Financial  Statements  as of  December  31,  1999 and 2000 and each of the three
years in the period  ended  December  31,  2000 and for the period from July 27,
1995  (inception) to December 31, 2000, to properly  reflect the following:  (1)
the  Management  Services  Agreement  entered into as of May 1, 2001 between the
company  and  Graylink  Wireless,  Inc.,  (2) the Stock  Options  granted to the
Company's  Chief  Executive  Officer and Chief  Operating  Officer,  and (3) the
agreement  between the Company and Lynch Interactive  Corporation  regarding the
issuance of shares to the holder of Lynch Interactive's convertible note and the
holders of the Company's Class B common stock.

The effects of this  restatement were to decrease the basic and diluted loss per
share by $0.43 for the year ended  December  31,  1999 and by $0.18 for the year
ended  December 31, 2000. In addition,  under the column "Pro Forma  (Unaudited)
December  31,  2000,"  Additional  paid-in capital was  increased by $94,306 and
Deficit accumulated during the development stage was increased by $94,306.  From
a  disclosure  perspective,  Footnote 5,  "Subsequent  Event/Pro  Forma Basis of
Accounting (Unaudited)" was amended and Footnote 6, "Matters Occuring Subsequent
to the Date of the Auditors Reports (Unaudited)" was added.

Description of Business

Fortunet Communications,  L.P. ("Fortunet") was formed on April 18, 1997 to hold
personal  communications services ("PCS") licenses that had been acquired in the
Federal  Communications  Commission's  ("FCC")  C-Block  auction.  At that date,
Fortunet  succeeded to the assets and assumed the liabilities (the  "Transfers")
of five partnerships ("Partnerships") that were the high bidders for licenses in
the auction.  The Partnerships  that transferred their assets and liabilities to
Fortunet, were Aer Force Communications,  L.P. ("Aer Force"),  Fortunet Wireless
Communications,  L.P., High Country  Communications,  L.P., New England Wireless
Communications,  L.P. and Southeast Wireless  Communications  L.P., all of which
were formed on July 27, 1995. The Partnerships  received a proportional interest
in Fortunet based upon the relative  market values of the assets and liabilities
transferred.

Sunshine PCS Corporation  ("Sunshine")  was  incorporated on July 13, 2000, with
capital  of  $1.00,  and on  February  14,  2001  succeeded  to the  rights  and
obligations of Fortunet (See Note 5).

PCS is a  second-generation  digital wireless service utilizing voice,  video or
data devices that allow people to communicate at anytime and virtually anywhere.
The FCC  auctioned  off PCS  licenses,  a total of 120 MHz of spectrum,  falling
within six separate frequency blocks labeled A through F. Frequency Blocks C and
F were designated by the FCC as  "entrepreneurial  blocks".  Certain  qualifying
small businesses including the Partnerships were afforded bidding credits in the
auctions  as  well  as  government  financing  of  the  licenses  acquired.  The
Partnerships won 31 licenses in 1996 to provide personal communications services
over 30 MHz of spectrum  to a  population  of  approximately  7.0 million  (1990
Census Data).

Fortunet Wireless  Communications  Corporation ("Fortunet Wireless"),  an entity
controlled  by Victoria  Kane,  a private  investor,  is the General  Partner of
Fortunet with a 50.1% equity interest.  Subsequent to the transfers, Victoria F.
Kane  owned 60% of the stock of  Fortunet  Wireless.  On May 4, 2000,  Ms.  Kane
purchased  the remaining  40% of Fortunet  Wireless for  $600,000,  and gave the
selling  stockholders  the right to repurchase the stock so acquired through May
4, 2008 for 120% of her purchase price.  Lynch PCS Corporation A, a wholly-owned
subsidiary of Lynch PCS Corporation,  which in turn is a wholly-owned subsidiary
of Lynch  Interactive  Corporation  ("Lynch"),  a publicly held company,  is the
Limited Partner of Fortunet with a 49.9% equity interest.  Lynch PCS Corporation
A has agreements to provide a total of $41.8 million of funding to Fortunet,  of
which a total of $21 million was funded  through  December  31,  2000.  Basis of
Presentation

The Transfers from the partnerships, with the exception of the transfer from Aer
Force, were accounted for as business combinations at fair value resulting in an
increase in the carrying value of the PCS licenses of $9.9 million. The transfer
from Aer Force was accounted  for in a manner  similar to a pooling of interests
at  historical  cost since  Fortunet  and Aer Force are  entities  under  common
control.  Accordingly, the accompanying financial statements include the results
of Aer Force from inception,  July 27, 1995, and the remaining four partnerships
from the date of the transfer, April 18, 1997.

The financial  statements  are prepared in conformity  with  generally  accepted
accounting principles applicable to a development stage enterprise.

Fortunet's  financial  statements  have been  prepared on a going  concern basis
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business and does not include any adjustments to reflect
the possible future effects on the  recoverability  and classification of assets
and the  amounts and  classifications  of  liabilities  that may result from the
possible inability of Fortunet to continue as a going concern.
<PAGE>

Fortunet has not yet adopted a business  plan or  determined  how to finance its
operations.  Therefore,  Fortunet has not yet determined  whether to develop its
PCS licenses on its own,  enter into a joint venture with its licenses,  or sell
some or all of its licenses,  all of which the Company  believes are alternative
strategies.

Under FCC  regulations,  Fortunet is required  to  construct a PCS network  that
provides adequate service to at least one-quarter of the population in the areas
covered by the licenses by September 17, 2001, or make a showing of  substantial
service in the areas  covered  by the  licenses  by that date.  Failure to do so
could result in the  forfeiture  of the licenses or the  imposition of fines and
sanctions. Unless Fortunet sells the licenses or enters into a joint venture, it
must raise  significant  funds to meet this  requirement.  Fortunet has incurred
losses  since  inception  and,  as noted,  will need to obtain  capital  for the
initial  build-out of  facilities.  There can be no assurance  that Fortunet can
raise   sufficient   capital  to  finance  the  construction  of  its  networks.
Accordingly,  as a result of the items  discussed  above,  there is  substantial
doubt about Fortunet's ability to continue as a going concern.

Thus far, Fortunet had not evaluated its strategic  alternatives due to a number
of  factors.  Throughout  Fortunet's  history  and  that  of  its  predecessors,
servicing the debt entered into to acquire its licenses has been very difficult.
In 1996, these difficulties  forced Fortunet to return 28 of its 31 licenses and
15  megahertz  of  spectrum of its three 30  megahertz  licenses.  In  addition,
Fortunet's  partners  have not reached a consensus  on exactly  which  course to
pursue.

More recently,  Fortunet has been restricted from exploring the possibility of a
sale or joint  venture of its licenses due to FCC  anti-collusion  rules.  Under
these rules, both participants in ongoing FCC PCS reauctions,  and their related
parties,  are  prohibited  from  negotiating  with  other  participants  for the
acquisition of additional PCS licenses. Because related parties of Fortunet were
participating  in such a reauction,  Fortunet was restricted  from exploring the
idea of selling its  licenses or entering  into a joint  venture  with any other
auction  participants  from November 6, 2000 until  February 12, 2001, and those
other  participants  are  the  entities  most  likely  to be  interested  in its
licenses.

We have  been  advised  that it is  highly  uncertain  that the FCC will  extend
Fortunet's  deadline for its build out  requirements.  If the FCC were to revoke
Fortunet's  licenses  for failure to meet its build out  requirements,  it would
effectively  put  Fortunet  out of business  because the  licenses  are its only
significant  assets.  If the FCC were  merely to impose  fines on  Fortunet  for
failing to meet its build out requirements,  the  ramifications  would depend on
the amount of the sanctions in relation to the value of its  licenses.  If these
sanctions were substantial, it might force Fortunet to seek protection under the
bankruptcy laws or go out of business.

Administrative Services

Fortunet  has no  employees.  The  Limited  Partner  provided  Fortunet  and its
predecessors,  at their request,  with certain  services in connection  with the
Partnerships'  bidding for PCS licenses in the FCC auctions in 1996.  Aside from
that  matter,  neither the General  Partner  nor the  Limited  Partner  provided
Fortunet  with  a  substantial  amount  of  services.  Neither  partner  charged
Fortunet, for the services provided, as such amounts are not significant.

Use of Estimates

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

Capitalized Costs/PCS Licenses Amortization

Certain  direct costs of acquiring the PCS licenses  (such as legal,  filing and
other regulatory fees) have been capitalized and included in PCS licenses in the
accompanying balance sheets,  amounting to $0.1 million at December 31, 1999 and
2000. These costs, and the costs of the PCS licenses, will be amortized over the
remaining life of the respective PCS licenses when, and if, Fortunet,  commences
operations.

Income Taxes

The results of operations of the  Partnerships  and Fortunet are included in the
taxable  income or loss of the  individual  partners  and,  accordingly,  no tax
provision has been recorded (See Note 5).


<PAGE>

2. PCS Licenses

In the C-Block  auction,  which  ended in May 1996,  the  combined  Partnerships
acquired 31 licenses at net cost, after bidding credits, of $216 million.  These
licenses were awarded in September  1996.  The FCC provided 90% of the financing
of the cost of these  licenses at an interest rate of 7% per annum with interest
due quarterly for years one through six and principal  amortization and interest
due quarterly in years seven through ten.

Events during and subsequent to the auction,  as well as other externally driven
technological  and  market  forces,  made  financing  the  development  of these
licenses  through  the  capital  markets  much more  difficult  than  originally
anticipated.  In 1997,  Fortunet,  as well, as many of the other license holders
from this auction,  petitioned the FCC for relief in order to afford these small
businesses the opportunity to more realistically restructure and build-out their
systems.  The response from the FCC,  which was announced on September 26, 1997,
afforded  license  holders  a  choice  of four  options,  one of  which  was the
resumption of current debt payments,  which had been  suspended  earlier in 1997
for all such  license  holders.  The  ramifications  of choosing the other three
courses of action would result in Fortunet  ultimately  forfeiting  30%, 50%, or
100%  of  the  down  payments  on  these  licenses.  Accordingly,  during  1997,
subsequent  to the  Transfers,  Fortunet  provided for a 30% reserve on the down
payments (10% of net cost) as this represented Fortunet's estimate, at the time,
of the impairment of this investment given the then available  alternatives.  On
March 24,  1998,  the FCC  modified the four options and provided a July 8, 1998
deadline for a decision.

On June 8, 1998,  Fortunet elected to apply its eligible credits relating to its
original  down  payment  to the  purchase  of three  licenses  for 15 MHz of PCS
spectrum in Tallahassee,  Panama City and Ocala, Florida.  Fortunet returned all
the  remaining  licenses and forfeited 30% of its original down payment on these
licenses in full  satisfaction  of the  government  debt and  forgiveness of all
accrued interest.  Accordingly,  Fortunet is currently the licensee of 15 MHz of
spectrum  in  the  three  Florida  markets  covering  a  population  ("POP")  of
approximately  785,000 at a net cost at auction of $20.09 per POP, based on 1990
census data.

On April 15, 1999,  the FCC  completed a reauction  of all the C-Block  licenses
that were returned to it subsequent  to original  auction,  including the 15 MHz
licenses  that  Fortunet  returned  on June 8,  1998.  In  that  reauction,  the
successful  bidders paid a total of $2.7 million for those three 15 MHz licenses
returned by Fortunet,  as compared to the $21.2  million  carrying  value of the
licenses  at that  time.  Accordingly,  Fortunet  recorded  a write  down of its
investment,  including  capitalized costs, to reflect the amount bid for similar
licenses in the reauction.

3. Partnership Agreement

Each of Fortunet's predecessor Partnerships, including Aer Force, were formed in
1995 to bid for PCS licenses in the FCC's "C-Block" auction. The general partner
of Aer Force  contributed  a total of $350,000  to Aer Force for a 50.1%  equity
interest in the partnership and the limited partner contributed  $348,603 to Aer
Force for a 49.9% equity interest.

Under the terms of all of the predecessor Partnership Agreements,  including Aer
Force,  and  subsequently  Fortunet,  all items of  deduction  with  respect  to
interest  expense and commitment  fees incurred in connection with the loan from
the Limited  Partner  are  allocated  99% to the  Limited  Partner and 1% to the
General  Partner.  All other deductions are allocated to the Limited and General
Partner on the basis of 49.9% and 50.1%, respectively. All profits are allocated
99% to the Limited  Partner and 1% to the General  Partner  until the  aggregate
amount of all  profits  allocated  to the Limited  Partner  and General  Partner
equals the items of deduction  with respect to interest  expense and  commitment
fees,  except for all profits  that result from the exchange of the PCS licenses
with the FCC, which will be allocated to the Limited Partner and General Partner
on the basis of 49.9% and 50.1%,  respectively.  Subsequently,  all  profits and
losses  will  be  allocated  to the  Limited  Partner  and  General  Partner  in
proportion to their interests, 49.9% and 50.1%, respectively.


<PAGE>

4. Long-Term Debt

In connection  with the PCS "C-Block"  auction,  $4.2 million was deposited with
the FCC of which $3.5 million was borrowed from the Limited Partner under a line
of credit which is due and payable on December 1, 2006. On September 27, 1996 an
additional  $4.4 million was advanced to cover the remaining down payment on the
licenses won. The interest rate on the outstanding  borrowings under the line is
fixed at 15% per annum; additionally, a commitment fee of 20% per annum is being
charged on the total line of credit,  which was $25.0 million prior to April 18,
1997 and $41.8  million  thereafter.  The amounts  due to the  Limited  Partner,
including  accrued  interest and commitment  fees, at December 31, 1999 and 2000
are $69.8  million and $83.5  million,  respectively.  On March 31,  1997,  $1.6
million was advanced to Aer Force to cover the first interest  payment under the
FCC debt.  Also,  on that date,  $2.3  million  was  advanced  to the other four
partnerships to cover their first interest  payment  bringing the total advanced
to $3.9 million.  As a part of the FCC restructuring  plan, the $3.9 million was
returned in  September  1998 and the loan to the  Limited  Partner was repaid to
that extent.

Under a recapitalization of the Partnership that was implemented on February 14,
2001, the Limited Partner contributed $69.0 million of the outstanding debt as a
capital  contribution  and the  remaining  $16.1  million was converted to newly
created Subordinated Notes (See Note 5).

5. Subsequent Events/Pro Forma Basis of Accounting (Unaudited)

On February 14, 2001,  Sunshine (a "C"  Corporation),  which was incorporated on
July 13, 2000,  succeeded,  by merger, to the rights and obligations of Fortunet
(the "Spin Off").  The merger is expected to be accounted for at historical cost
as Fortunet and Sunshine are  entities  under common  control.  The common stock
outstanding  of Sunshine  consists of  3,057,060  shares of Class A Common Stock
which are entitled to one vote per share and 3,069,313  shares of Class B Common
Stock which will be entitled to five votes per share. In all economic terms, the
Class A and Class B shares are equal.  The General Partner  received 100% of the
Class B  shares  representing  50.1% of the  outstanding  common  stock  and the
Limited Partner received 100% of Class A shares representing 49.9% of the common
stock. As part of the reorganization,  Lynch PCS Corporation A contributed $69.0
million  of the debt  owed to it as a  capital  contribution  to  Sunshine.  The
remaining  indebtedness  of $16.1  million  was  restructured  into eight  equal
Subordinated  Notes totaling $16.1 million,  at 9% interest,  due in three month
increments  beginning  three  years  from  the  date  of  issuance,  subject  to
acceleration in certain circumstances. In addition, Sunshine sold to Lynch for a
total of $250,000,  10,000  shares of Preferred  Stock with a total  liquidation
value of $10  million and  Warrants  to acquire  4.3  million  shares of Class A
Common  Stock at $.75 per  share.  The  Preferred  Stock  and  warrants  will be
recorded at their respective estimated fair values at the time of sale to Lynch.
The Limited Partner then  distributed its shares in Sunshine to Lynch,  and then
Lynch distributed such shares to its shareholders.

Fortunet is expected to have cash of $250,000 at the time of the spin off.


<PAGE>

The terms of the Preferred Stock are as follows:

o    dividends in kind at an annual rate of seven shares of additional preferred
     stock for each one hundred shares of preferred  stock  outstanding  for the
     first five years and thereafter dividends in cash at the annual rate of 7%,

o    no voting rights except as provided by law, and

o    must be redeemed at $1,000 per share, plus accrued and unpaid dividends, on
     a change in  control  of the Class A or Class B common  stock,  or upon the
     sale of one or more PCS  licenses  for  cash or a  non-cash  sale  which is
     subsequently  converted into or redeemed for cash in an amount proportional
     to that number of persons covered by the sale of such licenses for cash, or
     that portion of a non-cash sale subsequently converted into or redeemed for
     cash,  compared  to the total  persons  covered  by our three  initial  PCS
     licenses,  in each case based on the 1998 or most recent  estimates  by the
     United States Bureau of Census, and

o    may be redeemed at $1,000 per share plus accrued and unpaid  dividends,  if
     funds are lawfully available, and the board of directors consents.

As a result of the above merger,  Sunshine will file a U.S.  Federal  income tax
return. Accordingly at the date of the reorganization,  the company will provide
for deferred income taxes for temporary  differences  (primarily the reserve for
impairment  of PCS licenses)  between the  financial  statement and tax bases of
Sunshine's  assets and  liabilities.  At December 31, 2000 such adjustment would
create a  deferred  tax  asset of  approximately  $4.6  million,  which is fully
reserved in the pro forma financial statements due to uncertainty  regarding its
realization.

Pro-forma  earnings  (loss)  per share  has been  calculated  assuming  that the
6,126,373  shares of common stock of Sunshine  (3,057,060  Class A and 3,069,313
Class B) have been outstanding from the beginning of the periods presented.

On February 1, 2001, Sunshine has also agreed with Lynch Interactive Corporation
that if the  holder  of a  convertible  note of  Lynch  Interactive  Corporation
converts all or a portion of its note prior to December 10, 2004,

Sunshine  will issue:

o    to the  holder,  one  share of our Class A common  stock for each  share of
     Lynch  Interactive  Corporation stock to be received by the holder, up to a
     maximum of 235,294 shares;

o    to the holders of our Class B common  stock,  1.0040  shares of  additional
     Class B common  stock for each share of Class A common  stock issued to the
     holder; and

o    to Lynch Interactive Corporation, warrants to purchase 1.9125 shares of our
     Class A common  stock for each share of Class A common  stock issued to the
     holder.


<PAGE>

The conversion by the holder of any or all of the Lynch Interactive  Corporation
notes  would  result in  dilution in the  ownership  of our common  stock by the
current holders of the Class A common stock.

As of February  22,  2001,  Sunshine and Lynch agreed that the above Class A and
Class  B  common  shares  would  be  issued  currently  and  the  warrants  were
eliminated.  The Class A shares are being held in escrow by Lynch.  The issuance
of the  additional  Class A and  Class B  common  shares  was  accounted  for as
dividend at the fair value of $94,306.

On February 14, 2001, Sunshine granted its directors options to purchase 280,000
shares,  including  130,000 shares issued to the  non-employee  Chief  Executive
Officer,  of Class A common stock at $0.75 per share. Such options are to become
exercisable  three  years from the date of grant and expire  five years from the
date of grant. The 130,000 shares issued to the Chief Executive  Officer will be
accounted  for at fair value in  accordance  with the  provisions  of EITF 96-18
"Accounting for Equity  Instruments  That Are Issued To Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services." The fair value of
the  awards  are  calculated  using  the  Black  Scholes  Option  Pricing  Model
(approximatley  $325,000 at March 31,  2001),  and will be recognized as expense
over the three year vesting period of the option.

6.  Matters Occuring Subsequent to the Date of the
    Auditors Report (Unaudited)

As of May 1, 2001, the Company entered into an agreement with Graylink Wireless,
Inc. (whose  President will serve as the Company's  Chief Operating  Officer) to
provide management  services to the Company.  The agreement calls for payment of
$125,000  for  services  rendered  during  2001 and not less than  $200,000  for
service rendered in 2002.

As of May 1, 2001,  Sunshine  granted to its Chief Operating  Officer options to
purchase  306,819 of its Class A common  stock at $1.50 per  share.  50% of such
options  become  exercisable  on  Sunshine's  meeting  its  first  FCC  mandated
build-out  requirement,  which is expected to occur prior to September 17, 2001,
and the  remaining  50% will  become  exercisable  on the  occurance  of certain
defined events.  All such options expire five years from the date of grant. Such
options will also be accounted  for in  accordance  with the  provisions of EITF
96-18.



                                   SIGNATURES

In  accordance  with  Section  13 or 15(d) of the  Exchange  Act,  Sunshine  PCS
Corporation  caused this  report to be signed on its behalf by the  undersigned,
thereunto duly authority.

                            Sunshine PCS Corporation


                            By: /s/ Karen E. Johnson
                                    --------------------
                                    Karen E. Johnson
                                    President

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons  on  behalf  of  the  Sunshine  PCS  Corporation  and  in the
capacities and on the dates indicated:

By: /s/ Karen E. Johnson            President (Chief Executive,
        --------------------        Principal Financial and
        Karen E. Johnson            Chief Accounting Officer)
                                    and Director              February 1, 2002

   /s/ David Ahl                    Director                  February 1, 2002
       -------------
       David Ahl

   /s/ Robert E. Dolan              Director                  February 1, 2002
       ---------------
       Robert E. Dolan