SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
(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, 2006

                                       OR

  Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                        Commission File Number 333-50948

                            SUNSHINE PCS CORPORATION
             (Exact name of registrant as specified in its charter)

            Delaware                                            30-0076986
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

                                65 Highland Road
                               Rye, New York 10580
              (Address and zip code of principal executive offices)

       Registrant's telephone number, including area code: (914-967-3285)

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

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

     Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act Yes [ ] No [X]

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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. [ ]

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

     The issuer's revenues for the fiscal year ended December 31, 2006 were $0.

     As of March 15, 2007, the aggregate market value of the Company's voting
and nonvoting common equity held by non-affiliates of the Company was
approximately US $60,000, which value, solely for the purposes of this
calculation, excludes shares held by the Company's officers, directors, and
their affiliates. Such exclusion should not be deemed a determination or an
admission by the issuer that all such individuals are, in fact, affiliates of
the issuer.

     The number of shares of the Registrant's Class A Common Stock issued and
outstanding as of March 15, 2007 was 4,588,653.


<PAGE>

                            SUNSHINE PCS CORPORATION
                                TABLE OF CONTENTS

                                                                        Page No.

Item 1.         Description of Business                                     3
Item 2.         Description of Properties                                   3
Item 3.         Legal Proceedings                                          3-4
Item 4.         Submission of Matters To a Vote of Security Holders         4
Item 5.         Market For Common Equity, Related Stockholder Matters
                  and Small Business Issuer Purchases of
                  Equity Securities                                         4
Item 6.         Management's Discussion and Analysis or Plan
                  of Operation                                             4-6
Item 7.         Financial Statements                                       6-15
Item 8.         Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                       15
Item 8A.        Controls and Procedures                                   15-16
Item 8B.        Other Information                                           16
Item 9.         Directors and Executive Officers of the Registrant          17
Item 10.        Executive Compensation                                      17
Item 11.        Security Ownership of Certain Beneficial Owners and
                  Management and Related Stockholder Matters              17-18
Item 12.        Certain Relationships and Related Transactions              19
Item 13.        Exhibits, List and Reports on Form 8-K                    19-20
Item 14.        Principal Accountant Fees and Services                      20


                                       2

<PAGE>

                                     PART I

Item 1.  Description of Business

         We, Sunshine PCS Corporation ("Sunshine", or the "Company") are
currently a holding company with $580, 307 in cash and cash equivalents as of
December 31, 2006. We currently have no appreciable operations other than
maintenance status as a public company. We are continuing to evaluate all
options available to us at this time. One option is to make a further
distribution of any remaining cash after all accounts payable and other
liabilities are satisfied, effectively liquidating the Company.

         Prior to December 31, 2003, we were in the business of developing our
three personal communication services licenses in Florida. On that date, we
completed the sale of our three 15 megahertz C-Block personal communications
services licenses to Cingular Wireless LLC for $13,600,000 in cash. Pursuant to
the sale agreement, we agreed to the customary indemnification of Cingular
Wireless, including indemnification for losses, if any, resulting from certain
regulatory matters (see "Regulatory Matters" below) and losses resulting from
the litigation described in "Item 3. Legal Proceedings." In related
transactions, we used a portion of the sales proceeds to acquire all of our
preferred stock and warrants held by Lynch Interactive Corporation for an
aggregate amount of $7,587,000 and all of our outstanding Class B Common Stock
for an aggregate amount of $613,863. On March 19, 2004, we made cash
distribution of $0.83 per share on our outstanding Class A Common Stock.

Item 2.  Description of Properties

         We have no material property.

Item 3.  Legal Proceedings

The Company along with Fortunet Communications, L.P., our
predecessor-in-interest, as well as Victoria G. Kane, the sole stockholder of
Fortunet Wireless Communication Corporation, which was previously our largest
stockholder, Karen E. Johnson, our former Chief Executive Officer, and Lynch
Interactive Corporation ("Interactive"), among others, were named as defendants
in a lawsuit brought in 2001 under the so-called "qui tam" provisions of the
federal False Claims Act in the United States District Court for the District of
Columbia. The complaint alleged that the defendants defrauded the United States
Government (the "Government") by creating "sham" bidding entities to participate
in certain Federal Communications Commission ("FCC") spectrum auctions
restricted to small businesses, and unfairly obtained bidding credits and
favorable government financing in these and other spectrum auctions in the mid
and late 1990's.

In May 2006, a tentative settlement was reached pursuant to which the defendants
agreed to pay the Government $130 million, plus $9 million to Relator's counsel
as legal fees and expenses. In June 2006, the defendants reached a tentative
agreement allocating the above-mentioned settlement amounts among themselves. In
July 2006, the definitive settlement agreements with the Government and the
Relator were signed and approved by the federal judge hearing the case and the
case was dismissed in August 2006. In entering into the settlement agreements,
the Company admitted no liability and the conduct giving rise to the case is
expressly excluded as a basis for future administrative proceedings by the FCC.

The defendants have agreed to an allocation of the settlement amount and the
payment to the Relator's counsel, and the Company was not required to fund any
portion thereof. The defendants have not agreed among themselves as to the share
of litigation costs each defendant should ultimately bear. To date, Interactive
and certain other defendants have paid all legal fees associated with this
action, other than the fees the Company has paid and accrued under the
indemnification provisions of the agreement on the sale of our licenses to
Cingular Wireless. Prior to our becoming a public company, in 2001, Interactive
held a significant equity ownership position in our Company and prior to the
acquisition of licenses by Cingular, in 2005, Interactive held notes, preferred
stock and options to acquire our Class A Common Stock. These defendants have
funded approximately $8 million of the legal costs not directly attributable to
any particular defendant (joint defense costs). It is currently unclear to what
extent those defendants (or any other defendant) may seek to reimbursement from
the Company for part or all of their defense. While management believes that it
would be able to satisfy the Company's obligations under such a potential
request with its current resources, there is no assurance that such could be
accomplished. The Company will accrue a liability in accordance with SFAS No. 5,
when it is probable that a liability has been incurred and the amount of the
loss can be reasonably estimated.

                                       3

<PAGE>

         The Company does not have any insurance to cover the costs of defending
this lawsuit, which costs may be material.

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

         None.

                                     PART II

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

         The Class A common stock trades on the over-the-counter market, under
the symbol: SNSHA.PK. The following table sets forth the high and low closing
prices of the Class A common stock for the periods indicated, as reported by
published sources.

                                                           Low         High
                                                        -----------------------
2006 Fiscal Year:
  First Quarter                                         $  .015     $   .06
  Second Quarter                                        $  .01      $   .05
  Third Quarter                                         $  .04      $   .14
  Fourth Quarter                                        $  .1125    $   .12

                                                           Low         High
                                                        -----------------------
2005 Fiscal Year:
  First Quarter                                         $  0.105    $  0.13
  Second Quarter                                        $  0.105    $  0.11
  Third Quarter                                         $  0.11     $  0.13
  Fourth Quarter                                        $ 0.1125    $  0.15

         As of March 10, 2007, there were approximately 700 holders of record of
our Class A common stock.

         On March 2, 2004, our Board of Directors declared a cash distribution
on our Class A common stock of $0.83 per share. Such dividend was paid on March
19, 2004. This is the first distribution on the Class A common stock.

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

Forward-Looking Statements and Uncertainty of Financial Projections

         Forward-looking statements are not based on historical information but
relate to future operations, strategies, financial results or other
developments. Forward-looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by, or on behalf of, us.

Status

         We are continuing to evaluate all options available to Sunshine at this
time. One option is to make a further distribution of any remaining cash after
all accounts payable and other liabilities are satisfied, effectively
liquidating the company.

Results of Operations

         During the year ended December 31, 2006, our net loss was approximately
$20,000 as compared to net loss of approximately $80,000 for the year ended
December 31, 2005.

                                       4

<PAGE>

         During the year ended December 31, 2006, the Company recorded $104,493
in expenses. Such amount was reduced by approximately $56,000 as a result of the
reversal of previously recorded contingency of $40,000 in connection with the
sale of the licenses to Cingular and reversal of accrual for state property
taxes of $16,000. Expenses incurred of approximately $100,000 consist of
accounting and other professional fees associated with maintaining a public
company status. Pursuant to the sale agreement with Cingular Wireless, we agreed
to the customary indemnifications, including indemnification for losses
resulting from certain regulatory matters and losses resulting from the
litigation described above. Sunshine considered it highly unlikely that Cingular
would incur losses; however, in accordance with the provisions of Financial
Accounting Standards Board ("FASB") Interpretation, No. 45 "Guarantor Accounting
and Disclosure Requirements," as of December 31, 2003, the Company recorded a
liability of $40,000 which represented the Company's best estimate of the fair
value of such indemnification. On November 21, 2006, the Company's obligation
under this indemnification expired and the $40,000 liability was reversed.

         During the year ended December 31, 2005, the Company recorded
approximately $100,000 in Expenses, which primarily consist of accounting and
other professional fees associated with maintaining a public company status.

         Investment income was approximately $28,000 in 2006; as compared to
approximately $20,000 in 2005 as higher interest rates in the Company
investments in the United States Treasury Securities were offset by lower
average investment balances.

Liquidity and Capital Resources

         At December 31, 2006, we had approximately $580,000 in cash as compared
to approximately $691,000 at December 31, 2005. Absent a significant change in
the Company, we expect to pay about $100,000 in costs and expenses in 2007.

Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 158 "Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans--an
amendment of SFAS Nos. 87, 88, 106, and 132(R)". This statement requires the
recognition of the over funded or under funded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its consolidated balance sheet and to recognize changes in that funded status
in the year in which the changes occur through comprehensive income. This
statement also requires the measurement of the funded status of a plan as of the
date of the year-end consolidated balance sheet and disclosure in the notes to
financial statements additional information about certain effects on net
periodic benefit cost for the next fiscal year that arise from delayed
recognition of the gains or losses, prior service costs or credits, and
transition asset or obligation. This statement is effective for fiscal years
ending after December 15, 2006. The implementation of SFAS No. 158 had no effect
on the Company's financial statements.

In September 2006, the FASB issued SFAS No. 157 "Fair Value Measurements". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 creates consistency and comparability in fair
value measurements among the many accounting pronouncements that require fair
value measurements but does not require any new fair value measurements. This
Statement is effective for fiscal years beginning after November 15, 2006. The
adoption of SFAS No. 157 is not expected to have a material impact on the
Company's financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108
expressing the staff's views regarding the process of quantifying financial
statement misstatements. The staff believes that in making materiality
evaluations of correcting a financial statement misstatement, management should
quantify the carryover and reversing effects of prior year misstatements on the
current year financial statements. The cumulative effect of the initial
application, if any, should be reported in the carrying amount of assets and
liabilities as of the beginning of the fiscal year and the offsetting adjustment
to the opening balance of retained earnings. This SAB is effective for fiscal
years ending after November 15, 2006. The adoption of SAB No. 108 did not have a
material impact on the Company's financial statements.

                                       5

<PAGE>

In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes", which clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with SFAS No.
109, "Accounting for Income Taxes". An uncertain tax position will be recognized
if it is determined that it is more likely than not to be sustained upon
examination. The tax position is measured at the largest amount of benefit that
is greater than fifty percent likely of being realized upon ultimate settlement.
The cumulative effect of applying the provisions of this Interpretation is to be
reported as a separate adjustment to the opening balance of retained earnings in
the year of adoption. This statement is effective for fiscal years beginning
after December 15, 2006. Upon adoption, management estimates that there will not
be a significant adjustment to retained earnings for a change in reserves for
uncertain tax positions and is in the process of finalizing its analysis.

Quantative and Qualitative Analysis of Market Risk

         The Company is minimally exposed to changes in market risk because as
of December 31, 2006 the Company has no market sensitive assets or liabilities.

Off Balance Sheet Arrangements

         None.

Item 7.  Financial Statements

                                      INDEX
                            Sunshine PCS Corporation


Report of Independent Registered Public Accounting firm..................   7
Balance Sheets as of  December 31, 2006 and 2005.........................   8
Statements of Operations for the years ended December 31, 2006 and 2005..   9
Statement of Changes in Stockholders'
Equity for the years ended December 31, 2006 and 2005....................   10
Statements of Cash Flows for the years ended December 31, 2006 and 2005..   11
Notes to Financial Statements............................................ 12-15


                                       6

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Sunshine PCS Corporation
New York, New York

         We have audited the accompanying balance sheets of Sunshine PCS
Corporation (the "Company") as of December 31, 2006 and 2005 and the related
statements of operations, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

         In our opinion, such financial statements present fairly, in all
material respects, the financial position of Sunshine PCS Corporation as of
December 31, 2006 and 2005 and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Daszkal Bolton, LLP

Boca Raton, Florida
March 30, 2007


                                       7

<PAGE>

<TABLE>
<CAPTION>
                            Sunshine PCS Corporation
                                 Balance Sheets
                        As of December 31, 2006 and 2005


<S>                                                                     <C>                 <C>
                                                                               2006                2005
Assets

Cash and cash equivalents..........................................     $          580,307  $          691,920
Other Assets.......................................................                  3,767               4,842
                                                                        ---------------------------------------
  Total Assets.....................................................     $          584,074  $          696,762
                                                                        =======================================

Liabilities and stockholders' equity

Liabilities

Accounts payable and accrued expenses..............................     $           18,500  $          111,100

Stockholders' equity

Class A:  no par value Authorized shares-20,000,000; 4,588,653 shares
   issued and outstanding at December 31, 2006 and 2005............                     --                 --
Class B:  no par value Authorized shares-9,000,000; no shares
   outstanding at December 31, 2006 and 2005.......................                     --                 --
Additional paid-in capital.........................................             80,514,012          80,514,012
Accumulated deficit ...............................................            (79,948,438)        (79,928,350)
                                                                        ---------------------------------------
  Stockholders' equity.............................................                565,574             585,662
                                                                        ---------------------------------------
  Total liabilities and stockholders' equity.......................     $          584,074  $          696,762
                                                                        =======================================

                 See accompanying notes to financial statements.
</TABLE>


                                       8

<PAGE>

<TABLE>
<CAPTION>
                            Sunshine PCS Corporation
                            Statements of Operations
                 For the Years Ended December 31, 2006 and 2005

<S>                                                          <C>                  <C>
                                                                  2006                2005

Interest income.........................................     $         28,405     $       19,722

Expenses:
  Professional Fees.....................................              (43,324)           (38,064)
  General and administrative expenses...................              (61,169)           (62,064)
                                                          ----------------------------------------
                                                                     (104,493)          (100,128)
                                                          ----------------------------------------

Other income:

  Reversal of previously recorded contingency accrual...               40,000                  -
  Reversal of property accrual..........................               16,000                  -
                                                          ----------------------------------------
                                                                       56,000                 -
                                                          ----------------------------------------
Net loss................................................     $        (20,088)    $      (80,406)
                                                          ----------------------------------------
Basic and diluted loss per common share.................     $          (0.00)    $        (0.02)
                                                          ==================== ===================
Weighted average shares used in basic computation.......            4,588,653          4,588,653
                                                          ==================== ===================


See accompanying notes to financial statements
</TABLE>

                                       9

<PAGE>

<TABLE>
<CAPTION>
                            Sunshine PCS Corporation
                        Statement of Stockholders' Equity
                 For the Years Ended December 31, 2006 and 2005


                                                       Shares of    Shares of
                                                        Class A      Class B
                                                         Common       Common    Additional
                                                         Stock        Stock       paid-in     Accumulated  Stockholders'
                                                       Outstanding  Outstanding    capital      Deficit        equity

<S>                                                     <C>                <C>  <C>          <C>               <C>
Balance at January 1, 2005                              4,588,653           --  $80,514,012  $(75,849,804)     $664,208
Return of excess cash distribution to Stockholders                                       --         1,860         1,860
Net loss                                                                                 --       (80,406)      (80,406)

                                                      ------------------------------------------------------------------
    Balance at December 31, 2005                        4,588,653                80,514,012   (79,928,350)      585,662

Net loss                                                                                          (20,088)      (20,088)
                                                      ------------------------------------------------------------------
    Balance at December 31, 2006                        4,588,653           --  $80,514,012  $(79,948,438)     $565,574
                                                      ==================================================================

         See accompanying notes to financial statements

</TABLE>


                                       10

<PAGE>

                            Sunshine PCS Corporation
                            Statements of Cash Flows
                 For the Years ended December 31, 2006 and 2005


                                                              2006       2005
                                                           ---------------------
Operating activities
Net loss                                                   $(20,088)   $(80,406)
Adjustments to reconcile net loss to cash used in
 operating activities:
Reversal of previously recorded accruals                    (56,000)
Decrease in accounts payable and accrued expenses           (36,600)    (21,191)
Decrease in other assets                                      1,075       1,251
                                                           ---------------------
Net cash used in operating activities                      (111,613)   (100,346)

Investing Activities
Net cash provided by (used in) investing activities              --          --

Financing activities

Return of excess cash distribution to Stockholders               --       1,860
                                                           ---------------------
Net cash provided by financing activities                                 1,860
                                                           ---------------------

Net change in cash                                         (111,613)    (98,486)
Cash and cash equivalents at beginning of year              691,920     790,406
                                                           ---------------------
Cash and cash equivalents at end of year                   $580,307    $691,920
                                                           =====================

Supplemental cash flow information:
Interest paid                                                   $--         $--
Income taxes paid                                               $--         $--

                 See accompanying notes to financial statements


                                       11

<PAGE>

                            Sunshine PCS Corporation
                          Notes to Financial Statements

                                December 31, 2006

1.  Organization

         Sunshine PCS Corporation ("Sunshine", or the "Company") is currently a
holding company with and no appreciable operations other than maintenance status
as a public company and, therefore, is no longer in the development stage. The
Company continues to evaluate all options available to us at this time. One
option is to make a further distribution of any remaining cash after all
accounts payable and other liabilities are satisfied, effectively liquidating
the Company

         On December 31, 2003, Cingular Wireless LLC ("Cingular"), pursuant to a
definitive agreement, executed on August 18, 2003 ("Sale Agreement"), acquired
all of Sunshine PCS Corporation's ("Sunshine") three personal communications
services licenses for total net proceeds of $13.6 million. During 2003, the
Company recorded an $11.1 million gain on the sale of our PCS licenses (proceeds
of $13.6 million less $0.2 million expenses of sale over the remaining carrying
value of the licenses of $2.4 million). Also during 2003, the Company accrued
$0.5 million for Director Compensation that was attributable to their efforts in
2003, primarily the sale of the PCS licenses to Cingular. This amount was paid
in 2004.

         Pursuant to the sale agreement, the Company agreed to the customary
indemnification of Cingular Wireless, including indemnification for losses
resulting from certain regulatory matters and losses resulting from the "qui
tam" lawsuit that is described in Note 6. Sunshine considers it highly unlikely
that Cingular will incur losses, however, in accordance with the provisions of
Financial Accounting Standards Board ("FASB") Interpretation, No. 45 "Guarantor
Accounting and Disclosure Requirements," as of December 31, 2003, the Company
recorded a liability of $40,000 which represented the Company's best estimate of
the fair value of such indemnification. On November 21, 2006, the Company's
obligation under this indemnification expired and the $40,000 liability was
reversed.

2.  Accounting and Reporting Policies

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.

Cash Equivalents

         Cash and Cash Equivalents are invested in United States Treasury money
market funds for which an affiliate of the Company serves as the investment
manager. The company considers highly liquid investments with an original
maturity of less than three months as cash equivalents.

Concentration of Credit Risk

         Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash and cash equivalents.
Management believes the financial risks associated with these financial
instruments are minimal.

          The Company maintains its cash in bank deposit accounts that are
guaranteed by the Federal Deposit Insurance Corporation ("FDIC") up to $100,000.
During 2006 and 2005, balances in these accounts never exceeded $100,000.

                                       12

<PAGE>

         Accounts held at United States Treasury money market funds, which are
not guaranteed by the FDIC or insured by the Securities Investor Protection
Corporation, were approximately $80,000 and $191,000 at December 31, 2006 and
2005, respectively.

Fair Values of Financial Instruments

         The Company's financial instruments consist primarily of cash and cash
equivalents and accounts payable. All financial instruments are accounted for on
a historical cost basis, which approximates fair value given the short-term
nature of these instruments.

Income Taxes

         Sunshine (a "C" corporation for Federal tax purposes) files a U.S.
Federal income tax return. Accordingly at the date of the reorganization,
Sunshine provided 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.

         Valuation allowances have been provided for deferred tax assets of
approximately $1.5 million at both December 31, 2006 and 2005 respectively, as
the realization of such assets is dependent upon the generation of future
taxable income during a period when such losses would be utilizable. The Company
currently has $3.6 million of net federal operating tax loss carry forwards,
generated in 2001 through 2006, expiring in the years 2021 through 2026. In
addition, the Company has approximately $4.9 million of state net operating loss
carry forwards expiring in the years 2021 through 2025.

         Cumulative temporary differences at December 31, 2006 and 2005 are as
follows (amounts rounded):

                                   December 31, 2006       December 31, 2005
                                   -----------------       -----------------
Deferred tax assets:
Net operating losses.............  $       1,406,900       $       1,399,400
Other............................            107,000                 107,000
                                   -----------------       -----------------
                                           1,514,900               1,506,400
Valuation allowance..............         (1,514,900)             (1,506,400)
                                   -----------------       -----------------
                                   $               -       $               -
                                   =================       =================



         Income tax provision (benefit) for the years ended December 31, 2006
and 2005, is comprised of (amounts rounded):

                                           2006                  2005
                                   --------------------- ---------------------
Current income tax benefit                           --                    --
Deferred income tax benefit                     ($7,500)             ($30,000)
Valuation allowance                               7,500                30,000
                                   --------------------- ---------------------
  Income tax benefit                                $--                   $--
                                   ===================== =====================


         The reconciliation of the provision (benefit) for income taxes for the
years ended December 31, 2006 and 2005, and the amount computed by applying the
statutory federal income tax rate to net loss is as follows (amounts rounded):

                                       13

<PAGE>

                                                      2006             2005
                                                --------------------------------
Tax benefit provision at statutory rate ......        $ (6,800)        $(27,000)
State taxes, net of federal benefit...........            (700)          (3,000)
Increase in valuation allowance...............           7,500           30,000
                                                ---------------    -------------
                                                $          --      $         --
                                                ===============    =============

Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 158 "Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans--an
amendment of SFAS Nos. 87, 88, 106, and 132(R)". This statement requires the
recognition of the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its consolidated balance sheet and to recognize changes in that funded status
in the year in which the changes occur through comprehensive income. This
statement also requires the measurement of the funded status of a plan as of the
date of the year-end consolidated balance sheet and disclosure in the notes to
financial statements additional information about certain effects on net
periodic benefit cost for the next fiscal year that arise from delayed
recognition of the gains or losses, prior service costs or credits, and
transition asset or obligation. This statement is effective for fiscal years
ending after December 15, 2006. The implementation of SFAS No. 158 had no effect
on the Company's financial statements.

In September 2006, the FASB issued SFAS No. 157 "Fair Value Measurements". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 creates consistency and comparability in fair
value measurements among the many accounting pronouncements that require fair
value measurements but does not require any new fair value measurements. This
Statement is effective for fiscal years beginning after November 15, 2006. The
adoption of SFAS No. 157 is not expected to have a material impact on the
Company's financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108
expressing the staff's views regarding the process of quantifying financial
statement misstatements. The staff believes that in making materiality
evaluations of correcting a financial statement misstatement, management should
quantify the carryover and reversing effects of prior year misstatements on the
current year financial statements. The cumulative effect of the initial
application, if any, should be reported in the carrying amount of assets and
liabilities as of the beginning of the fiscal year and the offsetting adjustment
to the opening balance of retained earnings. This SAB is effective for fiscal
years ending after November 15, 2006. The adoption of SAB No. 108 did not have a
material impact on the Company's financial statements.

In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes", which clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with SFAS No.
109, "Accounting for Income Taxes". An uncertain tax position will be recognized
if it is determined that it is more likely than not to be sustained upon
examination. The tax position is measured at the largest amount of benefit that
is greater than fifty percent likely of being realized upon ultimate settlement.
The cumulative effect of applying the provisions of this Interpretation is to be
reported as a separate adjustment to the opening balance of retained earnings in
the year of adoption. This statement is effective for fiscal years beginning
after December 15, 2006. Upon adoption, management estimates that there will not
be a significant adjustment to retained earnings for a change in reserves for
uncertain tax positions and is in the process of finalizing its analysis.

3.  Loss Per Share

         The loss per share has been calculated based on actual number of shares
outstanding. Warrants options and the convertible preferred have been excluded
from the computation of diluted loss per share for all periods for which there
are losses because their issuance would have the effect of reducing the loss per
share.

                                       14

<PAGE>

4.  Stock Options

         As compensation for their services as members of the Board of
Directors, on February 14, 2001, which was prior to a public trading market for
our stock, Sunshine granted its directors options to purchase 150,000 shares. In
addition, it granted its non-employee Chief Executive Officer options for
130,000 shares. All of options are to purchase shares of Class A Common Stock at
$.75 per share. . Such options vested over a three-year period from the date of
grant and expire five years from the date of grant, February 13, 2006.

         On January 18, 2002, the Company's Board of Directors authorized the
issuance of options for 50,000 shares of Class A common stock to a third party
in connection with the construction of equipment. The exercise price of the
options is $2.50 per share and the option expired on January 18, 2007.

5.       Litigation

The Company along with Fortunet Communications, L.P., our
predecessor-in-interest, as well as Victoria G. Kane, the sole stockholder of
Fortunet Wireless Communication Corporation, which was previously our largest
stockholder, Karen E. Johnson, our former Chief Executive Officer, and Lynch
Interactive Corporation ("Interactive"), among others, were named as defendants
in a lawsuit brought in 2001 under the so-called "qui tam" provisions of the
federal False Claims Act in the United States District Court for the District of
Columbia. The complaint alleged that the defendants defrauded the United States
Government (the "Government") by creating "sham" bidding entities to participate
in certain Federal Communications Commission ("FCC") spectrum auctions
restricted to small businesses and unfairly obtained bidding credits and
favorable government financing in these and other spectrum auctions in the mid
and late 1990's.

In May 2006, a tentative settlement was reached pursuant to which the defendants
agreed to pay the Government $130 million, plus $9 million to Relator's counsel
as legal fees and expenses. In June 2006, the defendants reached a tentative
agreement allocating the above-mentioned settlement amounts among themselves. In
July 2006, the definitive settlement agreements with the Government and the
Relator were signed and approved by the federal judge hearing the case and the
case was dismissed in August 2006. In entering into the settlement agreements,
the Company admitted no liability and the conduct giving rise to the case is
expressly excluded as a basis for future administrative proceedings by the FCC.

The defendants have agreed to an allocation of the settlement amount and the
payment to the Relator's counsel and the Company was not required to fund any
portion thereof. The defendants have not agreed among themselves as to the share
of litigation costs each defendant should ultimately bear. To date, Interactive
and certain other defendants have paid all legal fees associated with this
action, other than the fees the Company has paid and accrued under the
indemnification provisions of the agreement on the sale of our licenses to
Cingular Wireless. Prior to our becoming a public company, in 2001, Interactive
held a significant equity ownership position in our Company and prior to the
acquisition of licenses by Cingular, in 2005, Interactive held notes, preferred
stock and options to acquire our Class A Common Stock. These defendants have
funded approximately $8 million of the legal costs not directly attributable to
any particular defendant (joint defense costs). It is currently unclear to what
extent those defendants (or any other defendant) may seek to reimbursement from
the Company for part or all of their defense. While management believes that it
would be able to satisfy the Company's obligations under such a potential
request with its current resources, there is no assurance that such could be
accomplished. The Company will accrue a liability in accordance with SFAS No. 5,
when it is probable that a liability has been incurred and the amount of the
loss can be reasonably estimated.

         The Company does not have any insurance to cover the costs of defending
this lawsuit, which costs may be material.


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

         There were no disagreements with our independent registered public
accountants over this period.

Item 8A.  Controls and Procedures

                                       15

<PAGE>

         (a) Information required by Item 307

         Evaluation of disclosure controls and procedures. As required by Rule
15d-15 under the Securities Exchange Act of 1934, as of the end of the period
covered by this report, the Company carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures. This evaluation was carried out under the supervision and with the
participation of our principal executive officer as well as our principal
financial officer, who concluded that our disclosure controls and procedures are
effective.

         Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Securities Exchange Act are recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act are accumulated and communicated to management, including our
principal executive officer and our principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure.

         (b) Information required by Item 308

         None.

Item 8B.  Other Information

         None.


                                       16

<PAGE>

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

         The following table sets forth the name, business address; present
principal occupation, employment history, positions, offices or employments for
the past five years and ages as of March 24, 2007 or our executive officers and
directors. Members of the board are elected and serve for one-year terms or
until there successors are elected and qualify.

            Name           Age                       Position
   --------------------  ------   ----------------------------------------------
    David S. Ahl           60     Chairman of the Board, Chief Executive Officer
                                  and Director
    Robert E. Dolan        55     Director and Assistant Secretary

         David S. Ahl has been Chief Executive Officer since June 2004 and has
been a Class B director since November 2000. Mr. Ahl is a marketer of start-up
entities. Mr. Ahl first gained experience in this field as a promotional
director for Young and Rubicam, Inc. from 1984 to 1992. Mr. Ahl co-founded and
helped manage Advance Retail Marketing, a company that markets coupons for
supermarkets, from 1992 to 1994. Mr. Ahl then served as a general manager of
Direct Media, the world's largest mailing list brokerage and management company,
from 1994 to 1998. After leaving Direct Media in 1998, Mr. Ahl served as an
independent marketing consultant for GE Capital, AdKnowledge and
CatalogCity.com. In 1999, Mr. Ahl became the head of Client Services for Message
Media, an e-mail publishing company.

         Robert E. Dolan has been our Assistant Secretary and a Class A director
since November 2000. Mr. Dolan is also the Chief Financial Officer of Lynch
Interactive Corporation, a diversified holding company with subsidiaries
primarily engaged in multimedia (September 1999 to present), and served in such
capacity for Lynch Corporation, a diversified holding company with subsidiaries
engaged in the manufacture of electronics components and manufacturing equipment
(1993 to January 2000).

Item 10.  Executive Compensation

         No executive officer received compensation or perquisites or other
personal benefits, securities or property during fiscal years ended December 31,
2004, 2005 or 2006.

Options Outstanding

         None

Directors Compensation

None

Employment Contracts

None

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

         The following table sets forth information concerning ownership of our
common stock as of March 10, 2007 each person known by us to be the beneficial
owner of more than five percent of the common stock, each director, each
executive officer, and by all directors and executive officers as a group. We
believe that each stockholder has sole voting power and sole dispositive power
with respect to the shares beneficially owned by him. Unless otherwise
indicated, the address of each person listed below is 65 Highland Road, Rye, New
York 10580.

                                       17

<PAGE>

<TABLE>
<S>                                                            <C>              <C>
                                                                Shares         Percentage
                                                             ------------     ------------
Fortunet Wireless Communications Corporation................   767,328          16.7%
Victoria G. Kane(2).........................................   767,328          16.7%
Mario J.  Gabelli(3)........................................   829,981(4)       18.1%
Lynch Interactive Corporation(5)............................   294,217           6.4%
Robert E.  Dolan............................................       525(6)        *
All Directors and Executive Officers as a Group (4 in total)       525           *
</TABLE>

*Less than 1%

(1)  A person is deemed to be the beneficial owner of voting securities that can
     be acquired by such person within 60 days upon the exercise of options and
     warrants and the conversion of convertible securities. Each beneficial
     owner's percentage ownership is determined by assuming that options,
     warrants or convertible securities that are held by such person (but not
     those held by any other person) and that are currently exercisable or
     convertible (i.e., that are exercisable or convertible within 60 days) have
     been exercised or converted.

(2)  Victoria G. Kane is the sole stockholder of Fortunet Wireless Communication
     Corporation, and therefore shares owned by Fortunet Wireless Communication
     Corporation are set forth in the table as beneficially owned by Victoria G.
     Kane. The address of Fortunet Wireless Communications Corporation and
     Victoria G. Kane is 350 Stuyvesant Avenue, Rye, New York 10580.

(3)  Includes shares beneficially owned by Lynch Interactive Corporation. Mario
     J. Gabelli is a "control person" of Lynch Interactive Corporation and
     therefore shares beneficially owned by Lynch Interactive Corporation are
     set forth in the table as beneficially owned by Mr. Gabelli. Mr. Gabelli
     disclaims beneficial ownership of the shares held by Lynch Interactive
     Corporation except for his interest therein. The address of Mr. Gabelli is
     401 Theodore Fremd Avenue, Rye, New York 10580.

(4)  Includes (i) 350,014 shares owned directly by Mr. Gabelli (including 8,027
     held for the benefit of Mr. Gabelli under Lynch Interactive Corporation's
     401(k) Savings Plan), (ii) 10,750 shares owned by a charitable foundation
     of which Mr. Gabelli is a trustee, (iii) 175,000 shares owned by a limited
     partnership in which Mr. Gabelli is the general partner and has
     approximately a .5% interest and (iv) 294,117 shares of Class A common
     stock owned by Lynch Interactive Corporation. Mr. Gabelli disclaims
     beneficial ownership of the shares owned by Lynch Interactive Corporation,
     the foundation and by the partnership, except for his interest therein. The
     address of Mr. Gabelli is 401 Theodore Fremd Avenue, Corporate Center at
     Rye, Rye, NY 10580.

(5)  The address of Lynch Interactive Corporation is 401 Theodore Fremd Avenue,
     Rye, New York 10580.

(6)  Includes 70 shares registered in the name of Mr. Dolan's children with
     respect to which Mr. Dolan has voting and investment power and 55 shares
     held for the benefit of Mr. Dolan under Lynch Interactive Corporation's
     401(k) Savings Plan.

                                       18

<PAGE>

Item 12.  Certain Relationships and Related Transactions

         We were incorporated on July 13, 2000, and on February 14, 2001,
succeeded to the rights and obligations of Fortunet Communications, L.P., in
which Lynch Interactive Corporation held 49.9% of the equity. At that time,
Lynch Interactive Corporation received 2,821,766 shares of our Class A common
stock in exchange for the equity in Fortunet Communications, L.P. Lynch
Interactive Corporation then distributed those shares to its stockholders. We
also separately issued 235,294 shares of Class A common stock to Lynch
Interactive Corporation.

         Robert E. Dolan, our Assistant Secretary and Director, is the Chief
Financial Officer of Lynch Interactive Corporation.

         Item 13.  Exhibits, List and Reports on Form 8-K

         (a)      Exhibits

Exhibit Number                           Description

3.1            Amended and Restated Certificate of Incorporation of the
               Company (incorporated by reference to Exhibit 3.1 of Sunshine
               PCS Corporation's Registration Statement on Form SB-2/A (File
               No. 333-50948) (the "2001 SB-2")

3.2            Certificate of Amendment to the Amended and Restated
               Certificate of Incorporation of Sunshine PCS Corporation
               (incorporated by reference to Exhibit 3.2 of Sunshine PCS
               Corporation's Registration Statement on Form SB-2 (File No.
               333-82116) (the "2002 SB-2"))

3.3            Certificate of Second Amendment of Certificate of
               Incorporation of Sunshine PCS Corporation

3.4            By-laws of Sunshine PCS Corporation (incorporated by reference
               to Exhibit 3.2 of the 2001 SB-2)

4.1            Form of Subordinated  Note made by Sunshine PCS Corporation to
               Lynch PCS Corporation A (incorporated  by reference to Exhibit
               4.1 of the 2001 SB-2)

4.2            Warrant issued by Sunshine PCS Corporation to Lynch
               Interactive Corporation (incorporated  by reference to Exhibit
               4.2 of the 2001 SB-2)

10.1           Form of Option Agreements with Directors (incorporated by
               reference to Exhibit 10.2 of the 2001 SB-2)

10.2           Agreement and Plan of Merger dated  February 12, 2001 by and
               between the Company and Fortunet Communications, L.P.
               (incorporated by reference to Exhibit 10.3 of the 2002 SB-2)

10.3           Amended and Restated Securities Issuance Agreement, dated
               February 1, 2002, by and between the Company and Lynch
               Interactive Corporation (incorporated by reference from
               exhibit 10.4 of Sunshine PCS Corporation's registration
               statement on form SB-2 filed February 4, 2002)

10.4           Term Sheet between the Company and GrayLink Wireless Inc.
               (incorporated by reference from exhibit 10.5 of Sunshine
               PCS Corporation's registration statement on form SB-2 filed
               February 4, 2002)

10.5           Agreement for Purchase and Sale of Licenses dated August 18,
               2003, by and between Sunshine PCS Corporation, Cingular
               Wireless LLC and for purposes of Articles X and XII, certain
               stockholders including Lynch Interactive Corporation
               (incorporated by reference to Exhibit 2.1 to Sunshine PCS
               Corporation's Form 8-K dated August 19, 2003)

31.1           Rule 15d-14(a) Certification of the Chief Executive Officer

                                       19

<PAGE>

31.2           Rule 15d-14(a) Certification of the Principal Accounting Officer

32.1           Section 1350 Certification of the Chief Executive Officer

32.2           Section 1350 Certification of the Principal Accounting Officer

Item 14. Principal Accountant Fees and Services.

         Audit Fees

         The aggregate fees billed by Daszkal Bolton LLP he for professional
services rendered for the audit of the Company's 2006 and 2005 financial
statements was $18,500 and $17,500 respectively. The aggregate fees billed by
Daszkal Bolton LLP for professional services rendered for their review of the
financial statements included in the Company's Forms 10-Q was $12,000 for 2006
and $9,000 for 2005.

Audit-Related Fees

         The aggregate fees billed by Daszkal Bolton LLP for assurance and
related services for 2006 and 2005 that are reasonably related to the
performance of the audit of the Company's 2006 and 2005 financial statements and
not reported as audit fees above were $0 and $2,500 for 2006 and 2005,
respectively. The aggregate fees billed by Deloitte & Touche LLP for assurance
and related services for 2006 that are reasonably related to the performance of
the audit of the Company's 2005 financial statements and not reported as audit
fees above were $4,200.

Tax Fees

         No fees were billed by Daszkal Bolton LLP or Deloitte & Touche for 2006
or 2005.

All Other Fees

         No fees were billed by Daszkal Bolton LLP for 2006 or 2005 for services
other than as set forth above.


                                       20

<PAGE>

Board's Pre-Approval Policies and Procedures

         The Board of Directors has established a pre-approval procedure with
respect to the provision of services other than audit by its independent
auditor. For the fiscal years ended 2006 and 2005, the Board of Directors
considered that the provisions of all non-audit services were compatible with
maintaining the independence of its independent auditor.




                                       21

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York on the 30th day of March, 2007.

                                            SUNSHINE PCS CORPORATION


                                            /s/ David S. Ahl
                                            ----------------
                                            David S. Ahl
                                            Chief Executive Officer


                                POWER OF ATTORNEY

         Know all men by these presents, that each person whose signature
appears below hereby constitutes and appoints Robert E. Dolan 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 Form 10-KSB and to file the
same, with exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

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



    Signature                         Title                         Date
  ---------------------------------------------------------------------------

  /s/ David S. Ahl       Chairman of the Board of Directors,   March 30, 2007
  ----------------       Chief Executive Officer
  David S. Ahl

  /s/ Robert E. Dolan    Director and Assistant Secretary      March 30, 2007
  -------------------
  Robert E. Dolan



                                       22