SWDocID416823-1


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                       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, 2005

                                       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, 2005 were $0.

         As of March 15,  2006,  the  aggregate  market  value of the  Company's
voting and  nonvoting  common equity held by  non-affiliates  of the Company was
approximately  US  $359,000,  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, 2006 was 4,588,653.


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                            SUNSHINE PCS CORPORATION
                                TABLE OF CONTENTS

                                                                        Page No.

Item 1.   Description of Business                                          3

Item 2.   Description of Properties                                        4

Item 3.   Legal Proceedings                                                4-5

Item 4.   Submission of Matters To a Vote of Security Holders              5

Item 5.   Market For Common Equity, Related Stockholder Matters and
          Small Business Issuer Purchases of Equity Securities             5-6

Item 6.   Management's Discussion and Analysis or Plan of Operation        6-8

Item 7.   Financial Statements                                             8-20

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure                                         20

Item 8A.  Controls and Procedures                                          20

Item 8B.  Other Information                                                21

Item 9.   Directors and Executive Officers of the Registrant               22

Item 10.  Executive Compensation                                           22-23

Item 11.  Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters                       23

Item 12.  Certain Relationships and Related Transactions                   23-25

Item 13.  Exhibits, List and Reports on Form 8-K                           25-26

Item 14.  Principal Accountant Fees and Services                           26-27


<PAGE>


                                     PART I

Item 1.  Description of Business

         Prior to December 31, 2003, we, Sunshine PCS  Corporation  ("Sunshine")
were in the business of developing  our three  personal  communication  services
licenses in Florida. As described in more detail below, at that date we sold all
of our licenses  and during 2004  disposed of all  equipment  and wound down our
Florida  operations.  Since  the sale of our PCS  licenses  and wind down of our
Florida  operations,  the  Company  has no  appreciable  operations  other  than
maintenance  status  as a public  company  and,  therefore,  is no longer in the
development stage.

         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.

Background

         We were  incorporated on July 13, 2000,  with capital of $1.00,  and on
February  14,  2001,  succeeded  to  the  rights  and  obligations  of  Fortunet
Communications,  L.P.  ("Fortunet").  We were  incorporated in July 2000, as the
successor to Fortunet  Communications,  L.P. We previously  held three licenses,
which  granted us the  non-exclusive  right to provide  personal  communications
services to  approximately  960,000 people in the Florida cities of Tallahassee,
Panama  City  and  Ocala.  Personal  communications  service  is a  phrase  that
describes a wireless telecommunications service that utilizes a portion of radio
spectrum  from 1850 to 1990  megahertz,  and each of our  licenses  allows us to
offer  wireless  services  across 15  megahertz  of this  spectrum  in the above
referenced  cities.  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.  These  licenses  had an aggregate  purchase  price of $216 million
after  a 25%  bidding  credit,  and  were  financed  primarily  by  the  Federal
Communications Commission. Fortunet Communications, L.P. experienced substantial
problems in  servicing  this debt  because a  perception  developed  in both the
public and private debt and equity  markets that the supply of spectrum  greatly
exceeded realistic customer demand. While the Federal Communications  Commission
offered Fortunet Communications,  L.P. a relief plan, because this plan required
Fortunet  Communications,  L.P.  to  forfeit  30% of its down  payment,  in 1997
Fortunet  Communications,  L.P. recorded a charge of $6.6 million to reflect the
impairment in the value of its licenses. In June 1998, Fortunet  Communications,
L.P.  returned 28 of its  licenses,  and 15 megahertz of its three  remaining 30
megahertz  licenses  and  surrendered  70% of its down  payment  to the  Federal
Communications  Commission  in exchange for credits,  which were used to pay all
remaining  indebtedness to the Federal Communications  Commission.  On April 15,
1999,  the Federal  Communications  Commission  completed a reauction of all the
C-Block licenses that were returned to it. Due to considerably lower amounts bid
for  these   licenses,   in  the  quarter   ended  March  31,   1999,   Fortunet
Communications,  L.P.  recorded a further  charge of $18.5 million to write down
its investment in the licenses,  plus an additional  $0.1 million of capitalized
expenses,  leaving a net carrying value of $2.7 million  subsequent to the write
down.

         On February 22, 2001, Lynch  Interactive  Corporation  ("Interactive"),
distributed  2,821,766 shares of Sunshine's  Class A Common Stock,  representing
its 49.9% ownership it received from our incorporation,  to its shareholders, on


                                       3
<PAGE>


the  basis of one share of  Sunshine's  Class A Common  Stock for each  share of
Interactive's Common Stock outstanding.

         On  August  31,  2001,  we met the  Federal  Communications  Commission
requirement  that we provide  service  coverage to at least  one-quarter  of the
population in our licensed areas.  However,  we did not have the funds necessary
to fully  build  out a robust  voice  system  necessary  to  provide  commercial
operations, which we estimated to cost between $10.0 and $15.0 million.

         On December 31, 2003,  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 have  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  "qui  tam"  lawsuit  that is
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.

Regulatory Matters

         During our tenure as an FCC PCS licensee,  we were subject to a variety
of federal,  as well as certain state and local,  regulatory  requirements.  For
example, as a PCS licensee,  we were subject to detailed FCC license eligibility
rules,  construction notification  requirements,  and fixed microwave relocation
obligations,  among other  requirements.  We believe that we were in  compliance
with our regulatory obligations at all times that we held PCS licenses. However,
we cannot assure you that we will not be subject to future claims or liabilities
associated  with our former  status as a PCS  licensee,  our FCC licenses or any
operations based upon our licenses.

Item 2.  Description of Properties

         Following  the  sale  of  our  three  personal  communications  service
licenses we have no remaining material property.

Item 3.  Legal Proceedings

         We    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;  have  been  named as
defendants in a lawsuit  brought 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  was filed under seal with the court in February  2001,
and the seal was lifted in January  2002.  Under the False Claims Act, a private
plaintiff,  termed a "relator," may file a civil action on the U.S. government's
behalf  against  another  party for  violation  of the statute.  In return,  the
relator receives a statutory bounty from the government's litigation proceeds if
he is successful.

         The main allegation in the case is that the defendants  participated in
the creation of "sham"  bidding  entities that  allegedly  defrauded the federal
Treasury  by  improperly   participating   in  certain  Federal   Communications
Commission  spectrum  auctions  restricted  to  small  businesses,  as  well  as
obtaining  bidding credits in other spectrum  auctions  allocated to "small" and
"very small"  businesses.  While the complaint  seeks to recover an  unspecified
amount of  damages,  which  would be subject  to  mandatory  trebling  under the
statute,  a report  prepared for the relator in February 2005 alleges damages of
approximately  $91  million in respect of  bidding  credits,  approximately  $70
million in respect of government loans and approximately $206 million in respect
of subsequent resale of licenses, in each case prior to trebling.


                                       4
<PAGE>


         We were formally  served with the complaint in July 2002. At that time,
the U.S.  Department  of Justice  notified  the court that it was  declining  to
intervene in the case.  In September  2002,  we joined  Interactive  and certain
other defendants in filing two motions with the United States District Court for
the  District  of  Columbia:  a motion to dismiss  the  lawsuit  and a motion to
transfer the action to the Southern District of New York. On September 30, 2003,
the Court granted our motion to transfer the action.

         In December 2004,  the  defendants  filed a motion in the United States
District Court for the District of Columbia to compel the FCC to provide certain
information  subpoenaed  by  defendants in order to enable them to conduct their
defense. This motion was denied in May 2005 and defendants appealed. In February
2006,  the  defendants  and the FCC  reached an  agreement  granting  defendants
discovery  of  certain  documents  and  other  evidentiary  materials.   Factual
discovery against  defendants is substantially  complete and both Taylor and the
defendants have moved for summary judgment on a variety of grounds.  In November
2005, with respect to one such motion for partial summary judgment, on the issue
of damages  based on resale of licenses,  the court ruled that such damages were
not permissible.

   On March 7, 2006,  the U.S.  Department  of Justice  petitioned  the court to
allow it to intervene in the case. On March 8, 2006,  the court allowed the U.S.
Department of Justice to file a motion  supporting  its  petition.  On March 20,
2006,  the U.S.  Department of Justice filed the motion and their  complaint and
oral arguments are scheduled for April 19, 2006.  The case had been  tentatively
scheduled  for  trial  in June  2006 but the  trial  may be  delayed  due to the
government's request for intervention and related issues.

         We strongly  believe that this lawsuit is completely  without merit and
that relator's damage  computation is without basis, and we intend to vigorously
defend against the suit. Nevertheless, we cannot predict the ultimate outcome of
the  litigation,  nor can we predict  the effect that the lawsuit or its outcome
will have on our business or plan of operation.  We do not have any insurance to
cover the costs of defending this lawsuit, which costs may be material.

         To date,  Interactive and certain other  defendants have paid all legal
fees associated  with this action,  other than the fees we have paid and accrued
under the  indemnification  provisions of the agreement of the sale 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. While no
agreement  currently  exists on the  allocation  of such  legal  fees  among the
defendants,  some  costs  may be  allocated  to us. We are  currently  unable to
estimate  the amount of such costs and there is no accrual for such costs in the
accompanying financial statements

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.


                                       5
<PAGE>


                                                   Low         High
                                                   ----------- -----------
2005 Fiscal Year:
  First Quarter                                    $  .105     $   .13
  Second Quarter                                   $  .105     $   .11
  Third Quarter                                    $  .11      $   .13
  Fourth Quarter                                   $  .1125    $   .15



                                                   Low         High
                                                   ----------- -----------
2004 Fiscal Year:
  First Quarter                                    $  0.05     $  1.04
  Second Quarter                                   $  0.09     $  0.15
  Third Quarter                                    $  0.09     $  0.11
  Fourth Quarter                                   $  0.10     $  0.14

         As of March 10, 2006, there were approximately 740 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.

Sale of Licenses

         On December 31, 2003,  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.  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.  During 2004, we disposed of all equipment  related to providing
PCS  service and wound down our  Florida  operations.  Since the sale of our PCS
licenses and wind down of our Florida operations, the Company has no appreciable
operations other than maintenance status as a public company and, therefore,  is
no longer in the development stage.

         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, 2005, our net loss was approximately
$80,000 as  compared  to net loss of  approximately  $40,000  for the year ended
December 31, 2004.


                                       6
<PAGE>


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

         During  the  year  ended  December  31,  2004,  the  Company   recorded
approximately  $58,000 in  Expenses.  Such amount was  reduced by  approximately
$158,000 as a result of a negotiated  settlement of certain lease obligations of
the Company at less than their  recorded  liability  amount.  The  approximately
$158,000  represents the  difference  between the amount that was paid, in final
settlement, and the amount accrued by the Company on the date the leases were of
no further  use,  December  31,  2003.  Accordingly,  prior to the  reduction in
expenses  due to  the  settlement  of  the  lease  obligation  of  approximately
$158,000,  the  Company  incurred  expenses  of  approximately  $216,000,  which
primarily   consisted  of  accounting   and  legal  fees,  as  compared  to  the
approximately $100,000 of expenses incurred in 2005.

         Investment  income was  approximately  $19,000 in 2005;  as compared to
approximately   $18,000  in  2004  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, 2005, we had approximately $691,000 in cash as compared
to approximately $790,000 at December 31, 2004.

         On March 2, 2004, we declared a cash distribution of $0.83 per share on
our Class A common stock totaling  approximately $3.8 million. In addition,  the
Company  paid  approximately  $0.5  million  of accrued  Director  Compensation,
discussed above, and other accruals and expenses relating to the sale of the PCS
licenses to Cingular.

         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 "qui tam" lawsuit that
is  described  in Item 3, above.  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,"  the Company  recorded a liability of
$40,000 which  represented the Company's best estimate of the fair value of such
indemnification.

Recently Issued Accounting Pronouncements

     In June 2004,  the  Emerging  Issues  Task Force  ("EITF")  issued EITF No.
03-01,  "The Meaning of  Other-Than-Temporary  Impairment and its Application to
Certain  Investments".  EITF 03-01  includes  new guidance  for  evaluating  and
recording  impairment  losses  on debt and  equity  investments,  as well as new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  The provisions of EITF 03-01 were  initially  effective for reporting
periods  beginning after June 15, 2004,  while the disclosure  requirements  for
debt and equity securities accounted for under SFAS 115, "Accounting for Certain
Investments  in Debt and Equity  Securities",  are effective for annual  periods
ending  after  December  15,  2003.  In  September  2004,  the FASB  delayed the
effective date for the measurement and recognition  guidance of EITF 03-01.  The
Company will  evaluate the effect of adopting the  recognition  and  measurement
guidance when the final consensus is reached.

     In December  2004,  the FASB issued SFAS No.153,  "Exchanges of Nonmonetary
Assets",  which  eliminates the exception for  nonmonetary  exchanges of similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary  assets that do not have commercial  substance.  SFAS No.153 will be
effective for nonmonetary asset exchanges  occurring in fiscal periods beginning
after June 15,  2005.  The Company  does not believe the adoption of SFAS No.153
will have a material impact on its financial statements.


                                       7
<PAGE>


     In December 2004, the FASB issued SFAS  No.123(R),  "Share-Based  Payment",
which  establishes  standards for  transactions in which an entity exchanges its
equity instruments for goods or services. This standard requires a public entity
to measure the cost of employee  services  received in exchange  for an award of
equity  instruments  based  on the  grant-date  fair  value of the  award.  This
eliminates  the exception to account for such awards using the intrinsic  method
previously  allowable under APB Opinion No.25.  SFAS No.123(R) will be effective
in the first quarter of 2006.  The Company does not believe that the adoption of
SFAS  No.123(R)  will  have a  material  impact  on its  consolidated  financial
statements.

     In March 2005, the FASB issued FASB  Interpretation No. 47, "Accounting for
Conditional  Asset Retirement  Obligations"  ("FIN 47"). FIN 47 clarifies that a
conditional  asset  retirement  obligation,  as  used  in  FASB  Statement  143,
"Accounting for Asset Retirement  Obligations,"  refers to a legal obligation to
perform an asset  retirement  activity in which the timing  and/or method of the
settlement  are  conditional on a future event that may or may not be within the
control  of the  entity.  Accordingly,  an entity is  required  to  recognize  a
liability for the fair value of a conditional asset retirement obligation if the
fair  value can be  reasonably  estimated.  FIN 47 was  effective  no later than
fiscal years ending after December 15, 2005. The adoption of FIN 47 did not have
an impact on the Company's financial statements.

     In May 2005,  the FASB  issued  SFAS  154,  "Accounting  Changes  and Error
Corrections".  SFAS 154  eliminates  the  requirement  in APB  Opinion  No.  20,
"Accounting  Changes", to include the cumulative effect of changes in accounting
principle in the income statement in the period of change.  Instead,  to enhance
the comparability of prior period financial  statements,  SFAS 154 requires that
changes  in  accounting   principle  be  retrospectively   applied.   Under  the
retrospective  application,  the new  accounting  principle is applied as of the
beginning of the first period  presented  as if that  principle  had always been
used. Adoption of SFAS 154 is required for accounting changes and corrections of
errors made in the fiscal year  beginning  after  December 15, 2005. The Company
will adopt this new accounting standard on January 1, 2006.

Quantative and Qualitative Analysis of Market Risk

         The Company is  minimally  exposed to changes in market risk because as
of December 31, 2005 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................  9

Balance Sheets at December 31, 2005 and 2004...........................  10

Statements of Operations for the years ended
December 31, 2005 and 2004.............................................  11

Statement of Changes in Stockholders'
Equity for the years ended December 31, 2005 and 2004..................  12

Statements of Cash Flows for the years ended
December 31, 2005 and 2004.............................................  13

Notes to Financial Statements..........................................  14-20


                                       8
<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 sheet of Sunshine PCS Corporation
(the  "Company")  as  of  December  31,  2004  and  the  related  statements  of
operations,  stockholders'  equity and cash flows for the year 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. 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,
2004 and the  results of its  operations  and its cash flows for the period then
ended in conformity with accounting  principles generally accepted in the United
States of America.

/s/ DELOITTE & TOUCHE LLP
-------------------------

New York, New York
March 31, 2005



             Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders
Sunshine PCS Corporation

     We have audited the accompanying  balance sheet of Sunshine PCS Corporation
as of December 31, 2005, and the related  statements of  operations,  changes in
stockholders'  equity and cash flows for the year 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 audits.

     We  conducted  our audit in  accordance  with the  standards  of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining  on a  test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  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 audit provides 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 Sunshine PCS Corporation at
December 31, 2005, and the results of their  operations and their cash flows for
the year then ended in conformity with accounting  principles generally accepted
in the United States of America.

/s/ Daszkal Bolton LLP
----------------------

Boca Raton, Florida
March 4, 2006, except for Note 8, which is dated March 20, 2006.


                                       9
<PAGE>


                            Sunshine PCS Corporation
                                 Balance Sheets
                        As of December 31, 2005 and 2004


<TABLE>


                                                                                      2005                2004
<S>                                                                             <C>                 <C>

Assets

Cash and cash equivalents...................................................     $       691,920   $        790,406
Other Assets...............................................................               4,842             6,093
                                                                                ---------------- -----------------
  Total Assets.............................................................      $       696,762   $        796,499
                                                                                ================ =================

Liabilities and stockholders' equity

Liabilities

Accounts payable and accrued expenses......................................      $       111,100   $        132,291

Stockholders' equity

Contingencies and commitments

Class A:  no par value Authorized shares-20,000,000; 4,588,653
shares issued and outstanding at December 31, 2005 and 2004.....................     --                  --
Class B:  no par value Authorized shares-9,000,000; no shares
outstanding at December 31, 2005 and 2004......................................      --                  --
Additional paid-in capital.................................................          80,514,012       80,514,012
Accumulated deficit .......................................................        (79,928,350)     (79,849,804)
                                                                                ---------------- ----------------
  Stockholders' equity.....................................................             585,662          664,208
                                                                                ---------------- ----------------
  Total liabilities and stockholders' equity...............................         $   696,762      $   796,499
                                                                                ================ ================
</TABLE>


See accompanying notes to financial statements.


                                       10
<PAGE>


                            Sunshine PCS Corporation
                            Statements of Operations
                 For the Years Ended December 31, 2005 and 2004



                                                2005                2004

Interest income.....................           $     19,692       $      18,070
Expenses:
    Professional Fees...............               (38,064)           (185,560)
    General and administrative expenses            (62,064)            (30,645)
    Reversal of lease liability                         - -             157,776
                                         ------------------- -------------------
        Total expenses                            (100,098)            (58,429)
                                         ------------------- -------------------
Net loss............................               (80,406)            (40,359)
                                         ------------------- -------------------
Basic and diluted loss per common share         $    (0.02)        $     (0.01)
                                         =================== ===================
Weighted average shares used in basic
computation.........................              4,588,653           4,588,653
                                         =================== ===================

See accompanying notes to financial statements











                                       11
<PAGE>


                            Sunshine PCS Corporation
                        Statement of Stockholders' Equity
                 For the Years Ended December 31, 2005 and 2004

<TABLE>

                                                                              Additional
                          Shares of Common Stock                                paid-in       Accumulated   Stockholders'
                                Outstanding              Common stock           capital         deficit         equity
                         --------------------------  ----------------------  -------------   -------------   ---------------
                           Class A      Class B       Class A     Class B
                         ------------  ------------  ----------  ----------  -------------   -------------   ---------------
<S>                       <C>           <C>          <C>        <C>           <C>           <C>                <C>


Balance at January 1,
2004                       4,588,653           --       $ --       $ --        $80,496,506   $(75,998,132)      $ 4,498,374
Cash distribution to                                                                    --     (3,811,313)      (3,811,313)
Stockholders
Net loss                                                                                --        (40,359)         (40,359)
Stock based
compensation                                                                        17,506              --           17,506
                         ------------  ------------  ----------  ----------   ------------   -------------   ---------------
Balance at December
31, 2004                   4,588,653           --         --         --         80,514,012    (79,849,804)          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
                         ============  ============  ==========  ===========  =============  ==============  ===============

</TABLE>

         See accompanying notes to financial statement


                                       12
<PAGE>


                            Sunshine PCS Corporation
                            Statements of Cash Flows
                 For the Years ended December 31, 2005 and 2004

                                              2005               2004
                                         ---------------- -------------------
Operating activities
Net loss................................  $     (80,406)   $      (40,359)
Adjustments to reconcile net loss to
cash used in operating activities:
Stock based compensation ...............
                                                     --              17,506
Decrease in accounts payable and
accrued expenses........................        (21,191)        (1,091,858)
Decrease (increase) in other assets                1,251            (6,093)
                                         ---------------- -------------------
Net cash used in operating
activities..............................       (100,346)        (1,120,804)

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

Financing activities
Cash distribution to Stockholders                    --         (3,811,313)
Return of excess cash distribution to
Stockholders                                       1,860                 --
                                         ---------------- -------------------
Net cash provided by (used in)
financing activities....................           1,860         (3,811,313)
                                         ---------------- -------------------

Net change in cash......................        (98,486)         (4,932,117)
Cash and cash equivalents at
beginning of year.......................         790,406           5,722,523
                                         ---------------- -------------------
Cash and cash equivalents at end of
year....................................        $691,920            $790,406
                                         ================ ===================

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


See accompanying notes to financial statements


                                       13
<PAGE>


                            Sunshine PCS Corporation
                          Notes to Financial Statements

                                December 31, 2005

1.  Background

         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,   we  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,"  the Company  recorded a liability of
$40,000 which  represented the Company's best estimate of the fair value of such
indemnification.

         The  sale   required  the   approval  by  the   Sunshine   shareholders
representing  a majority of the voting  power of all  outstanding  shares.  Such
approval was obtained on September 10, 2003,  by consent of  Sunshine's  Class B
shareholder.  In addition,  completion of the sale was subject to the consent of
the Federal Communications Commission to the assignment of the licenses.

         In  connection  with the Sale  Agreement,  Sunshine  agreed  with Lynch
Interactive Corporation,  which owned all of the outstanding shares of the three
series of Preferred  Stock of Sunshine,  to acquire  those shares for a total of
approximately  $7.2  million.  Sunshine  also has reached an agreement  with the
holder of its 3,069,313  shares of Class B Common Stock to reacquire such shares
for $.20 per share,  for a total of $0.6 million.  The  acquisition  of both the
Preferred  Stock and Class B Common Stock were  contingent  upon the closing and
sale of the licenses to Cingular and the  acquisition  was also  consummated  on
December 31, 2003. The closing of these  transactions  also occurred on December
31, 2003. In addition,  on that date,  Sunshine purchased all of our outstanding
warrants to purchase  4.3 million  shares of Class A common stock for a total of
$0.4 million.  With regard to the remaining sale proceeds,  on March 2, 2004, we
declared a distribution  of $0.83 per share on our Class A common stock totaling
$3.8 million,  we are in the process of evaluating all of its  alternatives  and
will consider all options with regard to their potential use.  Sunshine's system
equipment,  which had a current net book value after accumulated depreciation of
$654,000 at the time of the  consummation  of the sale agreement was not part of
the Sale  Agreement  and was not  being  used  under  the  Operating  Agreement.
Accordingly,  considering  that  Sunshine  would  have  no  further  use for the
equipment  and believed  that this  equipment  would have  minimal  value on the
resale  market  and all such  equipment  was  written  off during the year ended
December 31, 2003.

         On receipt of the FCC  approval,  all of our three classes of preferred
stock became mandatorily redeemable and, under SFAS 150, "Accounting for Certain
Financial  Instruments  with  Characteristics  of Both  Liabilities and Equity,"
therefore,  a liability of the Company.  Because of the related  party nature of


                                       14
<PAGE>


this  transaction,  the  difference  between the carrying value of the preferred
stock and the amount paid was  recorded as an  increase  to  additional  paid in
capital.

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

         The  Company  considers  highly  liquid  investments  with an  original
maturity  of  less  than  three  months  as  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.

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 2005 and 2004, balances in these accounts never exceeded $100,000.

         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  $680,000 and $780,000 at December 31, 2005 and
2004, respectively.

Equipment

            Equipment   was   recorded  at  cost  and   depreciated   using  the
straight-line  method based upon an estimated  useful life of seven years. As of
December 31, 2003, the Company sold its PCS licensing and recorded a reserve for
impairment of the  equipment as it was no longer  useable and the cost to remove
was deemed to be greater than its market  value.  The  equipment was disposed of
during 2004.

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.


                                       15
<PAGE>


Stock Options

         The Company  accounts for stock options  issued to directors  under the
provisions of APB 25 "Accounting Stock Issued to Employees" and consequently the
Company recognized no expense as the options were issued above their fair market
value at the date of the grant.  If these  options had been  accounted for under
the provisions of FAS 123 "Accounting for  Stock-Based  Compensation"  utilizing
the  Black-Scholes  Option Pricing Model as the way to calculate the fair market
value, the effect Net Loss for the years ending December 31, 2005 and 2004 would
have been as follows:

                                                     2005               2004
                                                -------------       ------------
  Net loss as reported.........                 $    (80,406)        $ (40,359)
  Add (deduct):
  Total stock-based employee compensation
  (expense) income determined under fair
  value based method for all awards                      - -            (1,233)
                                               --------------       ------------
  Pro forma net loss...........                      (80,406)          (41,592)
                                               ==============       ============
  Basic and diluted loss per common share:
  As reported:
  Basic........................                 $    (0.02)         $     (0.01)
  Diluted......................                 $    (0.02)         $     (0.01)
  Pro forma:
  Basic........................                 $    (0.02)         $     (0.01)
  Diluted......................                 $    (0.02)         $     (0.01)


Recently Issued Accounting Pronouncements

     In June 2004,  the  Emerging  Issues  Task Force  ("EITF")  issued EITF No.
03-01,  "The Meaning of  Other-Than-Temporary  Impairment and its Application to
Certain  Investments".  EITF 03-01  includes  new guidance  for  evaluating  and
recording  impairment  losses  on debt and  equity  investments,  as well as new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  The provisions of EITF 03-01 were  initially  effective for reporting
periods  beginning after June 15, 2004,  while the disclosure  requirements  for
debt and equity securities accounted for under SFAS 115, "Accounting for Certain
Investments  in Debt and Equity  Securities",  are effective for annual  periods
ending  after  December  15,  2003.  In  September  2004,  the FASB  delayed the
effective date for the measurement and recognition  guidance of EITF 03-01.  The
Company will  evaluate the effect of adopting the  recognition  and  measurement
guidance when the final consensus is reached.

     In December  2004,  the FASB issued SFAS No.153,  "Exchanges of Nonmonetary
Assets",  which  eliminates the exception for  nonmonetary  exchanges of similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary  assets that do not have commercial  substance.  SFAS No.153 will be
effective for nonmonetary asset exchanges  occurring in fiscal periods beginning
after June 15,  2005.  The Company  does not believe the adoption of SFAS No.153
will have a material impact on its financial statements.

     In December 2004, the FASB issued SFAS  No.123(R),  "Share-Based  Payment",
which  establishes  standards for  transactions in which an entity exchanges its
equity instruments for goods or services. This standard requires a public entity
to measure the cost of employee  services  received in exchange  for an award of
equity  instruments  based  on the  grant-date  fair  value of the  award.  This
eliminates  the exception to account for such awards using the intrinsic  method


                                       16
<PAGE>


previously  allowable under APB Opinion No.25.  SFAS No.123(R) will be effective
in the first quarter of 2006.  The Company does not believe that the adoption of
SFAS  No.123(R)  will  have a  material  impact  on its  consolidated  financial
statements.

     In March 2005, the FASB issued FASB  Interpretation No. 47, "Accounting for
Conditional  Asset Retirement  Obligations"  ("FIN 47"). FIN 47 clarifies that a
conditional  asset  retirement  obligation,  as  used  in  FASB  Statement  143,
"Accounting for Asset Retirement  Obligations,"  refers to a legal obligation to
perform an asset  retirement  activity in which the timing  and/or method of the
settlement  are  conditional on a future event that may or may not be within the
control  of the  entity.  Accordingly,  an entity is  required  to  recognize  a
liability for the fair value of a conditional asset retirement obligation if the
fair  value can be  reasonably  estimated.  FIN 47 was  effective  no later than
fiscal years ending after December 15, 2005. The adoption of FIN 47 did not have
an impact on the Company's financial statements.

     In May 2005,  the FASB  issued  SFAS  154,  "Accounting  Changes  and Error
Corrections".  SFAS 154  eliminates  the  requirement  in APB  Opinion  No.  20,
"Accounting  Changes", to include the cumulative effect of changes in accounting
principle in the income statement in the period of change.  Instead,  to enhance
the comparability of prior period financial  statements,  SFAS 154 requires that
changes  in  accounting   principle  be  retrospectively   applied.   Under  the
retrospective  application,  the new  accounting  principle is applied as of the
beginning of the first period  presented  as if that  principle  had always been
used. Adoption of SFAS 154 is required for accounting changes and corrections of
errors made in the fiscal year  beginning  after  December 15, 2005. The Company
will adopt this new accounting standard on January 1, 2006.

3.       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, 2005 and 2004 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 2005, expiring in the years 2021 through 2025. In addition,  the Company
has  approximately  $4.9  million of state net  operating  loss  carry  forwards
expiring in the years 2021 through 2024. Pursuant to Sections 382 and 383 of the
Internal Revenue Code, annual use of any of the Company's net operation loss and
credit carry forwards may be limited if cumulative  changes in ownership of more
than 50% occur during any three year period.

         Cumulative  temporary  differences  at December 31, 2005 and 2004 are
as follows (amounts rounded):

                                       December 31, 2005       December 31, 2004
                                       --------------------   ------------------
Deferred tax assets:
Net operating losses................   $       1,399,000      $       1,369,000
Other...............................           107,000                  107,000
                                       --------------------   ------------------
                                              1,506,000               1,476,000
Valuation allowance.................        (1,506,000)             (1,476,000)
                                       $               -       $              -
                                       ====================  ===================


                                       17
<PAGE>


         Income tax provision  (benefit)  for the years ended  December 31, 2005
and 2004, is comprised of (amounts rounded):

                                      2005                   2004
                                 -----------------      ---------------
Current income tax benefit                     --                  --
Deferred income tax benefit             ($30,000)           ($23,000)
Valuation allowance                        30,000              23,000
                                 -----------------      ---------------
  Income tax benefit                 $         --         $        --
                                 =================      ===============


         The reconciliation of the provision  (benefit) for income taxes for the
years ended December 31, 2005 and 2004, and the amount  computed by applying the
statutory federal income tax rate to net loss is as follows (amounts rounded):

                                                       2005               2004
                                                    -----------       ----------
Tax benefit provision at statutory rate ......      $  (27,000)      $ (14,000)
State taxes, net of federal benefit...........          (3,000)         (1,000)
Increase in valuation allowance...............           30,000          23,000
Other                                                                   (8,000)
                                                    -----------       ----------
                                                    $       --       $      --

                                                    ===========      ===========

4.  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.

5.  Management Services Agreement

         As of May 1, 2001,  the Company  entered  into an  agreement  with Gray
Florida  Holdings Inc., dba GrayLink  Wireless,  Inc. (whose  President,  Robert
Chomat,  served 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 $200,000 for services rendered in 2002. As of
January 1, 2003, the fees were reduced to $25,000 and a $100,000  payment upon a
liquidity  event, due to a lower level of required  service.  As of December 31,
2003, the Company had an amount payable of $242,000 under this agreement,  which
it paid in full in 2004.

6.  Lease Commitment

         The Company had entered  into  leases  covering  antenna  space on four
towers  (total  rental  expenses  for the year  ended  December  31,  2003,  was
$110,401). The leases called for monthly payments totaling $9,280 per month. The
leases had a minimum  term of five years and were  subject to annual  escalation


                                       18
<PAGE>


clauses.  As of  December  31,  2003,  the  Company had no further use for these
leases and accrued the  $303,000  remaining  liability  under the lease.  During
2004, the Company negotiated a full settlement of all of their lease obligations
and the difference between the liability recorded of $303,000 and its settlement
amount paid during  2004,  was  recorded as a reduction  of expenses of $158,000
during the year ending December 31, 2004.

7.       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.

         As of May 1,  2001,  Sunshine  granted to its Chief  Operating  Officer
options  to  purchase  306,819  shares of its Class A common  stock at $1.50 per
share.  Fifty percent of such options vested on Sunshine's meeting its first FCC
mandated  build-out  requirement,  which  occurred on August 31,  2001,  and the
remaining  50% vested on the sale of the licenses.  In 2004,  these options were
cancelled.

         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  expires in five  years,  January  18,
2007.

8.       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,  have  been  named as
defendants in a lawsuit  brought 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  was filed under seal with the court in February  2001,
and the seal was lifted in January  2002.  Under the False Claims Act, a private
plaintiff,  termed a "relator," may file a civil action on the U.S. government's
behalf  against  another  party for  violation  of the statute.  In return,  the
relator receives a statutory bounty from the government's litigation proceeds if
he is successful.

         The main allegation in the case is that the defendants  participated in
the creation of "sham"  bidding  entities that  allegedly  defrauded the federal
Treasury  by  improperly   participating   in  certain  Federal   Communications
Commission  spectrum  auctions  restricted  to  small  businesses,  as  well  as
obtaining  bidding credits in other spectrum  auctions  allocated to "small" and
"very small"  businesses.  While the complaint  seeks to recover an  unspecified
amount of  damages,  which  would be subject  to  mandatory  trebling  under the
statute,  a report  prepared for the relator in February 2005 alleges damages of
approximately  $91  million in respect of  bidding  credits,  approximately  $70
million in respect of government loans and approximately $206 million in respect
of subsequent resale of licenses, in each case prior to trebling.

         We were formally  served with the complaint in July 2002. At that time,
the U.S.  Department  of Justice  notified  the court that it was  declining  to
intervene  in the case.  In September  2002,  we joined  Lynch  Interactive  and
certain other  defendants in filing two motions with the United States  District
Court for the District of Columbia: a motion to dismiss the lawsuit and a motion
to transfer the action to the Southern  District of New York.  On September  30,
2003, the Court granted our motion to transfer the action.


                                       19
<PAGE>


         In December 2004,  the  defendants  filed a motion in the United States
District Court for the District of Columbia to compel the FCC to provide certain
information  subpoenaed  by  defendants in order to enable them to conduct their
defense. This motion was denied in May 2005 and defendants appealed. In February
2006,  the  defendants  and the FCC  reached an  agreement  granting  defendants
discovery  of  certain  documents  and  other  evidentiary  materials.   Factual
discovery against defendants is substantially  complete and both relator and the
defendants have moved for summary judgment on a variety of grounds.  In November
2005, with respect to one such motion for partial summary judgment, on the issue
of damages  based on resale of licenses,  the court ruled that such damages were
not permissible.

   On March 7, 2006,  the U.S.  Department  of Justice  petitioned  the court to
allow it to intervene in the case. On March 8, 2006,  the court allowed the U.S.
Department of Justice to file a motion  supporting  its  petition.  On March 20,
2006,  the U.S.  Department of Justice filed the motion and their  complaint and
oral arguments are scheduled for April 19, 2006.  The case had been  tentatively
scheduled  for  trial  in June  2006 but the  trial  may be  delayed  due to the
government's request for intervention and related issues.

         We strongly  believe that this lawsuit is completely  without merit and
that relator's damage computation is without basis, and are intend to vigorously
defending the suit. Nevertheless,  we cannot predict the ultimate outcome of the
litigation,  nor can we predict the effect that the lawsuit or its outcome  will
have on our business or plan of operation. We do not have any insurance to cover
the costs of defending this lawsuit, which costs may be material.

         To date,  Interactive and certain other  defendants have paid all legal
fees associated  with this action,  other than the fees we have paid and accrued
under the  indemnification  provisions of the agreement of the sale 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. While no
agreement  currently  exists on the  allocation  of such  legal  fees  among the
defendants, some costs may be allocated to the Company. The Company is currently
unable to  estimate  the amount of such  costs and there is no accrual  for such
costs in the accompanying financial statements.

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

         See our Current Report on Form 8-K filed on January 27, 2006.

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

Item 8A.  Controls and Procedures

         (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.


                                       20
<PAGE>


         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.


                                       21
<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, 2006 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                    59                      Class B director(1)
  Robert E.  Dolan                 54                      Class A director(1)
                                                           and Assistant
                                                           Secretary

(1) The Class B  directors  together  have three votes and the Class A directors
together have two votes.

     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

         The following  table sets forth all  compensation  awarded to our Chief
Executive  Officer  during the fiscal year ended  December  31,  2003.  No other
executive officer received compensation in excess of $100,000 during fiscal year
2004 and 2005.


<TABLE>

                                                          Annual Compensation
                                  ---------------------------------------------------------------------------

                                                                                              Other Annual
Name and Principal Position           Year        Salary ($)            Bonus ($)         Compensation ($)(1)
----------------------------      ----------   --------------      ----------------     -----------------------
<S>                               <C>           <C>                <C>                     <C>

David S. Ahl                          2003            --                $150,000                   --
      Chief Executive Officer

 Karen E. Johnson                     2003            --                $300,000                   --
     Chief Executive Officer(2)

(1)  Perquisites  and other  personal  benefits,  securities or property to each
     executive  officer  did not  exceed  the  lesser of  $50,000 or 10% of such
     executive's salary and bonus.

(2)  Resigned June 17, 2004

</TABLE>


                                       22
<PAGE>


Options Outstanding

         We did not grant any stock  options for fiscal year ended  December 31,
2005.  During As  compensation  for their  services  as  members of the Board of
Directors,  in February  2001 each Board member was granted  options to purchase
50,000  shares of Class A common  stock at an exercise  price of $.75 per share.
These options are exercisable in full  commencing  February 14, 2004 and expired
on February 13, 2006.

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, 2006 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.


                                                        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         *

*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.


                                       23
<PAGE>


(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.






                                       24
<PAGE>


Item 12.  Certain Relationships and Related Transactions

         Fortunet  Communications,  L.P., a limited  partnership,  was formed in
1997. In 1997, Fortunet Communications,  L.P. succeeded to all of the assets and
liabilities  of the five  partnerships  that had won 31 personal  communications
service  licenses in the Federal  Communications  Commission's  C-Block auction.
After the succession, the 50.1% general partner of Fortunet Communications, L.P.
was Fortunet Wireless Communications  Corporation, of which 60% of the stock was
owned by Victoria G. Kane.  Lynch PCS  Corporation,  an indirect  subsidiary  of
Lynch  Interactive  Corporation,   was  a  49.9%  limited  partner  of  Fortunet
Communications,  L.P. These original partners invested $600,000 in the equity of
the partnerships and Lynch Interactive  Corporation invested a combined $597,604
as equity in the  partnerships.  Lynch  Interactive  Corporation also loaned the
five  partnerships a combined $24.9 million,  primarily for down payments and to
service  installment  interest  payments  on  personal   communications  service
licenses won in the C-Block auction. Fortunet Communications, L.P. received back
$3.9 million from the Federal  Communications  Commission  in 1999 in connection
with the  surrender  of 28 of its  licenses,  which  was then used to pay down a
portion of the Lynch  Interactive  Corporation  loan.  At February 14, 2001 (the
date of our  restructuring  - See Below),  our  indebtedness  of $85,096,724 was
composed of net cash loans of $21,007,134,  accrued interest of $20,696,280, and
accrued commitment fees of $43,393,310. Interest has accrued on the cash loaned,
compounded annually,  at a rate of 15% per annum.  Commitment fees were based on
the total funds committed by a subsidiary of Lynch Interactive Corporation,  $42
million,  at 20% per annum.  No  interest or  commitment  fees have been paid to
date.

         On May 4, 2000,  Ms.  Kane  purchased  the  remaining  40% of  Fortunet
Wireless Communications  Corporation not owned by her for $600,000, and gave the
selling  stockholders the right to repurchase that stock through May 4, 2008 for
120% of her purchase  price.  One of these  selling  stockholders  was our Chief
Executive Officer, Karen E. Johnson. Under this arrangement, Ms. Johnson has the
right to  repurchase up to 4.167% of our  outstanding  Class B common stock from
Ms. Kane,  through May 4, 2008, for 120% of the value Ms. Kane  previously  paid
for Ms. Johnson's stock on May 4, 2000.

         We were  incorporated  on July 13,  2000,  and on  February  14,  2001,
succeeded to the rights and obligations of Fortunet Communications, L.P. At that
time, Fortunet Wireless Communications  Corporation received 2,833,076 shares of
our Class B common stock and Lynch Interactive  Corporation  received  2,821,766
shares  of  our  Class  A  common  stock.  Lynch  Interactive  Corporation  then
distributed our Class A common stock to its stockholders.

         As a part of the reorganization of Fortunet Communications, L.P., Lynch
Interactive  Corporation  made a capital  contribution to us of $63.9 million of
the indebtedness of Fortunet Communications,  L.P. The remaining indebtedness of
Fortunet  Communications,  L.P. to Lynch  Interactive  Corporation was converted
into $16.1 million  principal  amount of  transferable  subordinated  notes.  In
addition,  Lynch  Interactive  Corporation  made a cash  payment of  $250,000 in
exchange for our preferred stock with a liquidation  preference of $10.0 million
and  warrants to purchase  4,300,000  shares of Class A common stock at $.75 per
share.

            We also separately  issued 235,294 shares of Class A common stock to
Lynch  Interactive  Corporation  and 236,237  shares of Class B common  stock to
Fortunet Wireless Communication Corporation.

         In November 2002, the Company  exchanged the $18.8 million  outstanding
principal amount of its subordinated notes held by Lynch Interactive Corporation
for two series of preferred stock having an aggregate liquidation value of $14.5
million.  The Company issued 12,500 shares of Series A-1 preferred stock,  which
has a total liquidation  value of $12.5 million,  and 2,000 shares of Series A-2
convertible  preferred stock,  which has a liquidation value of $2.0 million and
is convertible  into two million  shares of the Company's  Class A Common Stock.


                                       25
<PAGE>


These two series of preferred  stock pay no dividends  and are  redeemable  upon
certain  triggering  events,  including  a  change  of  control  or  sale of our
licenses.

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

         As of May 1,  2001,  we entered  into an  agreement  with Gray  Florida
Holdings Inc., d/b/a GrayLink  Wireless,  Inc., whose President,  Robert Chomat,
serves as our Chief Operating Officer,  to provide us with management  services.
The agreement  calls for payment of $125,000 for services  rendered  during 2001
and not less than $200,000 for services rendered in 2002. As of January 1, 2003,
this  agreement was amended and calls for an annual  current  payment of $25,000
and $100,000 payment upon a liquidity event.

         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)


                                       26
<PAGE>


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

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  Deloitte  & Touche  for  professional
services  rendered for the audit of the Company's 2004 financial  statements was
$26,500 and the estimate  aggregate fees to Daszkal Bolton LLP for  professional
fees  rendered  for the audit of the  Company's  2005  financial  statements  is
$17,500.  The  aggregate  fees  billed by  Deloitte  & Touche  for  professional
services rendered for their review of the financial  statements  included in the
Company's Forms 10-Q was $18,600 for 2005 and $16,250 for 2004.

Audit-Related Fees

         The aggregate  fees billed by Daszkal  Bolton LLP and Deloitte & Touche
for assurance and related services for 2005 and 2004 that are reasonably related
to the  performance  of the  audit of the  Company's  2005  and  2004  financial
statements  and not  reported as audit fees above was $2,500 for Daszkal  Bolton
LLP in 2005 and $0 for Deloitte & Touche in 2004.

Tax Fees


         No fees were billed by Daszkal Bolton LLP or Deloitte & Touche for 2005
or 2004 The aggregate fees billed by Deloitte & Touche for tax  compliance,  tax
advice, and tax planning.

All Other Fees

     No fees were billed by Daszkal  Bolton LLP or Deloitte & Touche for 2005 or
2004 for services other than as set forth above.


                                       27
<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  2005 and 2004,  the Board of  Directors
considered  that the provisions of all non-audit  services were  compatible with
maintaining the independence of its independent auditor.


                                       28
<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 31st day of March, 2006.

                                                    SUNSHINE PCS CORPORATION


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


         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, Chief       March 31, 2006
  -------------------        Executive Officer
   David S. Ahl

  /s/ Robert E. Dolan        Director and Assistant Secretary   March 31, 2006
  -------------------
  Robert E. Dolan





                                       29