**UNITED
          STATES**
 **SECURITIES
          AND EXCHANGE COMMISSION**
 Washington,
          D.C. 20549
 
 **Form
          10-KSB**
 
 **ý** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15( d ) OF THE SECURITIES EXCHANGE
          ACT
          OF 1934**
 
 **** For the
          fiscal year ended December 31, 2006
 
 Commission
          File Number 0-19170
  
 JUNIPER
            GROUP, INC.
 ( Name
            of small business issuer in its charter )
 
 Nevada     
                                                                    
                           11-2866771
                    (State
                      or other jurisdiction of  Incorporation  or
                      organization)                     
                           (IRS Employer Identification
                      No.)
 20283
            State Road 7 Suite
            400
 Boca
            Raton, Florida, 33498
 (Address
            of principal executive offices) (561)
            482-9327
 (Registrant's
            telephone number, including area code)
 
 Securities
            registered pursuant to Section 12(b) of the Exchange Act: NONE
 Securities
            registered pursuant to Section 12(g) of the Exchange Act
 
 Title
            of
            Each Class
 -------------------------------------------------------------------
 Common
            Stock (par value $.001 per share)
 12%
            Non-Voting Convertible Redeemable Preferred Stock $0.10 par value
 Voting
            Convertible Redeemable Series B Preferred Stock $0.10 par value
 Voting
            Convertible Redeemable Series C Preferred Stock $0.10 par value
 Voting
            Non-Convertible Series D Preferred Stock $0.10 par value
 
 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 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
            disclosure of delinquent filers in response to Item 405 of Resolution
            S-B is not
            contained in this form, and no disclosure will be contained, to the best
            of
            Registrant’s knowledge, in definitive proxy or information statements
            incorporated by reference in Part III of this Form 10-KSB or any amendment
            to
            this Form 10-KSB [X]
 
 Indicate
            by check mark whether the Registrant is a shell company (as defined in
            Rule
            126.2) of the Exchange Act: Yes______ No__ X ___
 
 State’s
            issuer’s revenues for its most recent fiscal year. - $ 4,680,893
 
 The
            aggregate market value of the Common Stock held by non-affiliates of
            the
            Registrant was approximately $360,000 based upon the $0.027 average bid
            price of
            these shares on the OTC Bulletin Board for the period February 1. 2007
            through
            February 27, 2007.
 
 As
            of
            February 27, 2007, there were 15,670,122 outstanding shares of our Common
            Stock,
            $.001 par value per share.
   1
 
  
 **CAUTIONARY
            STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE
            PRIVATE**
 **SECURITIES
            LITIGATION REFORM ACT OF 1995**
 
 **THIS
            ANNUAL REPORT ON FORM 10-KSB AND THE INFORMATION INCORPORATED BY REFERENCE
            MAY
            INCLUDE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A
            OF THE
            SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. THE COMPANY INTENDS
            THE
            FORWARD-LOOKING STATEMENTS TO BE COVERED BY THE SAFE HARBOR PROVISIONS
            FOR
            FORWARD-LOOKING STATEMENTS. ALL STATEMENTS REGARDING THE COMPANY'S EXPECTED
            FINANCIAL POSITION AND OPERATING RESULTS, ITS BUSINESS STRATEGY, ITS
            FINANCING
            PLANS AND THE OUTCOME OF ANY CONTINGENCIES ARE FORWARD-LOOKING STATEMENTS.
            THE
            FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT ESTIMATES AND PROJECTIONS
            ABOUT
            OUR INDUSTRY AND OUR BUSINESS. WORDS SUCH AS "ANTICIPATES," "EXPECTS,"
            "INTENDS," "PLANS," "BELIEVES," "SEEKS," "ESTIMATES," VARIATIONS OF SUCH
            WORDS
            AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING
            STATEMENTS. THE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND
            UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
            THOSE
            SET FORTH OR IMPLIED BY ANY FORWARD LOOKING STATEMENTS. THE COMPANY ASSUMES
            NO
            OBLIGATION TO UPDATE PUBLICLY THE FORWARD-LOOKING STATEMENTS CONTAINED
            HEREIN,
            WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT
            AS
            MAY BE REQUIRED BY LAW.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 2
  **INDEX**
 
 **PART
                        I**ITEM
                        1.
                    Description
                        of Business
                    
                    3ITEM
                        1A.
                    Risk
                        Factors
                    
                    6ITEM
                        2.
                    Description
                        of Properties
                    
                    14ITEM
                        3.
                    Legal
                        Proceedings
                    
                    14ITEM
                        4.
                    Submission
                        of Matters to a Vote of Security
                        Holders
                    
                    14**PART
                        II**ITEM
                        5.
                    Market
                        for Common Equity, Related Stockholder Matters and
                        Small Business Issuer Purchases of Equity Securities
                    
                    15ITEM
                        6.
                    Management's
                        Discussion and Analysis or Plan of
                        Operation
                    
                    16ITEM
                        7.
                    Consolidated
                        Financial Statements
                    
                    24ITEM
                        8.
                    Changes
                        in and Disagreements with Accountants on
                        Accounting and Financial Disclosure
                    
                    24ITEM
                        8a
                    Controls
                        and Procedures
                    
                    25**PART
                        III**ITEM
                        9.
                    Directors,
                        Executive Officers, Promoters and Control Persons, Compliance
                        withSection
                        16(a) of the Exchange Act
                    
                    25ITEM
                        10.
                    Executive
                        Compensation
                    
                    26ITEM
                        11.
                    SeSecurity
                        Ownership of Certain Beneficial Owners and
                        Management and Related Stockholder Matters
                    
                    29ITEM
                        12.
                    Certain
                        Relationships and Related
                        Transactions
                    
                    29**PART
                        IV**ITEM
                        13.
                    Exhibits
                        and Reports on Form 8-K
                    
                    30ITEM
                        14.
                    Principal
                        Accountant Fees and
                        Services
                    
                    31Signatures
                    
                    F-25
 
 **PART
            I**
 
 **ITEM
            1. DESCRIPTION OF BUSINESS**
 
 **General**
 
 Juniper
            Group, Inc. is a holding company. The terms “we”, “our”, “us”, “the Company” and
“management” as used herein refers to Juniper Group, Inc. and its subsidiaries
            unless the context otherwise requires.
 
 We
            were
            incorporated in the State of Nevada in 1997 and conduct our business
            through
            indirect wholly-owned subsidiaries. Our business is composed of two segments:
 
 1.  Broadband
            Installation and Wireless Infrastructure Services:
 
 Our
            broadband installation and wireless infrastructure operations are conducted
            through one wholly owned subsidiary of Juniper Entertainment, Inc.
 
 2.  Film
            Distribution Services:
 
 Our
            film
            distribution operations are conducted through one wholly owned subsidiary
            of
            Juniper Entertainment, Inc.
 
 Both
            of
            these services are operated through two indirect wholly owned subsidiaries,
            which are subsidiaries of Juniper Entertainment, Inc. our wholly owned
            subsidiary.
 
 **BROADBAND
            INSTALLATION AND WIRELESS INFRASTRUCTURE SERVICES:**
 
 Our
            broadband installation and wireless infrastructure services are conducted
            through Juniper Services, Inc. (“Services”).  Services operates on a
            regional basis under a new business model and with new management and
            new
            staff. Our focus in 2006 has been on the expansion and investment in its
            wireless infrastructure services and we have completed an acquisition
            primarily
            related to the infrastructure services offering an increased array of
            services. Our direction is to support the increased demand in the
            deployment of wireless/tower system services with leading telecommunication
            companies in providing them with maintenance and upgrading of wireless
            telecommunications sites; site surveys, co-location facilitation, tower
            construction and antenna installation to tower system integration, hardware
            and
            software installations.
 
  **MATERIAL
            ACQUISITIONS**
  On
            March
            16, 2006, Juniper Services completed the acquisition of all outstanding
            shares
            of New Wave Communication, Inc., making it a wholly owned subsidiary
            of Juniper
            Services.
  New
            Wave
            is a wireless communications contractor in the Mid-West, specializing
            in tower
            erection, extension, modifications and maintenance, as well as cellular,
            wireless broadband and microwave systems installation. We service the
            wireless
            providers primarily in Eastern Illinois, all of Indiana, and Western
            Ohio, but
            we are capable of sustained work anywhere within the United States. New
            Wave is
            providing services to Cingular Wireless/AT&T, Sprint/Nextel, Verizon,
            T-Mobile, Cricket , Revol, Crown Castle USA, Inc. and and Bechtel  Corp.
            This will bring our broadband focus into a wireless market through voice
            data
            and streaming video.
   3
  **General
            Description of Broadband and Wireless Telecommunication
            Industry**
  As
            the
            broadband and wireless telecommunication companies are looking to reposition
            into an all-in-one service provider, we believe that they will be providing
            bundle service that includes data, voice and video.
  The
            US
            broadband market reached an important inflection point in late 2004 and
            early
            2005 when the number of broadband Internet users overtook dial-up users
            for the
            first time. ABI Research estimates that there will be over 480 million
            broadband
            users in the U.S. by 2012.
 
 Rising
            broadband penetration is contributing to e-commerce growth, helping transform
            the Web into a truly multimedia environment and making new Internet services
            such as VoIP telephony a reality. The implications and opportunities
            for online
            advertising and marketing are extensive. The major attractions for broadband
            customers of broadband access to the Internet is the “always on” and the
            high-speed performance of broadband access. Recently, the addition of
            Voice Over
            IP  “VoIP” and other new services offered by broadband service providers
            has further increased the market demand for broadband connectivity. These
            new
            offerings have also increased the average per-customer and per-install
            revenues
            derived from broadband customers. The result creates a driving need for
            greater
            bandwidth. In addition, the build out of local municipal WiFi services
            has
            created a shortage of high quality broadband integration service contractors
            in
            the industry.
  Leading
            broadband service providers of cable and wireless high-speed access to
            the
            Internet continue to increase their investments in technology in order
            to offer
            upgrades, as well as new services to their existing customers and to
            the
            millions of new broadband users. We  believe that the investment
            required in the implementation of service expansions will continue to
            motivate
            service providers to focus on their core competencies and outsource many
            aspects
            of their business, including construction, maintenance, and upgrading
            of
            wireless telecommunication sites, infrastructure build-out, which is
            the market
            for our services.
  We
            believe that this trend for outsourcing in the deployment and support
            for
            Broadband customer services will continue to strengthen as the industry
            matures.
            As the economic environment continues its improvement of the past year,
            we
            believe that our prospects for the expansion of its broadband business
            are good
            and an increase in the demand for the deployment and maintenance service
            of
            tower/antenna system services are strong for 2006. We believe that
            infrastructure build-out, technology introduction, new applications and
            broadband deployment, integration and support will continue to be outsourced
            to
            qualified service providers such as our subsidiary, Services.
 
 The
            Company’s focus is to support the revenues and earnings growth of its operations
            by increasing the array of services to enhance revenue performance and
            gross
            profit margins.
  Services’
            opportunity to exploit the new wireless infrastructure integration demand
            for
            its services and to take advantage of future wireless and cable opportunities
            are limited by a number of factors:
 
 (i)
            These
            include its ability to financially support the agreements entered into
            and to
            finance continuing growth and fund technician recruitment, training and
            payroll,
            as well as the financing of operating cash flow requirements from expansion
            of
            its high quality technician services to the broadband providers in order
            to meet
            the demand for its services. This will require additional financing on
            a timely
            basis.
  (ii)
            To
            maximize capital availability for potential new services, we evaluate
            opportunities for services to its customer based on capital investment
            requirements, the potential profit margin, and the customer’s payment
            practices.
   4
 
 (iii)
            Although we focus on accelerating collections, and thereby reducing outstanding
            receivables and helping cash flow. The issues that rank high on evaluating
            new
            business opportunities are the customer’s accounts receivable payments and the
            derived gross profit margins. We continue to evaluate new business opportunities
            with respect to our receivables and payment practices
 
 JUNIPER
            COMMUNICATIONS, INC.
  Our
            other
            wholly owned subsidiary, Juniper Communications, Inc. ("JCOM") has discontinued
            its services provided to Cablevision in 2005 due primarily to difficulties
            in
            collecting balances owed by Cablevision.  JCOM has ceased all the services
            and has terminated all of its management and staff personnel. This business
            model which supported Cablevision installation by JCOM's internal staff
            was
            entirely distinct from that used by Services.  All accounts receivable
            outstanding as of December 31, 2005 have been fully reserved.
  COMPETITION
  The
            markets in which we operate are highly competitive, requiring substantial
            resources and skilled and experienced personnel. We compete with other
            companies
            in most of our geographic markets in which we operate, and several of
            our
            competitors are larger companies with greater financial, technical and
            marketing
            resources than we do. In addition, there are relatively few barriers
            to entry
            into the industries in which we operate and, as a result, any organization
            that
            has adequate financial resources and access to technical expertise may
            become a
            competitor. We believe that in 2007 a significant amount of revenue will
            be
            derived from direct bidding for project work, and price will often be
            an
            important factor in the award of such business and agreements.
  Accordingly,
            we could be under bid by our competitors in an effort by them to procure
            the
            business. We believe that, as demand for services increases, customers
            will
            increasingly consider other factors in choosing a service provider,
            including:  technical expertise, financial and operational resources,
            nationwide presence, industry reputation and dependability. Management
            believes
            that we will benefit when these factors are considered. There can no
            assurances,
            however, that our competitors will not develop the expertise, experience
            and
            resources to provide services that are superior in both price and quality
            to our
            services, or that we will be able to maintain or enhance its competitive
            position.
  Services
            for wireless infrastructure deployment have been provided by a mix of
            in-house
            service organizations and outsourced support providers. Most wireless
            service
            providers use a mix of both as sources to satisfy their customer requirements.
            Most contracted maintenance upgrading of wireless telecommunication services
            still remain in the hands of small independent contractors.
  We
            continue to believe that the present state of this fragmented industry
            will
            continue to change as smaller companies become acquired by larger
            companies.
  We
            believe that the opportunity continues for significant growth in this
            market.
            However, many of our current and potential competitors may have substantial
            competitive advantages relating to us including:
  (i)
                  longer
                      operating histories;(ii)
                  significantly
                      greater financial resources;(iii)
                  more
                      technical and marketing resources;(iv)
                  greater
                      brand name recognition; and(v)
                  larger
                      existing customer base.
   5
  These
            competitors may be able to respond more quickly to new or emerging technologies
            and changes in customer requirements and to devote greater resources
            to develop,
            promote and sell their services than we can. Despite our good performance
            versus
            our competitors to date, there is no assurance that our limited financial
            resources can allow us to take full advantage of these successes, nor
            that we
            will be able to finance major growth or acquisition opportunities.
 
 **FILM
            DISTRIBUTION SERVICES**
 
 Our
            film
            distribution services have been conducted through Juniper Pictures,
            Inc. (“Pictures”)
  Pictures
            has historically been engaged in acquiring film rights from independent
            producers and distributing these rights to domestic and international
            territories on behalf of the producers to various media (i.e. DVD, satellite,
            home video, pay-per view, pay television, television, and independent
            syndicated
            television stations). For the past several years, we have reduced our
            efforts in
            the distribution of film licenses primarily because of the resources
            required to
            continue in today's global markets and deal with issues such as electronic
            media
            and piracy.  At the end of 2006, we evaluated our film library, taking into
            account the revenue generated in 2005 and 2006, the resources available
            to us to
            continue to pursue opportunities in this area and the resources necessary
            to
            maintain our rights against international piracy and copyright
            infringement.  We took a charge of approximately $296,000 or 62% of
            the value of our film library.  While we have not ceased operations in this
            line of business we will engage in the sale or exploitation of film licenses
            if
            and when opportunities are available, we will at this time not aggressively
            devote our resources in this area.  Pictures generated revenue of
            approximately $6,600 in 2006 and approximately $55,400 in 2005.
 
 **COMPETITION**
  Competition
            is intense in the motion picture distribution industry. We will reallocate
            more
            of our time and effort to the sale of film licenses in 2007, if resources
            are
            available. We are in competition with other motion picture distribution
            companies, including many of which have greater resources than us, both
            in the
            acquisition of distribution rights to film properties and the sales of
            these
            properties to the various markets (i.e. Internet, pay, cable and television).
  
 **ITEM
            IA. RISKFACTORS:**
 
 Our
            business is subject to a variety of risks and uncertainties, which are
            described
            below. These risks and uncertainties are not the only ones we face. Additional
            risks and uncertainties not described or not known to management of the
            Company
            may also impair business operations. If any of the following risks actually
            occur, business, financial condition and results of operations could
            be
            materially and adversely affected.
 
 **AUDITORS
            HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
            CONCERN.**
 
 In
            their
            report dated March 5, 2007 Morgenstern,
            Svoboda & Baer, CPA’s, P.C., stated that our financial statements for the
            year ended December 31, 2006  and December 31, 2005 were prepared assuming
            that we would continue as a going concern. Our ability to continue as
            a going
            concern is an issue raised as a result of our recurring losses from operations.
            We have experienced net operating losses. Our ability to continue as
            a going
            concern is subject to our ability to maintain and enhance our profitability.
 
 **WE
            HAVE ACCUMULATED LOSSES AND ARE NOT CURRENTLY PROFITABLE.**
 
 We
            have
            incurred a deficit of $28.6 million as of December 31, 2006 and are
            currently experiencing negative cash flow. We expect to continue to experience
            negative cash flow and operating losses for the foreseeable future as
            we
            continue to make significant expenditures for acquisitions, sales and
            marketing,
            infrastructure development and general and administrative functions.
            As a
            result, we will need to generate significant revenues to achieve profitability.
            If our revenues grow more slowly than we anticipate, or if our operating
            expenses exceed expectations, we may experience reduced profitability.
   6
 
 **OUR
            COMMON STOCK TRADES IN A LIMITED PUBLIC MARKET, THE NASD OTC ELECTRONIC
            BULLETIN
            BOARD; AND IN ADDITION THERE ARE VARIOUS INDUSTRY FACTORS, WHICH COULD
            CAUSE
            INVESTORS TO FACE POSSIBLE VOLATILITY OF SHARE PRICE.**
 
 Our
            common stock is currently quoted on the NASD OTC Bulletin Board under
            the ticker
            symbol JUNI.OB. As of February 27, 2007 there were 15,670,122 shares
            of Common
            Stock outstanding, of which approximately 8,654,070 were tradable without
            restriction under the Securities Act.
 
 Various
            industry factors could cause volatility in the market prices of our shares.
            Factors such as, but not limited to, technological innovations, new products,
            acquisitions or strategic alliances entered into by us or our competitors,
            government regulatory action, patent or proprietary rights developments,
            and
            market conditions for penny stocks in general could have a material effect
            on
            the liquidity of our common stock and volatility of our stock
            price.
 
 **THE
            COMMUNICATIONS INDUSTRY HAS SUFFERED ECONOMIC DOWNTURNS AND REDUCED CAPITAL
            EXPENDITURES IN THE PAST AND ANY FUTURE ECONOMIC DOWNTURNS OR REDUCED
            CAPITAL
            EXPENDITURES MAY RESULT IN A DECREASE IN DEMAND FOR OUR
            SERVICES.**
 
 Commencing
            in 2001 and through 2003, the communications industry suffered a severe
            downturn
            that resulted in reduced capital expenditures for infrastructure projects,
            even
            among those customers that did not experience financial difficulties.
            Although
            our strategy is to increase the percentage of our business derived from
            large,
            financially stable customers in the communications industries, these
            customers
            may not continue to fund capital expenditures for infrastructure projects
            at
            current levels. Even if they do continue to fund projects, we may not
            be able to
            increase our share of their business. Bankruptcies or decreases in our
            customers’ capital expenditures and disbursements could reduce our revenue,
            profitability or liquidity.
  
 **MANY
            OF THE INDUSTRIES WE SERVE ARE SUBJECT TO CONSOLIDATION AND RAPID TECHNOLOGICAL
            AND REGULATORY CHANGE, AND OUR INABILITY OR FAILURE TO ADJUST TO OUR
            CUSTOMERS’
CHANGING NEEDS COULD REDUCE DEMAND FOR OUR SERVICES.**
 
 We
            derive, and anticipate that we will continue to derive, a substantial
            portion of
            our revenue from customers in the communications industry. The communications
            industry is subject to rapid changes in technology and governmental regulation.
            Changes in technology may reduce the demand for the services we provide.
            New or
            developing technologies could displace the wireless systems used for
            the
            transmission of voice, video and data, and improvements in existing technology
            may allow communications providers to significantly improve their networks
            without physically upgrading them. Additionally, the communications industry
            has
            been characterized by a high level of consolidation that may result in
            the loss
            of one or more of our major customers. Our
            success depends also on the continued trend by our customers to outsource
            their
            needs. If this trend does not continue and our customers elect to perform
            the
            deployment services themselves, our operation results may decline.
 
 **THE
            COMMUNICATIONS INDUSTRY IS HIGHLY COMPETITIVE WHICH MAY REDUCE OUR MARKET
            SHARE
            AND HARM OUR FINANCIAL PERFORMANCE.**
 
 The
            communications industry is highly fragmented, and we compete with other
            companies in most of the markets in which we operate, ranging from small
            independent firms servicing local markets to larger firms servicing regional
            and
            national markets. We also face competition from existing or prospective
            customers that employ in-house personnel to perform some of the same
            types of
            services we provide. There are relatively few barriers to entry into
            the markets
            in which we operate and, as a result, any organization that has adequate
            financial resources and access to technical expertise and skilled personnel
            may
            become one of our competitors.
  **MOST
            OF OUR CONTRACTS DO NOT OBLIGATE OUR CUSTOMERS TO UNDERTAKE ANY INFRASTRUCTURE
            PROJECTS OR OTHER WORK WITH US.**
 
 A
            significant portion of our revenue is derived from service agreements.
            Under our
            service agreements, we contract to provide customers with individual
            project
            services, through work orders, within defined geographic areas on a fixed
            fee
            basis. Under these agreements, our customers have no obligation to undertake
            any
            infrastructure projects or other work with us. A significant decline
            in the
            projects customers assign us under service agreements could result in
            a decline
            in our revenue, profitability and liquidity.
   7
 
 **WE
            MAY NOT ACCURATELY ESTIMATE THE COSTS ASSOCIATED WITH OUR SERVICES PROVIDED
            UNDER CONTRACTS WHICH COULD IMPAIR OUR FINANCIAL
            PERFORMANCE.**
 
 A
            substantial portion of our revenue in 2006 is derived from master 
agreements and other service agreements that are cost plus contracts
            with
            ceiling limits. Under these contracts, we set the price of our services
            on a per
            unit or aggregate basis and assume the risk that the costs associated
            with our
            performance may be greater than we anticipated. Revenue derived from
            these
            contracts are strictly derived from the broadband installation and wireless
            infrastructure services of our business, which accounted for 81% for 2005
            and 99% for 2006 of the gross revenue for the year, respectively. This
            represents cable revenue as follows: 31% from Time-Warner, 30% from Cox
            Communication, 17% from Cablevision and 3% from Comcast for 2005; and
            wireless
            infrastructure services of 21% from Bechtel Corporation; 20% from Crown
            Castle
            USA, Inc.; 15% from Sprint/Nextel; 12% from CHZM Hill and 10% from Revol
            for
            2006, respectively.
 
 Our
            profitability is therefore dependent upon our ability to accurately estimate
            the
            costs associated with our services. These costs may be affected by a
            variety of
            factors, such as lower than anticipated productivity, conditions at the
            work
            sites differing materially from what was anticipated at the time we bid
            on the
            contract and higher costs of materials and labor. Certain agreements
            or projects
            could have lower margins than anticipated or losses if actual costs for
            our
            contracts exceed our estimates, which could reduce our profitability
            and
            liquidity.
  **THE
            CONCENTRATION OF OUR BUSINESS AMONG LARGE CUSTOMERS COULD INCREASE CREDIT
            RISKS.**
 
 The
            concentration of a portion of our business among a number of large customers
            increases our potential credit risks. One or more of these customers
            could delay
            payments or default on credit extended to them. Any significant delay
            in the
            collection of significant accounts receivable could result in an increased
            need
            for us to obtain working capital
            from other sources, possibly on worse terms than we could have negotiated
            if we
            had established such working capital resources prior to such delays or
            defaults.
            Any significant default could result in significantly decreased earning
            and
            material and adversely affect our businesses financial condition and
            results of
            operations. Revenue derived from the major customers accounted for 78%
            for 2006
            of the gross revenue for the year.
 
 **THE
            PROVISION OF SERVICES FOR BROADBAND INSTALLATION AND WIRELESS INFRASTRUCTURE
            DEPLOYMENT IS SEASONAL AND IS AFFECTED BY ADVERSE WEATHER CONDITIONS
            AND THE
            SPENDING PATTERNS OF OUR CUSTOMERS, EXPOSING US TO VARIABLE QUARTERLY
            RESULTS.**
 
 The
            provision of services for broadband installation and wireless infrastructure
            deployment is affected by adverse weather conditions and the spending
            patterns
            of our customers, exposing the Company to variable quarterly results.
            Inclement
            weather may lower the demand for our service in the winter months, as
            well as
            other times of the year. Furthermore, the weather can delay the completion
            of
            projects already started in addition to delaying the commission of new
            projects.
            Therefore, we cannot predict that the financial results for any particular
            quarter will be the same for any other quarter.
 
 Natural
            catastrophes such as the recent hurricanes in the United States could
            also have
            a negative impact on the economy overall and on the Company’s ability to perform
            outdoor services in affected regions or utilize equipment and crew stationed
            in
            those regions, which in turn could significantly impact the results of
            any one
            or more reporting periods. However, these natural catastrophes historically
            have
            generated additional revenue subsequent to the event
  **OUR
            BUSINESS REQUIRES THE DEPLOYMENT OF SERVICES VEHICLES THROUGHOUT THE
            AREAS IN
            WHICH WE PROVIDES SERVICES AND INCREASES IN THE COSTS OF FUEL COULD REDUCE
            OUR
            OPERATING MARGINS.**
 
 The
            price
            of fuel needed to run our vehicles and equipment is unpredictable and
            fluctuates
            based on events outside our control, including geopolitical developments,
            supply
            and demand for oil and gas, actions by OPEC and other oil and gas producers,
            war
            and unrest in oil producing countries, regional production patterns and
            environmental concerns. Most of our contracts do not allow us to adjust
            our
            pricing. Accordingly, any increase in fuel costs could reduce our profitability
            and liquidity.
 
 **WE
            MAY CHOOSE, OR BE REQUIRED, TO PAY OUR SUBCONTRACTORS EVEN IF OUR
            CUSTOMERS**
 **DO
            NOT PAY, OR DELAY PAYING, US FOR THE RELATED SERVICES.**
 
 We
            use
            subcontractors to perform portions of our services and to manage work
            flow. In
            some cases, we pay our subcontractors before our customers pay us for
            the
            related services. If we choose, or are required, to pay our subcontractors
            for
            work performed for customers who fail to pay, or delay paying, us for
            the
            related work, we could experience a decrease in profitability and
            liquidity.
   8
 
 **OUR
            CUSTOMERS ARE OFTEN LARGER COMPANIES THAT HAVE SUPERIOR BARGAINING
            STRENGTH**
 
 Most
            of
            our customers are large companies that have a greater bargaining position
            than
            we do in negotiating contracts due to the potential value to us of obtaining
            their business and the intense competition we face to obtain that business.
            This
            unequal bargaining position could result in our acceptance of less favorable
            contract terms than we might otherwise accept, reduced operating margins
            and
            material and adverse effects on our business, financial condition and
            results of
            operations.
 
 **THE
            DEVELOPMENT AND INSTALLATION OF BROADBAND AND WIRELESS INFRASTRUCTURE
            REQUIRES
            UNDERGROUND WORK, WHICH REQUIRES COMPLIANCE WITH ENVIRONMENTAL LAWS AND
            OUR
            FAILURE TO COMPLY WITH ENVIRONMENTAL LAWS COULD RESULT IN SIGNIFICANT
            LIABILITIES.**
 
 Some
            of
            the work we perform is in underground environments. If the field location
            maps
            supplied to us are not accurate, or if objects are present in the soil
            that are
            not indicated on the field location maps, our underground work could
            strike
            objects in the soil containing pollutants and result in a rupture and
            discharge
            of pollutants. In such a case, we may be liable for fines and
            damages.
 
 In
            addition, new environmental laws and regulations, stricter enforcement
            of
            existing laws and regulations, the discovery of previously unknown contamination
            or leaks, or the imposition of new clean-up requirements could require
            us to
            incur significant costs or become the basis for new or increased liabilities
            that could negatively impact our profitability and liquidity.
 
 **OUR
            BUSINESS IS SUBJECT TO HAZARDS THAT COULD RESULT IN SUBSTANTIAL LIABILITIES
            AND
            WEAKEN OUR FINANCIAL CONDITION.**
  Deployment,
            construction and maintenance of wireless communication towers undertaken
            by our
            employees involve exposure to electrical lines, heavy equipment, mechanical
            failures and adverse weather conditions. If serious accidents or fatalities
            occur, we may be restricted from bidding on certain work and certain
            existing
            contracts could be terminated. In addition, if our safety record were
            to
            deteriorate, our ability to bid on certain work could suffer. The occurrence
            of
            accidents in our business could result in significant liabilities or
            harm our
            ability to perform under our contracts or enter into new contracts with
            customers, which could reduce our revenue, profitability and
            liquidity.
 
 **MANY
            OF OUR COMMUNICATIONS CUSTOMERS ARE HIGHLY REGULATED AND THE ADDITION
            OF NEW
            REGULATIONS OR CHANGES TO EXISTING REGULATIONS MAY ADVERSELY IMPACT THEIR
            DEMAND
            FOR OUR SPECIALTY CONTRACTING SERVICES AND THE PROFITABILITY OF THOSE
            SERVICES.**
 
 Many
            of
            our communications customers are regulated by the Federal Communications
            Commission. The FCC may interpret the application of its regulations
            to
            communication companies in a manner that is different than the way such
            regulations are currently interpreted and may impose additional regulations.
            If
            existing or new regulations have an adverse affect on our communications
            customers and adversely impact the profitability of the services they
            provide,
            then demand for our specialty contracting services may be reduced.
 
 **THE
            CURRENT AND CONTINUED GROWTH OF OUR OPERATIONS IS CONTINGENT ON OUR ABILITY
            TO
            RECRUIT EMPLOYEES.**
 
 In
            the
            event we are able to obtain necessary funding, we expect to experience
            growth in
            the number of employees and the scope of our operations. In particular,
            we may
            hire additional sales, marketing and administrative personnel. Additionally,
            acquisitions could result in an increase in employee headcount and business
            activity. Such activities could result in increased responsibilities
            for
            management. We believe that our ability to increase our customer support
            capability and to attract, train, and retain qualified technical, sales,
            marketing, and management personnel, will be a critical factor to our
            future
            success.
 
 **WE
            HAVE RECENTLY CLOSED ON AN ACQUISITION WHICH HAS EXPANDED OUR OPERATIONS
            AND WE
            MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY.**
 
 Our
            future success will be highly dependent upon our ability to successfully
            manage
            the expansion of our operations. Our ability to manage and support our
            growth
            effectively will be substantially dependent on our ability to: implement
            adequate improvements to financial and management controls, reporting
            and order
            entry systems, and other procedures and hire sufficient numbers of financial,
            accounting, administrative, and management personnel. Our expansion and
            the
            resulting growth in the number of our employees would result in increased
            responsibility for both existing and new management personnel. We are
            in the
            process of establishing and upgrading our financial accounting and procedures.
            We may not be able to identify, attract, and retain experienced accounting
            and
            financial personnel. Our future operating results will depend on the
            ability of
            our management and other key employees to implement and improve our systems
            for
            operations, financial control, and information management, and to recruit,
            train, and manage its employee base. We may not be able to achieve or
            manage any
            such growth successfully or to implement and maintain adequate financial
            and
            management controls and procedures, and any inability to do so would
            have a
            material adverse effect on its business, results of operations, and financial
            condition.
   9
 
 **THE
            COMMUNICATIONS INDUSTRY IS CONSTANTLY GROWING AND EVOLVING. ACCORDINGLY
            OUR
            SUCCESS IS DEPENDENT ON OUR ABILITY TO ADDRESS MARKET OPPORTUNITIES.**
 
 Our
            future success depends upon our ability to address potential market
            opportunities while managing our expenses to match our ability to finance
            our
            operations. This need to manage our expenses will place a significant
            strain on
            our management and operational resources. If we are unable to manage
            our
            expenses effectively, we may be unable to finance our operations. By
            adjusting
            our operations and development to the level of capitalization, we believe
            we
            have sufficient capital resources to meet projected cash flow deficits.
            However,
            if during that period or thereafter, we are not successful in generating
            sufficient liquidity from operations or in raising sufficient capital
            resources,
            on terms acceptable to us, this could have a material adverse effect
            on our
            business, results of operations liquidity and financial condition and
            would
            prevent us from being able to utilize potential market
            opportunities.
 
 
 **WE
            SHALL BE REQUIRED TO SEEK ADDITIONAL MEANS OF FINANCING.**
  On
            December 28, 2005, we entered into a financing arrangement involving
            the sale of
            an aggregate of $1,000,000 principal amount of callable secured convertible
            notes and on March 14, 2006, we entered into a financing arrangement
            involving
            the sale of an additional $300,000 principal amount of callable secured
            convertible notes. However, there can be no assurance that we will generate
            adequate revenues from operations. Failure to generate such operating
            revenues
            would have an adverse impact on our financial position and results of
            operations
            and ability to continue as a going concern. Our operating and capital
            requirements during the next fiscal year and thereafter will vary based
            on a
            number of factors, including the level of sales and marketing activities
            for our
            services and products. Accordingly, we shall be required to obtain additional
            private or public financing including debt or equity financing and there
            can be
            no assurance that such financing will be available as needed, or, if
            available,
            on terms favorable to us. Any additional equity financing may be dilutive
            to
            stockholders and such additional equity securities may have rights, preferences
            or privileges that are senior to those of our existing common
            stock.
  Furthermore,
            debt financing, if available, will require payment of interest and may
            involve
            restrictive covenants that could impose limitations on our operating
            flexibility. Our failure to successfully obtain additional future funding
            may
            jeopardize our ability to continue our business and operations.
 
 If
            we
            raise additional funds by issuing equity securities, existing stockholders
            may
            experience a dilution in their ownership. In addition, as a condition
            to giving
            additional funds to us, future investors may demand, and may be granted,
            rights
            superior to those of existing stockholders.
 
 **SERVICES
            FOR BROADBAND INSTALLATION AND WIRELESS INFRASTRUCTURE DEPLOYMENT ARE
            PROVIDED
            BY BOTH IN-HOUSE SERVICE ORGANIZATIONS AND OUTSOURCED SUPPORT PROVIDERS
            AND MANY
            OF OUR COMPETITORS ARE LARGER AND HAVE GREATER FINANCIAL AND OTHER RESOURCES
            THAN WE DO AND THOSE ADVANTAGES COULD MAKE IT DIFFICULT FOR US TO COMPETE
            WITH
            THEM.**
 
 Many
            of
            our current and potential competitors may have substantial competitive
            advantages relative to us, including:
 
 ·
                  longer
                      operating histories;
 ·
                  significantly
                      greater financial;
 ·
                  technical
                      and marketing resources;
 ·
                  greater
                      brand name recognition;
 ·
                  larger
                      existing customer bases;
 
 These
            competitors may be able to respond more quickly to new or emerging technologies
            and changes in customer requirements and to devote greater resources
            to develop,
            promote and sell their services than we can.
 
 **OUR
            COMPANY AND/OR OUR MANAGEMENT MAY BE SUBJECT TO FINES, SANCTIONS AND/OR
            PENALTIES OF AN INDETERMINABLE NATURE AS A RESULT OF POTENTIAL VIOLATIONS
            OF
            FEDERAL SECURITIES LAWS IN CONNECTION WITH THE ISSUANCE OF OUR COMMON
            STOCK
            WITHOUT A VALID EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
            ACT.**
  It
            has
            come to our attention that sales of our common stock may have been made
            in
            violation of Section 5 of the Securities Act of 1933, as amended.  It
            appears that individuals, who received shares of stock, sold such shares
            of
            common stock pursuant to a Registration Statement filed on Form S-8 and
            then
            remitted the amounts received in connection with such sales back to us
            in
            exchange for the issuance of restricted shares of our common stock.  Such
            use of a Form S-8 Registration Statement may not have been proper under
            the
            Securities Act of 1933, as amended.  Due to the aforementioned, shares may
            have been issued without registration pursuant to the Securities Act
            of 1933, as
            amended, or without relying upon a valid exemption from registration
            under the
            Securities Act of 1933, as amended, therefore we may be subject to enforcement
            proceedings, fines, sanctions and/or penalties.
   10
  In
            addition to any potential enforcement proceedings, fines, sanctions and/or
            penalties we may be subject to, individuals who purchased such shares
            of common
            stock may be entitled to rescind their purchases.  We are currently unable
            to determine the amount of damages, if any, that we may incur as a result
            of any
            such rescission rights, which may include, but are not limited to, damages
            that
            may result from the following:
 
 ·
                subsequent
                    third party purchaser(s) of shares that were resold pursuant
                    to the
                    Registration Statement filed on Form S-8,
                    or 
 ·
                the
                    existing shareholders of our Company that may make a claim, on
                    a
                    derivative basis, that these transactions and the shares issued
                    may have
                    resulted in a dilution of the value of their
                    shareholdings.  The
            payment of damages could have a material adverse effect on our revenue,
            profits,
            results of operations, financial condition and future prospects.
 
 **RISKS
            RELATING TO OUR CURRENT FINANCING ARRANGEMENT:**
 
 **THERE
            ARE A LARGE NUMBER OF SHARES UNDERLYING OUR CALLABLE SECURED CONVERTIBLE
            NOTES
            AND WARRANTS THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE
            SHARES
            MAY DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.**
 
 As
            of
            February 27, 2007, we had 15,670,122 shares of common stock issued and
            outstanding and callable secured convertible notes outstanding or an
            obligation
            to issue callable secured convertible notes that may be converted into
            an
            estimated 118,181,818 shares of common stock at current market prices,
            and
            outstanding warrants or an obligation to issue warrants to purchase 8,000,000
            shares of common stock. In addition, the number of shares of common stock
            issuable upon conversion of the outstanding callable secured convertible
            notes
            may increase if the market price of our stock declines. All of the shares,
            including all of the shares issuable upon conversion of the notes and
            upon
            exercise of our warrants, may be sold without restriction. The sale of
            these
            shares may adversely affect the market price of our common stock. In
            addition to
            the foregoing shares which may be issuable in connection with our current
            financing, we currently have 25,357 shares of 12% non-voting convertible
            preferred stock outstanding and 135,000 shares of Series B Voting Preferred
            Stock outstanding, which are not currently convertible into shares of
            common
            stock, but based on the current market price would be convertible into
            an
            aggregate of 174,872,409 shares of our common stock. Furthermore, we
            currently
            have an additional 10,568,875 warrants outstanding and 1,175,000 options
            outstanding.
 
 **THE
            CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF OUR CALLABLE SECURED
            CONVERTIBLE NOTES COULD REQUIRE US TO ISSUE A SUBSTANTIALLY GREATER NUMBER
            OF
            SHARES, WHICH WILL CAUSE DILUTION TO OUR EXISTING
            STOCKHOLDERS.**
 
 Our
            obligation to issue shares upon conversion of our callable secured convertible
            notes is essentially limitless. The following is an example of the amount
            of
            shares of our common stock that are issuable, upon conversion of the
            callable
            secured convertible notes (excluding accrued interest), based on market
            prices
            25%, 50% and 75% below the current market price, as of February 27, 2007
            of
            $0.035.
 
 %
                      Below
                    Market
                  Price
                      Per Share
                  With
                      Discount
                    At
                      50%
                  Number
                      of Shares
                    Issuable
                  %
                      of Outstanding
                    Stock25%
                  $0.0263
                  $0.0131
                  76,190,476
                  83.31%50%
                  $0.0175
                  $0.0088
                  114,285,714
                  88.22%75%
                  $0.0088
                  $0.0044
                  228,571,429
                  93.74%
 
 
 As
            illustrated, the number of shares of common stock issuable upon conversion
            of
            our secured convertible notes will increase if the market price of our
            stock
            declines, which will cause dilution to our existing stockholders.
   11
  **THE
            CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF OUR CALLABLE SECURED
            CONVERTIBLE NOTES MAY ENCOURAGE INVESTORS TO MAKE SHORT SALES IN OUR
            COMMON
            STOCK, WHICH COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON
            STOCK.**
 
 The
            callable secured convertible notes are convertible into shares of our
            common
            stock at a 50% discount to the trading price of the common stock prior
            to the
            conversion. The significant downward pressure on the price of the common
            stock
            as the selling stockholder converts and sells material amounts of common
            stock
            could encourage short sales by third party investors. This could place
            further
            downward pressure on the price of the common stock. The selling stockholder could
            sell common stock into the market in anticipation of covering the short
            sale by
            converting their securities, which could cause the further downward pressure
            on
            the stock price. In addition, not only the sale of shares issued upon
            conversion
            or exercise of notes, warrants and options, but also the mere perception
            that
            these sales could occur, may adversely affect the market price of the
            common
            stock
 
 **THE
            ISSUANCE OF SHARES UPON CONVERSION OF THE CALLABLE SECURED CONVERTIBLE
            NOTES AND
            EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE AND SUBSTANTIAL
            DILUTION TO
            OUR EXISTING STOCKHOLDERS.**
  The
                issuance of shares upon conversion of the callable secured convertible
                notes and
                exercise of warrants may result in substantial dilution to the interests
                of
                other stockholders since the selling stockholders may ultimately
                convert and
                sell the full amount issuable on conversion. Although the selling
                stockholders
                may not convert their Callable Secured Convertible Notes and/or exercise
                their
                warrants if such conversion or exercise would cause them to own more
                than 4.99%
                of our outstanding common stock, this restriction does not prevent
                the selling
                stockholders from converting and/or exercising some of their holdings,
                selling
                those shares and then converting the rest of their holdings. In this
                way, the
                selling stockholders could convert and sell their holdings while
                never owning
                more than 4.99% of our common stock at any one time. There is no
                upper limit on
                the number of shares that may be issued which will have the effect
                of further
                diluting the proportionate equity interest and voting power of holders
                of our
                common stock, including investors in this offering
  **IF
            WE ARE REQUIRED FOR ANY REASON TO REPAY OUR OUTSTANDING CALLABLE SECURED
            CONVERTIBLE NOTES, WE WOULD BE REQUIRED TO DEPLETE OUR WORKING CAPITAL,
            IF
            AVAILABLE, OR RAISE ADDITIONAL FUNDS. OUR FAILURE TO REPAY THE CALLABLE
            SECURED
            CONVERTIBLE NOTES, IF REQUIRED, COULD RESULT IN LEGAL ACTION AGAINST
            US, WHICH
            COULD REQUIRE THE SALE OF SUBSTANTIAL ASSETS.**
 
 On
            December 28, 2005, we entered into a financing arrangement involving
            the sale of
            an aggregate of $1,000,000 principal amount of callable secured convertible
            notes and stock purchase warrants to buy 1,000,000 shares of our common
            stock
            and on March 14, 2006, we entered into a financing arrangement involving
            the
            sale of an additional $300,000 principal amount of callable secured convertible
            notes and stock purchase warrants to buy 7,000,000 shares of our common
            stock.
            The callable secured convertible notes are due and payable, with 8% interest,
            unless sooner converted into shares of our common stock. Although we
            currently
            have $800,000 callable secured convertible notes outstanding, the investor
            is
            obligated to purchase additional callable secured convertible notes in
            the
            aggregate amount of $500,000. In addition, any event of default such
            as our
            failure to repay the principal or interest when due, our failure to issue
            shares
            of common stock upon conversion by the holder, our failure to timely
            file a
            registration statement or have such registration statement declared effective,
            breach of any covenant, representation or warranty in the Securities
            Purchase
            Agreement or related convertible note, the assignment or appointment
            of a
            receiver to control a substantial part of our property or business, the
            filing
            of a money judgment, writ or similar process against us in excess of
            $50,000,
            the commencement of a bankruptcy, insolvency, reorganization or liquidation
            proceeding against us and the delisting of our common stock could require
            the
            early repayment of the callable secured convertible notes, including
            a default
            interest rate of 15% on the outstanding principal balance of the notes
            if the
            default is not cured within the specified grace period and as of the
            end of the
            last fiscal quarter the amount to repay the callable secured convertible
            notes
            would cost an aggregate of approximately $1,004,623. We are currently
            in default
            of our obligations due to the fact that we have failed to file an information
            statement with the Securities and Exchange Commission in a timely manner. 
We anticipate that the full amount of the callable secured convertible
            notes
            will be converted into shares of our common stock, in accordance with
            the terms
            of the callable secured convertible notes. If we are required to repay
            the
            callable secured convertible notes, we would be required to use our limited
            working capital and raise additional funds. If we were unable to repay
            the notes
            when required, the note holders could commence legal action against us
            and
            foreclose on all of our assets to recover the amounts due. Any such action
            would
            require us to curtail or cease operations.
  **IN
            ORDER TO OBTAIN ADDITIONAL FINANCING UNDER THE DECEMBER 2005 SECURITIES
            PURCHASE
            AGREEMENT, WE WILL NEED TO SATISFY CERTAIN CLOSING CONDITIONS AND IF
            THEY ARE
            NOT SATISFIED AND WE DO NOT OBTAIN THE ADDITIONAL FINANCING, WE WILL
            HAVE TO
            REDUCE STAFF AND CURTAIL OUR OPERATIONS.**
 
 Pursuant
            to the terms of our December 2005 Securities Purchase Agreement we were
            to
            obtain an aggregate of $1,000,000 of financing. Accordingly, we sold
            to the
            investors $500,000 in callable secured convertible notes on December
            28, 2005
            and the investor is obligated to purchase additional callable secured
            convertible notes in the aggregate
            amount of $500,000 following this registration statement being declared
            effective. In order to obtain the additional $500,000 of financing, the
            conditions to closing previously satisfied by us will continue to be
            satisfied.
            In the event that the conditions are not satisfied, we will need to obtain
            additional financing from another source. There is no assurance that
            we will be
            successful in obtaining additional financing and if additional financing
            is not
            available or is not available on acceptable terms, we will have to reduce
            staff
            and curtail our operations.
   12
 
 **WE
            ARE REQUIRED TO PAY LIQUIDATED DAMAGES PURSUANT TO OUR DECEMBER 2005
            SECURITIES
            PURCHASE AGREEMENT AS A RESULT OF OUR FAILURE TO FILE A PROXY OR INFORMATION
            STATEMENT IN THE TIMELINE PRESCRIBED BY THE SECURITIES PURCHASE AGREEMENT,
            AND
            THE PAYMENT OF LIQUIDATED DAMAGES WILL RESULT IN DEPLETING OUR WORKING
            CAPITAL
            AND WE MAY BE REQUIRED TO SEEK ADDITIONAL FUNDING TO SATISFY SUCH
            PAYMENT.**
 
 Pursuant
            to the terms of our Securities Purchase Agreement, if we did not file
            a proxy or
            information statement no later than January 31, 2006 and use our best
            efforts to
            obtain, on or before April 30, 2006, approval of our stockholders to
            increase
            our authorized capital, we are obligated to pay liquidated damages in
            the amount
            of 3.0% per month of the face amount of the issued and outstanding secured
            convertible notes, until a proxy or information statement is filed.  We did
            not file a definitive statement until June 8, 2006.   If we are
            required to pay liquidated damages for the issued and outstanding secured
            convertible notes, we will be required to pay approximately $75,400 (3.0%
            per
            month of the $500,000 of secured convertible notes outstanding for four
            months
            and eight days at 3.0% per month of the $300,000 of the secured convertible
            notes outstanding for two months and -eight- days). As of the date hereof,
            the
            investors have not demanded payment of the liquidated damages. The payment
            of
            liquidated damages will result in depleting our working capital and we
            may be
            required to seek additional funding to satisfy such payment
  **RISKS
            RELATING TO OUR COMMON STOCK:**
  **WE
            HAVE HAD TO FILE FOR EXTENSIONS FOR OUR RECENT ANNUAL AND QUARTERLY FILINGS
            AND
            IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD
            BE REMOVED
            FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS
            TO
            SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES
            IN
            THE SECONDARY MARKET.**
  Companies
            trading on the OTC Bulletin Board, such as us, must be reporting issuers
            under
            Section 12 of the Securities Exchange Act of 1934, as amended, and must
            be
            current in their reports under Section 13, in order to maintain price
            quotation
            privileges on the OTC Bulletin Board. If we fail to remain current on
            our
            reporting requirements, we could be removed from the OTC Bulletin Board.
            As a
            result, the market liquidity for our securities could be severely adversely
            affected by limiting the ability of broker-dealers to sell our securities
            and
            the ability of stockholders to sell their securities in the secondary
            market.
  **OUR
            COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE
            TRADING
            MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR
            STOCK
            CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.**
  The
            Securities and Exchange Commission has adopted Rule 15g-9 which establishes
            the
            definition of a "penny stock," for the purposes relevant to us, as any
            equity
            security that has a market price of less than $5.00 per share or with
            an
            exercise price of less than $5.00 per share, subject to certain exceptions.
            For
            any transaction involving a penny stock, unless exempt, the rules
            require:
 
 ·
                  that
                      a broker or dealer approve a person's account for transactions
                      in penny
                      stocks; and
 ·
                  the
                      broker or dealer receives from the investor a written agreement
                      to the
                      transaction, setting forth the identity and quantity of the
                      penny stock to
                      be purchased.
 
 In
            order
            to approve a person's account for transactions in penny stocks, the broker
            or
            dealer must:
 
 ·
                  obtain
                      financial information and investment experience objectives
                      of the person;
                      and
 ·
                  make
                      a reasonable determination that the transactions in penny stocks
                      are
                      suitable for that person and the person has sufficient knowledge
                      and
                      experience in financial matters to be capable of evaluating
                      the
                      risks of transactions in penny
                      stocks.
 
  The
            broker or dealer must also deliver, prior to any transaction in a penny
            stock, a
            disclosure schedule prescribed by the Commission relating to the penny
            stock
            market, which, in highlight form:
 
 ·
                  sets
                      forth the basis on which the broker or dealer made the suitability
                      determination; and
 ·
                  that
                      the broker or dealer received a signed, written agreement from
                      the
                      investor prior to the transaction.
 
 Generally,
            brokers may be less willing to execute transactions in securities subject
            to the
            "penny stock" rules. This may make it more difficult for investors to
            dispose of
            our common stock and cause a decline in the market value of our
            stock.
 Disclosure
            also has to be made about the risks of investing in penny stocks in both public
            offerings and in secondary trading, about the commissions payable to
            both the
            broker-dealer and the registered representative, and current quotations
            for the
            securities and the rights and remedies available to an investor in cases
            of
            fraud in penny stock transactions. Finally, monthly statements have to
            be sent
            disclosing recent price information for the penny stock held in the account
            and
            information on the limited market in penny stocks.
 
 **MAJOR
            CUSTOMERS**
 
 In
            2006,
            Bechtel Corporation, Crown Castle USA, Inc., Sprint/Nextel, CH2M Hill,
            and Revol
            accounted for 21%, 20%, 15 %, 12% and 10% of our total revenue, respectively.
   13
  **GOVERNMENT
            REGULATIONS**
  In
            connection with the installation of wiring in underground environments,
            the
            communications industry may in the future be subject to environmental
            regulations by various governmental authorities. Such regulations could
            affect
            the manner in which we perform services. However, we are not aware of
            any
            existing or probable governmental regulations that may have a material
            effect on
            the normal operations of our business. There also are no relevant environmental
            laws that require compliance by us that may have a material effect on
            the normal
            operations of the business.
 
 **ITEM
            2. DESCRIPTION OF PROPERTY**
 
 Our
            headquarters are located at 20283 State Road, Suite 400, Boca Raton,
            Florida
            33498, and we have subsidiary office at 60 Cutter Mill Road, Suite 611,
            Great
            Neck, New York 11021 (consisting of 1,650 square feet of offices), 231
            Commerce
            Drive, Franklin, Indiana 46131 (consisting of approximately 7,000 square
            feet of
            office and warehouse space) and 5326 Main Street, Spring Hill, Tennessee
            37174
            (consisting of approximately 600 square feet of office space).
  Our
            lease
            in Boca Raton is on month to month basis, with current rent of $200 per
            month,
            which has expired on May 2006. Services lease in Nashville is for twelve
            months
            which expired on August 15, 2006 and with current rent of $600 per month.
            Services’ sublease’s the New York office from Entertainment Financing
            Inc.(“EFI), an entity 100% owned by our Chief Executive Officer, currently
            at
            approximately $4,800 per month. EFI’s lease and Services’ sublease on this space
            expire on November 30. 2016. EFI has agreed that for the term of the
            sublease
            the rent paid to it will be substantially the same rent that it pays
            under its
            master lease to the landlord. New Wave’s lease in Indiana is on a month to month
            basis, with current rent of $5,266 per month and in Nashville which expired
            on
            August 16, 2006 and currently leases space on a month to month basis
            of $600 per
            month.
 
 **ITEM
            3. LEGAL PROCEEDINGS**
 
 In
            the
            ordinary course of business, we may be involved in legal proceedings
            from time
            to time. Although occasional adverse decisions or settlements may occur,
            management believes that the final disposition of such matters will not
            have a
            material adverse effect on its financial position, results of operations
            or
            liquidity.
 
 In
            September 2001, we issued 150,000 shares of our common stock in exchange
            for a
            short-term promissory note for $105,000, maturing in October 2001. The
            subscriber to the shares defaulted upon the maturity of the note. We
            have
            pursued collection and have obtained a judgment in New York. Further,
            we filed
            the judgment in New Jersey, the state in which the subscriber resides.
            During
            December 2004, we agreed to a settlement consisting of four payment totaling
            $130,000 over the period December 2004 through April 2005. In early 2005,
            after
            payments totaling $50,000, the subscriber again defaulted on the settlement.
            During April 2005, we agreed to a final settlement payment of $70,000
            bringing
            the total proceeds to $120,000. The total legal and collection costs
            for the
            matter are approximately $50,000. A partner in one of the law firms representing
            us is a member of our board of directors.
  We
            are a
            defendant in a lawsuit entitled Terry Klein v. Juniper Group, Inc., et
            ano,
            commenced in the Supreme Court of the State of New York, County of New
            York on
            January 12, 2006, which seeks to recover moneys arising out of the execution
            by
            us of a Promissory Note in favor of the plaintiff in the principal amount
            of
            $233,000 as well as other relief. We have asserted a defense of payment
            of the
            Note and are vigorously contesting the plaintiff’s claim. Our defense is that
            the note has been paid in full.
  A
            separate claim in the complaint is that we failed to comply with certain
            reporting requirements , the subject of which was under the control of
            the
            plaintiff and is seeking indemnification from us in the event that she
            is held
            responsible. We have denied such allegations and are vigorously contesting
            them.
 .
 **ITEM
            4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
            HOLDERS**
 
 NONE
 
 
 
 
 
 
 
 
 
 
 
  14
   **PART
            II**
 
 **ITEM
            5. MARKETFOR COMMON EQUITY, RELATED STOCKHOLDER
            MATTERS AND
            SMALL BUSINESS ISSUERS PURCHASERS OF SECURITIES**
  The
              Company's 12% Convertible Redeemable Preferred Stock ("Preferred Stock")
              is
              traded on the OTCBB. The following constitutes the high and low sales
              prices for
              the common stock as reported by OTCBB for each of the quarters of 2005
              and 2006,
              respectively. The quotations shown below reflect inter-dealer prices,
              without
              retail mark-up, mark-down or commission and may not represent actual
              transactions.
 
  2005
                  HIGH
                  LOWFIRST
                      QUARTER
                  $0.350
                  $0.130SECOND
                      QUARTER
                  0.200
                  0.075THIRD
                      QUARTER
                  0.150
                  0.065FOURTH
                      QUARTER
                  0.095
                  0.0202006FIRST
                      QUARTER
                  $0.034
                  $0.016SECOND
                      QUARTER
                  0.120
                  0.015THIRD
                      QUARTER
                  0.070
                  0.015FOURTH
                      QUARTER
                  0.050
                  0.023
 
 (1)
            NON-VOTING CONVERTIBLE PREFERRED STOCK
 
 As
              of
              February 27, 2007, there were 25,357 shares outstanding.  Preferred
              stockholders are entitled to receive a dividend out of assets legally
              available
              for payment at a rate of 12% per annum of the Preferred Stock liquidation
              preference of $2.00 (or $.24 per annum) per share, payable quarterly
              on March 1,
              June 1, September 1 and December 1, in cash or in shares of Common
              Stock having
              an equivalent fair market value. Unpaid dividends on the Company's
              Preferred
              Stock accumulate. In January of each year of 2005 and 2006, the Board
              of
              Directors authorized the issuance of shares of the Company's common
              stock or
              cash, which shall be at the discretion of the Chief Executive Officer
              in order
              to pay the accrued preferred stock dividend. Accrued and unpaid dividends
              at
              December 1, 2006 were $28,897. No dividends shall be declared or paid
              on the
              Common Stock (other than a dividend payable solely in shares of Common
              Stock)
              and no Common Stock shall be purchased, redeemed or acquired by the
              Company
              unless full cumulative dividends on the Preferred Stock have been paid
              or
              declared, or cash or shares of Common Stock have been set aside, which
              is
              sufficient to pay all dividends accrued on the Preferred Stock for
              all past and
              then current dividend periods.
 
 The
            Company has not declared cash dividends on its Common Stock and does
            not intend
            to do so in the foreseeable future. If the Company generates earnings,
            management's policy is to retain such earnings for further business development.
            It plans to maintain this policy as long as necessary to provide funds
            for the
            Company's operations. Any future dividend payments will depend upon the
            full
            payment of Preferred Stock dividends, the Company's earnings, financial
            requirements and other relevant factors, including approval of such dividends
            by
            the Board of Directors.
  The
              Company's Preferred Stock is convertible into shares of Common Stock
              at a rate
              of two shares of Common Stock ( subject to adjustments ) for each share
              of
              Preferred Stock, at the option of the Company, at any time on not less
              than 30
              days' written or published notice to the Preferred Stockholders of
              record, at a
              price $2.00 per share (plus all accrued and unpaid dividends). The
              holders of
              the Preferred Stock have the opportunity to convert shares of Preferred
              Stock
              into Common Stock during the notice period. The Company does not have
              nor does
              it intend to establish a sinking fund for the redemption of the Preferred
              Stock.
              As adjusted, the outstanding shares of Preferred Stock would currently
              be
              converted into fifteen shares of common stock.
 (2)
              SERIES B VOTING CONVERTIBLE PREFERRED STOCK
 
 The
            Company filed a Certificate of Designation of Series B Convertible Preferred
            Stock on January 4, 2006, pursuant to which the Company authorized for
            issuance
            135,000 shares of Series B Preferred Stock, par value $0.10 per share,
            which
            shares are convertible after the earlier of (i) forty-five days after
            the
            conversion of the 8% callable secured convertible notes issued in our
            recent
            financing, or (ii) 12 months after the registration statement filed on
            February
            14, 2006 is declared effective, at a conversion price equal to the volume
            weighted average price of our common stock, as reported by Bloomberg,
            during the
            ten consecutive trading days preceding the conversion date. The holders
            of the
            Series B Preferred Stock shall have the right to vote together with the
            holders
            of the Corporation’s Common Stock, on a 30 votes per share basis (and not as a
            separate class) on all matters presented to the holders of the Common
            Stock. The
            foregoing holders were existing investors before they did the
            exchange.
  (3)
            SERIES C VOTING CONVERTIBLE PREFERRED STOCK
 
 The
            Company filed a Certificate of Designation of Series C Convertible Preferred
            Stock on March 23, 2006, pursuant to which the Company authorized for
            issuance
            300,000 shares of Series C Preferred Stock, par value $0.10 per share,
            which
            shares are convertible after (i) the market price of the Common Stock
            is above
            $1.00 per share; (ii) the Company’s Common Stock is trading on the OTCBB market
            or the AMEX; (iii) the Company is in good standing; (iv) the Company
            must have
            more than 500 stockholders; (v) the Company must have annual revenue
            of at least
            four million dollars; (vi) the Company has at least $100,000 EBITA for
            the
            fiscal year preceding the conversion request. The holders of he Series
            C
            Preferred Stock shall have the right to vote together with the holders
            of the
            Corporation’s Common Stock, on a 30 votes per share basis (and not as a separate
            class), on matters presented to the holders of the Common Stock.
  As
            of
            February 27, 2007, there were approximately 360 shareholders of record
            of the
            Company’s Common Stock, excluding shares held in street name.
 
 As
            of
            February 27, 2007, the following information is provided with respect
            to
            compensation plans (including individual compensation arrangements) under
            which
            equity securities of the Company are authorized for issuance, aggregate
            as
            follows:
 
  15
  **EQUITY
            COMPENSATION PLAN INFORMATION**
   **Plan
                      category**
                  **Number
                      of securities**
                    **to
                      be issued upon**
                    **exercise
                      of**
                    **outstanding
                      options,**
                    **warrants
                      and rights**
                  **Weighted
                      average**
                    **exercise
                      price of**
                    **outstanding
                      options,**
                    **warrants
                      and rights**
                  **Number
                      of securities**
                    **remaining
                      available for future issuance under equity compensation plans
                      (excluding
                      securities reflected in column (a)****(a)**
                  **(b)**
                  **(c)****Equity
                      compensation plans approved by security holders**
                  -0-
                  -0-
                  -0-**Equity
                      compensation plans not approved by security
                      holders**
                  2,708,875
                  $0.17
                  137,348**Total**
                  2,708,875
                  $0.17
                  137,348
  In
            addition to the issuance of options on the basis of individual compensation
            arrangements, some of the foregoing options were issued pursuant to the
            following option plans, none of which have been approved by our stockholders:
 
 ·
                under
                    the 2004 Consultant Stock Plan an aggregate of 1,939,984 options
                    have been
                    issued; ·
                under
                    the 2003 Equity Incentive Plan an aggregate of 1,450,168 options
                    have been
                    issued; and ·
                under
                    the 2002 Plan an aggregate of 472,500 options were
                    issued. 
 **ITEM
            6. MANAGEMENT'S DISCUSSION AND ANALYSIS
            OR PLAN OF
            OPERATION**
 
 The
            following discussion and analysis of financial condition and results
            of
            operations should be read in conjunction with the Company’s consolidated
            financial statements and the accompanying notes thereto included herein,
            and the
            consolidated financial statements included in this Form 10-KSB which
            include
            forward-looking statements.
 
 Forward-looking
            statements involve known and unknown risks, uncertainties and other factors
            which could cause the actual results, performance (financial or operating)
            or
            achievements expressed or implied by such forward-looking statements
            not to
            occur or be realized. The words “expect,” “estimate,” “anticipate,” “predict,”
“believe” and similar expressions and variations thereof are intended to
            identify forward looking statements. These statements appear in a number
            of
            places in this report and include statements regarding the intent, belief
            or
            current expectations of the Company, it directors or its officers with
            respect
            to, among other things, trends affecting the Company’s financial condition or
            results of operations. The readers of this report are cautioned that
            any such
            forward looking statements are not guarantees of future performance and
            involve
            risks and uncertainties that could cause actual results to differ materially.
            Such factors as:
 
 -
            continued historical lack of profitable operations;
 -
            working
            capital deficit;
 -
            the
            ongoing need to raise additional capital to fund operations and growth
            on a
            timely basis;
 - the success of the expansion into the broadband installation and wireless
            infrastructure services and the ability to provide adequate working capital
            required for this expansion,
 and dependence thereon;
 -
            most of
            the Company’s revenue is derived from a selected number of customers
            ;
 -
            the
            ability to develop long-lasting relationships with our customers and
            attract new
 customers;
 -
            the
            competitive environment within the industries in which the Company
            operates;
 -
            the
            ability to attract and retain qualified personnel, particularly the Company’s
            CEO ;
 -
            the
            effect on our financial condition of delays in payments received from
            third
            parties;
 -
            the
            ability to manage a new business with limited management;
 -
            rapid
            technological changes; and
 -
            other
            factors set forth in our other filings with the Securities and Exchange
            Commission.
   16
 
 **OVERVIEW**
  Juniper
            Group, Inc. is a holding company and its business has been composed of
            two
            segments (1) broadband installation and wireless infrastructure services
            and (2)
            film distribution services. Currently film distribution services consist
            of a
            financially insignificant portion of our operations.  The Company operates
            from its Boca Raton, FL office and conducts its business indirectly through
            its
            wholly-owned subsidiaries.
  The
            Company’s current operating focus is though the broadband installation and
            wireless infrastructure services in supporting the growth of its operations
            by
            increasing revenue and managing costs.  These
            services are conducted through Juniper Services, Inc. (“Services”), which is a
            wholly owned subsidiary, of Juniper Entertainment, Inc (“JEI“), which is a
            wholly owned subsidiary of the Company.
 
 Film
            Distribution Services: The film distribution services is conducted through
            Juniper Pictures, Inc ( “Pictures “), a wholly owned subsidiary of Juniper
            Entertainment, Inc. ( “ JEI “ ), a  wholly owned subsidiary of the
            Company.
 
 **KEY
            FACTORS AFFECTING OR POTENTIALLY AFFECTING RESULTS OF OPERATIONS AND
            FINANCIAL
            CONDITIONS**
 
 Statement
            of Financial Accounting Standards No. 133, *”Accounting
            for Derivative Instruments and Hedging Activities”* (SFAS)
            No. 13 requires that due to the indeterminate number of shares which
            might be
            issued under the embedded convertible host debt conversion feature of
            these
            Callable Secured Convertible Notes, the Company is required to record
            a
            liability relating to both the detachable warrants and embedded convertible
            feature of the notes payable (included in the liabilities as a “derivative
            liability”) and to all other warrants and options issued and outstanding as of
            December 28, 2005, except those issued to employees. The result of adjusting
            these derivative liabilities to market generated an unrealized loss for
            the year
            ended December 31, 2006 and December 31, 2005 of approximately $72,500
            and
            $920,000, respectively.
 
 On
            December 30, 2005, Juniper Services entered into a binding Letter of
            Intent with
            New Wave providing for the purchase by Juniper Services of all outstanding
            shares of New Wave. New Wave’s business is the deployment, construction and
            maintenance of wireless communications towers and related equipment.
            We, through
            Juniper Services, agreed to pay New Wave $817,000 as follows: $225,000
            in cash
            and $592,000 paid by the issuance of 19,734 shares of Series B Voting
            Preferred
            Stock. On March 16, 2006, Juniper Services consummated the acquisition
            of New
            Wave by entering into a Stock Exchange Agreement and Plan of Reorganization
            with
            New Wave. This is a direct complement to the Company’s existing broadband
            installation and wireless infrastructure business.
  We
            reserve against receivables from customers whenever it is determined
            that there
            may be operational, corporate or market issues that could eventually
            offset the
            stability or financial status of these customers or payments to us. There
            is no
            assurance that we will be successful in obtaining additional financing
            for these
            efforts, nor can it be assured that our services will continue to be
            provided
            successfully, or that customer demand for our services will continue
            to be
            strong despite anticipated customer workloads through 2006.
 
 **Restatement:**
 
 During
            the year ended December, 2006, it was determined that the correct application
            of
            accounting principles had not been applied in 2005 and 2004 for equity
            instruments issued to consultants for services. During 2005 and 2004
            certain
            options issued to consultants as consideration for goods or services
            were not
            charged to stock-based compensation expense. The Company used the Black-Scholes
            option-pricing model to determine the fair value of grants made for the
            years
            ended December 31, 2005 and 2004. The financial statements have been
            restated to
            reflect a charge to stock-based compensation expense of $3,150 for the
            year
            ended December 31, 2005.
 
 The
            restatement for the fair value of the options has no effect on the Company’s
            actual or reported cash flow. The restatement does, however, affect the
            Company’s stated net income and loss per share for the years ended December 31,
            2005. The impact of this correction through December 31, 2005 is to increase
            additional paid in capital by $506,439 and to increase accumulated deficit
            by
            $506,439. The stock-based compensation expense is not deductible for
            tax
            purposes. As a result, this adjustment has no effect on the Company’s net
            operating loss carryforward or deferred tax asset.
 
 Subsequently,
            as discussed elsewhere in this document, the Company received $1,545,000
            from
            the sale of 7% Convertible Debentures and $500,000 from the sale of 8%
            Callable
            Secured Convertible Promissory Notes during the two years ended December
            31,
            2005. In connection with these notes, the Company issued common stock
            purchase
            warrants. The Company had determined a debt discount and additional paid-in
            capital of $376,280 should have been recorded for the portion of the
            proceeds
            allocated to the fair value of the warrants. This discount was to be
            amortized
            over the two and five-year terms of the notes and charged to interest
            expense.
            The financial statements were restated to reflect this debt discount,
            the
            related amortization expense and additional paid-in capital. The additional
            amortization increased the net loss by $41,970 for the year ended December
            31,
            2005.
 
 However,
            as also discussed in Note 6 to the accompanying financial statements,
            the
            Company further determined that due to the indeterminate number of shares
            which
            might be issued under the embedded convertible host debt conversion feature
            of
            the 8% Callable
            Secured Convertible Notes ,
            the
            Company is required to record a liability relating to both the detachable
            warrants and embedded convertible feature of the callable
            secured convertible notes payable
            (included in the liabilities as a “derivative liability”) and show the changes
            in the value of these embedded derivative liabilities as a component
            of its
            consolidated net income (loss). As a result, a subsequent restatement
            of the
            Company’s financial statements was required to reflect this change.
   17
 
 The
            restatements for the interim periods ended March 31, 2006, June 30, 2006
            and
            September 30, 2006 and the year ended December 31, 2005 and the interim
            periods
            therein are summarized as follows:
    **Balance
            Sheet**
  March
                    31, 2006
                  June
                      30, 2006
                  September
                      30, 2006Previously
                    reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedTotal
                      assets
                  
                  $
                  1,983,768
                  
                  $
                  1,983,768
                  
                  $
                  2,064,688
                  
                  $
                  2,064,688
                  
                  $
                  2,349,741
                  
                  $
                  2,053,891Notes
                      payable - long term (net of discount)
                  
                  
                  527,006
                  
                  
                  147,369
                  
                  
                  534,343
                  
                  
                  247,950
                  
                  
                  532,505
                  
                  
                  313,328Derivative
                      liabilities
                  
                  
                  
                  
                  
                  1,740,779
                  
                  
                  
                  
                  
                  6,271,114
                  
                  
                  
                  
                  
                  1,711,803Total
                      liabilities
                  
                  
                  2,490,646
                  
                  
                  3,851,788
                  
                  
                  2,756,465
                  
                  
                  8,723,749
                  
                  
                  3,043,143
                  
                  
                  4,667,687Additional
                      paid-in capital
                  
                  
                  21,733,351
                  
                  
                  22,174,592
                  
                  
                  21,733,351
                  
                  
                  22,174,592
                  
                  
                  22,747,990
                  
                  
                  22,174,592Accumulated
                      deficit
                  
                  
                  (25,465,833
                  )
                  
                  (27,268,216
                  )
                  
                  (25,650,732
                  )
                  
                  (32,059,257
                  )
                  
                  (26,666,996
                  )
                  
                  (28,013,992
                  )Total
                      shareholders' equity
                  
                  
                  (506,878
                  )
                  
                  (1,868,020
                  )
                  
                  (691,777
                  )
                  
                  (6,659,061
                  )
                  
                  (693,402
                  )
                  
                  (2,613,796
                  )Total
                      liabilities and shareholders' equity
                  
                  $
                  1,983,768
                  
                  $
                  1,983,768
                  
                  $
                  2,064,688
                  
                  $
                  2,064,688
                  
                  $
                  2,349,741
                  
                  $
                  2,053,891**Statement
                      of Operations**Three
                      Months Ended
                  Three
                      Months Ended
                  Three
                      Months Ended**Three
                      Months:**
                  
                  March
                      31, 2006
                  June
                      30, 2006
                  September
                      30, 2006Previously
                    reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  57,891
                  
                  $
                  57,891
                  
                  $
                  61,674
                  
                  $
                  61,674
                  
                  $
                  81,654
                  
                  $
                  81,654Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  45,753
                  
                  
                  
                  
                  
                  72,827
                  
                  
                  2,432
                  
                  
                  69,647Stock-based
                      compensation expenseUnrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  (21,001
                  )
                  
                  
                  
                  
                  4,530,336
                  
                  
                  
                  
                  
                  (4,559,312
                  )Net
                      loss
                  
                  $
                  (380,138
                  )
                  $
                  (404,891
                  )
                  $
                  (183,378
                  )
                  $
                  (4,786,541
                  )
                  $
                  (149,461
                  )
                  $
                  4,046,786Loss
                      per share, basic and diluted
                  
                  $
                  (0.027
                  )
                  $
                  (0.028
                  )
                  $
                  (0.013
                  )
                  $
                  (0.329
                  )
                  $
                  (0.010
                  )
                  $
                  (0.015
                  )Six Months Ended
                  Nine
                      Months Ended**Cumulative:**
                  
                  June
                      30, 2006
                  September
                      30, 2006Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  119,565
                  
                  $
                  119,565
                  
                  $
                  201,219
                  
                  $
                  201,219Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  121,559
                  
                  
                  11,754
                  
                  
                  191,206Stock-based
                      compensation expenseUnrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  4,509,336
                  
                  
                  
                  
                  
                  (49,977
                  )Net
                      loss
                  
                  $
                  (563,516
                  )
                  $
                  (5,194,411
                  )
                  $
                  (722,299
                  )
                  $
                  (1,147,624
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.039
                  )
                  $
                  (0.357
                  )
                  $
                  (0.051
                  )
                  $
                  (0.080
                  )
 
 
  18
    Balance
            Sheet
 
 March
                      31, 2005
                  June
                      30, 2005
                  September
                      30, 2005
                  December
                      31, 2005Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedTotal
                      assets
                  
                  $
                  3,573,243
                  
                  $
                  3,573,243
                  
                  $
                  2,992,454
                  
                  $
                  2,992,454
                  
                  $
                  2,935,866
                  
                  $
                  2,935,866
                  
                  $
                  1,123,991
                  
                  $
                  1,123,991Notes
                      payable - long term (net of discount)
                  
                  
                  1,439,682
                  
                  
                  1,186,253
                  
                  
                  1,545,000
                  
                  
                  1,296,154
                  
                  
                  475,000
                  
                  
                  444,797
                  
                  
                  300,000
                  
                  
                  24,610Derivative
                      liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,461,779Total
                      liabilities
                  
                  
                  3,061,727
                  
                  
                  2,779,339
                  
                  
                  3,244,536
                  
                  
                  2,968,252
                  
                  
                  1,895,536
                  
                  
                  1,839,417
                  
                  
                  2,001,412
                  
                  
                  3,210,612Additional
                      paid-in capital
                  
                  
                  21,066,523
                  
                  
                  21,906,487
                  
                  
                  21,148,124
                  
                  
                  21,986,655
                  
                  
                  23,597,891
                  
                  
                  24,460,277
                  
                  
                  21,571,050
                  
                  
                  22,162,291Accumulated
                      deficit
                  
                  
                  (20,608,602
                  )
                  
                  (21,147,931
                  )
                  
                  (21,456,156
                  )
                  
                  (21,998,635
                  )
                  
                  (22,637,347
                  )
                  
                  (23,422,324
                  )
                  
                  (25,082,999
                  )
                  
                  (26,861,804
                  )Total
                      shareholders' equity
                  
                  
                  511,516
                  
                  
                  793,904
                  
                  
                  242,082
                  
                  
                  24,202
                  
                  
                  1,011,565
                  
                  
                  1,096,449
                  
                  
                  (877,421
                  )
                  
                  (2,086,621
                  )Total
                      liabilities and shareholders' equity
                  
                  $
                  3,573,243
                  
                  $
                  3,573,243
                  
                  $
                  2,992,454
                  
                  $
                  2,992,454
                  
                  $
                  2,935,866
                  
                  $
                  2,935,866
                  
                  $
                  1,123,991
                  
                  $
                  1,123,991
 
    
 **Statements
                      of Operations**Three
                      Months Ended
                  Three
                      Months Ended
                  Three
                      Months EndedMarch
                      31, 2005
                  June
                      30, 2005
                  September
                      30, 2005Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  37,325
                  
                  $
                  37,325
                  
                  $
                  39,787
                  
                  $
                  76,750
                  
                  $
                  45,022
                  
                  $
                  45,022Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  18,218
                  
                  
                  
                  
                  
                  20,333
                  
                  
                  
                  
                  
                  242,498Stock-based
                      compensation expense
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  -Unrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (920,301
                  )Net
                      loss
                  
                  $
                  (407,396
                  )
                  $
                  (425,619
                  )
                  $
                  (847,554
                  )
                  $
                  869,516
                  
                  $
                  (1,181,190
                  )
                  $
                  (1,423,688
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.0420
                  )
                  $
                  (0.0440
                  )
                  $
                  (0.0820
                  )
                  $
                  (0.0842
                  )
                  $
                  (0.0700
                  )
                  $
                  (0.0867
                  )Six
                      Months Ended
                  Nine
                      Months Ended
                  Year
                      Ended**Cumulative:**
                  
                  June
                      30, 2005
                  September
                      30, 2005
                  December
                      31, 2005Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  77,112
                  
                  $
                  77,112
                  
                  $
                  122,134
                  
                  $
                  122,134
                  
                  $
                  139,178
                  
                  $
                  139,178Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  38,551
                  
                  
                  
                  
                  
                  281,049
                  
                  
                  
                  
                  
                  263,261Stock-based
                      compensation expense
                  
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  (3,150
                  )Unrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (920,301
                  )Net
                      loss
                  
                  $
                  (1,254,950
                  )
                  $
                  (1,293,609
                  )
                  $
                  (2,436,140
                  )
                  $
                  (2,720,339
                  )
                  $
                  (4,881,793
                  )
                  $
                  (6,069,680
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.126
                  )
                  $
                  (0.130
                  )
                  $
                  (0.200
                  )
                  $
                  (0.224
                  )
                  $
                  (0.260
                  )
                  $
                  (0.280
                  )
 
 
 
 
  
  19
  **RESULTS
            OF OPERATIONS**
 
 Results
            of operations for year ended December 31, 2006 vs. December 31,
            2005
 
 Executive
            Overview of Financial Results
  The
            Company is currently utilizing its resources to build the broadband installation
            and wireless infrastructure services, and has not devoted resources toward
            the
            promotion and solicitation of its film licenses. In 2005, the business
            of
            supporting Broadband customer services was winding down and eventually
            ceased,
            It is not contextual to directly compare the results of those operations
            to the
            broadband installation and wireless infrastructure services business
            conducted
            in 2006.
  **NET
            INCOME (LOSS)**
  Net
            loss
            available to common stockholders was approximately $(1,742,000), or $(0.12)
            per
            diluted net loss per share on revenue of approximately $4,681,000 for
            the year
            ended December 31, 2006 compared with net loss of approximately $(6,070,000),
            or
            $(0.33) per diluted net loss per share on revenue of approximately $581,000
            for
            the year ended December 31, 2005. This represents a 706% increase in
            revenue and
            a 71% decrease in net losses.
 
 **REVENUES**
  The
            broadband installation and wireless infrastructure services and the film
            distribution services recognized revenue of approximately $4,681,000 for
            the period ended December 31, 2006 compared to approximately $580,500
            for the
            period ended December 31, 2005, an increase of approximately $4,100,500.
            The
            increase in revenue was predominantly attributable to the acquisition
            of New
            Wave.  The film distribution services realized $6,600 for the period ended
            December 31, 2006.
 
 The
            factors contributing to the increase in revenue for the year ended December
            31,
            2006 was largely attributed to the acquisition of New Wave Communications,
            Inc.
            in  2006.
 
 **OPERATING
            COSTS**
 
 The
            broadband installation and wireless infrastructure and film distribution
            services incurred operating costs of approximately $3,416,000 (73% of
            revenue) for the period ended December 31, 2006, compared to approximately
            $515,000 (89% of revenue) for the period ended December 30, 2005, a decrease
            as
            a percentage of revenue of 16% Other operating costs were attributable to
            the acquisition of New Wave. No operating costs were attributable to
            film
            distribution services for period ended December 31, 2006, compared to
            approximately $28,000 (5% of revenue) for the period ended December 31,
            2005.
  **GROSS
            PROFIT**
 
 The
            Company’s gross profit margin for the period ended December 31, 2006 was
            approximately $1,265,000 representing 27% of revenue, compared to approximately
            $66,000 gross profit margin for the period ended December 31,2005 representing
            11.2% of revenue.
 
 **HOLDING
            COMPANY (JUNIPER GROUP)**
 
 Operating
            Expense
  The
              Holding Company does not have any income producing operating assets.
              As such,
              the operating loss was equal to operating expense. Operating expense
              consists
              primarily of employee compensation, legal, accounting and consulting
              fees and
              ordinary and customary office expenses. Operating expenses for the
              year ended
              December 31, 2006 were $1,375,000 compared to $1,897,000 for the year
              ended
              December 31, 2005, an decrease of $552, 000 or 28%. The decrease was
              due mainly
              to the reduction of general and administrative expenses incurred in
              2005 with
              the wind down of the Company’s services to wireless and cable companies in
              residential and business subscribers.
  Interest
            Expense
 
 Interest
            expense and related charges such as amortization of debt discount and
            loss on
            adjustment of derivative and warrant liabilities to fair value aggregated
            $454,000 for the year ended December 31, 2006, compared to $1,323,000
            for year
            ended December 31, 2005, an decrease of $869,000 or 67%, due primarily
            to the
            change in the value of the Company’s common shares which affect the value of the
            derivative and warrant liabilities.
 
 Revaluation
            of Film Licenses
 
 The
            Company reevaluated the value of its film library in 2006 and 2005, based
            primarily on management’s estimate of the discounted net present value of the
            future revenue stream of its film titles by $296,000 in 2006 and $1,897,000
            in
            2005.
  **LIQUIDITY
            AND CAPITAL RESOURCES**
 
 At December
            31, 2006, we had a working capital deficit of approximately ($1,632,000),
            compared to a working capital deficit of approximately ($1,139,000) at
            December
            31, 2005. The ratio of current assets to current liabilities was 0.39:1
            at December 31, 2006, and 0.31:1 at December 31, 2005. Cash flow used
            for operations during 2006 was $162,000,
 
 The
            Company did not have sufficient cash to pay for the cost of its operations
            or to
            pay its current debt obligations. The Company raised $200,000, through
            the sale
            of 7% Convertible Debentures, $500,000 through the sale of 8% Callable
            Secured
            Convertible Debentures and $325,000 through Security Purchase Agreement
            for
            working capital, capital purchases and for the payment of debt to date.
            Our
            operations during 2006 were funded by the sale of convertible debentures
            totaling $300,000. Among the obligations that the Company has not had
            sufficient
            cash to pay its payroll, payroll taxes and the funding of its subsidiary
            operations. Certain employees and consultants have agreed, from time
            to time, to
            receive the Company’s common stock in lieu of cash. In these instances, the
            Company has determined the number of shares to be issued to employees
            and
            consultants based upon the unpaid compensation and the current market
            price of
            the stock. Additionally, the Company registers these shares so that the
            shares
            can immediately be sold in the open market.
 
 With
            regard to the balance of the past due payroll taxes, a plan of payment
            has been
            negotiated with New York State and is currently being negotiated with
            the
            Internal Revenue Service. The Company has entered into agreements for
            substantially all the outstanding balances, whereas the Company shall
            pay
            approximately $11,125 per month.
 
 The
            fact
            that the Company continued to sustain losses in 2006, had negative working
            capital at December 31, 2006 and still requires additional sources of
            outside
            case to sustain operations, continued to crease uncertainty about the
            Company’s
            ability to continue as a going concern.
  We
            believe that we will not have sufficient liquidity to meet our operating
            cash requirements for the current level of operations during the remainder
            of
            2007. We have received the first of two planned rounds of financing and
            the
            investor is obligated to purchase additional callable secured notes in
            the
            aggregate amount of $500,000. In addition, any event of default such
            as our
            failure to repay the principal or interest when due, our failure to issue
            shares
            of common stock upon conversion by the holder, our failure to timely
            file a
            registration statement or have such registration statement declared effective,
            or breach of any covenant, representation or warranty in the Securities
            Purchase
            Agreement would have an impact on our ability to meet our operating
            requirements. We anticipate that the full amount of the callable secured
            convertible notes will be converted into shares of our common stock,
            in
            accordance with the terms of the callable secured convertible notes.
            If we are
            required to repay the callable secured convertible notes, we would be
            required
            to use our limited working capital and raise additional funds. If we
            were unable
            to repay the notes when required, the note holders could commence legal
            action
            against us and foreclose on all of our assets to recover the amounts
            due. Any
            such action would require us to curtail or cease operations. Our ability
            to
            continue as a going concern is dependent upon receiving additional funds
            either
            through the issuance of debt or the sale of additional common stock and
            the
            success of management's plan to expand operations. Although we may obtain
            external financing through the sale of our securities, there can be no
            assurance that such financing will be available, or if available, that
            any such
            financing would be on terms acceptable to us. If we are unable to fund our
            cash flow needs, we may have to reduce or stop planned expansion or scale
            back
            operations and reduce our staff.
 
 We
            currently have a bank line of credit promissory note due November 2,
            2007 of $100,000 of which the Company has used $46,000 at an interest
            rate of
            7.75%.
 
 **SEASONALITY**
 
 The
            provision of services for broadband installation and wireless infrastructure
            deployment is affected by adverse weather conditions and the spending
            patterns
            of our customers, exposing us to variable quarterly results. Inclement
            weather
            may lower the demand for our services in the winter months, as well as
            other
            times of the year. Furthermore, the weather can delay the completion
            of projects
            already started in addition to delaying the commission of new projects.
            Therefore, we cannot predict that the financial results for any particular
            quarter will be the same for any other quarter.
  Natural
            catastrophes such as the recent hurricanes in the United States could
            also have
            a negative impact on the economy overall and on our ability to perform
            outdoor
            services in affected regions or utilize equipment and crew stationed
            in those
            regions, which in turn could significantly impact the results of any
            one or more
            reporting periods. However, these natural catastrophes historically have
            generated additional revenue subsequent to the event.
   
 20
 **INFLATION**
  We
            believe that inflation has generally not had a material impact on our
            operations.
 
 **BACKLOG**
 
 None
  **FINANCING**
 
 The
            Company entered into a Securities Purchase Agreement with New Millennium
            Capital
            Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and
            AJW
            Partners, LLC on December 28, 2005 for the sale of (i) $1,000,000 in
            Callable
            Secured Convertible Notes and (ii) warrants to buy 1,000,000 shares of
            our
            common stock and on March 14, 2006 for the sale of (i) $300,000 in callable
            secured convertible notes and (ii) stock purchase warrants to buy 7,000,000
            shares of our common stock.  The Company, to date, has sold $800,000 in
            callable convertible notes and an additional $500,000 in callable secured
            notes
            is expected to be sold following the Registration Statement being declared
            effective. In order to obtain the additional $500,000 we will need to
            ensure the
            satisfaction of the following conditions:
 
 ·
                  we
                      shall have delivered to the investors the additional debentures
                      and
                      warrants,
 ·
                  the
                      representations and warranties made by us in the Securities
                      Purchase
                      Agreement shall be true and correct in all material respects
                      and we shall
                      have performed, satisfied and complied in all material respects
                      with the
                      covenants, agreements and conditions required by the Securities
                      Purchase
                      Agreement,
 ·
                  no
                      litigation, statute, rule, regulation, executive order, decree,
                      ruling or
                      injunction shall have been enacted, entered, promulgated or
                      endorsed by or
                      in any court or governmental authority of competent jurisdiction
                      or any
                      self-regulatory organization having authority over the matters
                      contemplated hereby which prohibits the consummation of the
                      transactions
                      contemplated by the Securities Purchase
                      Agreement,
 ·
                  no
                      event shall have occurred which could reasonably be expected
                      to have a
                      material adverse effect on us,
 ·
                  the
                      trading of our common stock on the OTCBB shall not have been
                      suspended,
 ·
                  the
                      investors shall have received an opinion of our counsel,
                      and
 ·
                  the
                      investors shall have received an officer’s certificate from
                      us.
 
 The
            Callable Secured Convertible Notes bear interest at 8%, mature on January
            15,
            2009 with respect to the initial $500,000 and on March 14, 2009 with
            respect to
            $300,000, and are convertible into our common stock, at the investors'
            option,
            at the lower of (i) $0.05 or (ii) 50% of the average of the three lowest
            intraday trading prices for the common stock on a principal market for
            the 20
            trading days before but not including the conversion date. The full principal
            amount of the Callable Secured Convertible Notes is due upon default
            under their
            terms. The initial 1,000,000 warrants are exercisable until five years
            from the
            date of issuance at a purchase price of $0.13 per share and the subsequent
            7,000,000 warrants are exercisable until five years from the date of
            issuance at
            a purchase price of $0.10 per share. In addition, the conversion price
            of the
            Callable Secured Convertible Notes and the exercise price of the warrants
            will
            be adjusted in the event that we issue common stock at a price below
            the fixed
            conversion price, below market price, with the exception of any securities
            issued in connection with the Securities Purchase Agreement. The conversion
            price of the Callable Secured Convertible Notes and the exercise price
            of the
            warrants may be adjusted in certain circumstances such as if we pay a
            stock
            dividend, subdivide or combine outstanding shares of common stock into
            a greater
            or lesser number of shares, or take such other actions as would otherwise
            result
            in dilution of the selling stockholder's position. The selling stockholders
            have
            contractually agreed to restrict their ability to convert or exercise
            their
            warrants and receive shares of our common stock such that the number
            of shares
            of common stock held by them and their affiliates after such conversion
            or
            exercise does not exceed 4.99% of the then issued and outstanding shares
            of
            common stock. In addition, we have granted the investors a security interest
            in
            substantially all of our assets and registration rights.
 
 The
            proceeds received from the sale of the callable secured convertible notes
            have
            been, and will continue to be, used to pay for Juniper Services, Inc.
            business
            development purposes, working capital needs, payment of certain past
            due taxes,
            payment of consulting, legal fees and repayment of certain debts.
 
 We
            will
            still need additional investments in order to continue operations to
            cash flow
            break even. Additional investments, including $500,000 to be received
            under the
            Securities Purchase Agreement should our registration statement that
            we filed be
            declared effective, are being sought, but we cannot guarantee that we
            will be
            able to obtain such investments. Financing transactions may include the
            issuance
            of equity or debt securities, obtaining credit facilities, or other financing
            mechanisms. However, the trading price of our common stock and the downturn
            in
            the U.S. stock and debt markets could make it more difficult to obtain
            financing
            through the issuance of equity or debt securities. Even if we are able
            to raise
            the funds required, it is possible that we could incur unexpected costs
            and
            expenses, fail to collect significant amounts owed to us, or experience
            unexpected cash requirements that would force us to seek alternative
            financing.
            Further, if we issue additional equity or debt securities, stockholders
            may
            experience additional dilution or the new equity securities may have
            rights,
            preferences or privileges senior to those of existing holders of our
            common
            stock. If additional financing is not available or is not available on
            acceptable terms, we will have to reduce staff and curtail our
            operations.
   21
  **CRITICAL
            ACCOUNTING POLICIES AND USE OF ESTIMATES**
  Our
            financial statements are prepared in accordance with accounting principles
            generally accepted in the United States of America. The following policies,
            we
            believe, are our most critical accounting policies, are important to
            our
            financial position and results of operations, and require significant
            judgment
            and estimates on the part of management. Those policies, that in the
            belief of
            management are critical and require the use of judgment in their application,
            are disclosed on Form 10KSB for the year ended December 31, 2006. Since
            December  31, 2006, there have been no material changes to our critical
            accounting policies.
  We
            have
            identified the following policies as critical to our business and the
            understanding of its results of operations The impact of these policies
            is
            discussed throughout Management’s Discussion and Analysis of Financial Condition
            and Results of Operations where these policies affect reported and anticipated
            financial results. Preparation of this report requires our use of estimates
            and
            assumptions that affect the reported amounts of assets, liabilities,
            disclosure
            of contingent assets and liabilities at the date of the consolidated
            financial
            statements, and the reported revenue and expense amounts for the periods
            being
            reported. On an ongoing basis, we evaluate these estimates, including
            those
            related to the valuation of accounts receivable, and the potential impairment
            of
            long lived assets. We base the estimates on historical experience and
            on various
            other assumptions that are believed to be reasonable, the results of
            which forms
            the basis for making judgments about the carrying values of assets and
            liabilities that are not readily apparent from other sources. Actual
            results may
            differ from these estimates.
  **USE
            OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS**
 
 The
            preparation of financial statements in conformity with generally accepted
            accounting principles requires management to make estimates and assumptions
            that
            affect the reported amounts of assets and liabilities and disclosure
            of
            contingent assets and liabilities at the date of the financial statements
            and
            the reported amounts of revenues and expenses during the reporting period.
            Actual results could differ from those estimates.
 
 Management
            believes the following critical accounting policies affect its more significant
            judgments and estimates used in the preparation of its consolidated financial
            statements.
 
 **REVENUE
            RECOGNITION**
 
 We
            follow
            the guidance in the Securities and Exchange Commission’s Staff Accounting
            Bulletin no. 101, “revenue recognition” (“SAB 101”). We have revenue recognition
            policies for its various operating segments, which are appropriate to
            the
            circumstances of each business. Revenue is recognized when all of the
            following
            conditions exist: persuasive evidence of an arrangement exists; services
            have
            been rendered or delivery occurred; the price is fixed or determinable;
            and
            collectibility is reasonably assured. The cost of operations for the
            broadband
            installation and wireless infrastructure segment is reflected in the
            statement
            of operations using the completed contract method. Accordingly, any contracts
            that have estimated costs that are greater than the contacted revenue
            will
            accrue a loss for us under these contracts.
  Revenue
            from licensing agreements is recognized when the license period begins
            and the
            licensee and the Company become contractually obligated under a noncancellable
            agreement. All revenue recognition for license agreements is in compliance
            with
            the AICPA’s Statement of Position 00-2, Accounting by Producers or Distributors
            of Films.
 
 For
            our
            broadband installation and wireless infrastructure segment, we record
            reductions
            to revenues for estimated future chargebacks. These estimates are based
            upon
            historical return experience and projections of customer acceptance of
            our
            services. If we underestimate the level of chargebacks in a particular
            period,
            we may record less revenue in later periods when returns exceed the predicted
            amount. Conversely, if we overestimate the level of returns for a period,
            we may
            have additional revenue in later periods when returns are less than
            predicted.
 
 **ACCOUNTS
            RECEIVABLE**
  Valuation
            of Accounts Receivable Collectibility of accounts receivable is evaluated
            for
            each subsidiary based on the subsidiary’s industry and current economic
            conditions. Other factors include analysis of historical bad debts, projected
            losses, and current past due accounts.
  **GOODWILL
            AND OTHER INTANGIBLE ASSETS:**
 
 We
            have
            adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill
            and Other Intangible Assets”. In making this assessment, management relies on a
            number of factors including operating results, business plans, economic
            projections, anticipated future cash flows, and transactions and market
            place
            data. There are inherent uncertainties related to these factors and management’s
            judgment in applying them to the analysis of goodwill impairment. Since
            management’s judgment is involved in performing goodwill and other intangible
            assets valuation analyses, there is a risk that the carrying value of
            the
            goodwill and other intangible assets may be overstated or
            understated.
 
 We
            have
            elected to perform the annual impairment test of recorded goodwill and
            intangible assets as required by SFAS 142.  We recognized impairment based
            upon the piracy of the film library in 2005 and the future revenue anticipated
            from the sale of its films.
  **IMPAIRMENT
            OF LONG-LIVED ASSETS:**
 
 We
            evaluate the recoverability of our long lived assets in accordance with
            Statement of Financial Accounting Standards No. 144, “Accounting for the
            Impairment or Disposal of Long Lived Assets,” which generally requires us to
            assess these assets for recoverability whenever events or changes in
            circumstance indicate that the carrying amounts of such assets may not
            be
            recoverable. We consider historical performance and future estimated
            results
            in our evaluation of potential impairment and then compare the carrying
            amount of the asset to the estimated nondiscounted future cash flows
            expected to
            result from the use of the asset. If such assets are considered to be
            impaired,
            the impairment recognized is measured by comparing projected individual
            segment
            discounted cash flows to the asset segment carrying values. The estimation
            of
            fair value is measured by discounting expected future cash flows at the
            discount
            rate we utilize to evaluate potential investments. Actual results may
            differ
            from these estimates and as a result the estimation of fair value may
            be
            adjusted in the future.
   22
  **FILM
            LICENSES**
  Film
            costs are stated at the lower of estimated net realizable value determined
            on an
            individual film basis, or cost, net of amortization. Film costs represent
            the
            acquisition of film rights for cash and guaranteed minimum
            payments.
 
 If
            the
            net resalable value of our film licenses is significantly less than management’s
            estimate, it could have a material affect on our financial
            condition.
 
 We
            expense the cost of film rights over the film life cycle based upon the
            ratio of
            the current period’s gross revenues to the estimated remaining total gross
            revenues. These estimates are calculated on an individual production
            basis for
            film. Estimates of total gross revenues can change significantly due
            to a
            variety of factors, including the level of market acceptance of the production
            and trends in consumer behavior, and potential pirating.
 
 For
            acquired film libraries, remaining revenues include amounts to be earned
            for up
            to twenty years from the date of acquisition. Accordingly, revenue estimates
            are
            reviewed periodically and are revised if necessary. A change in revenue
            projections could have an impact on our results of operations. Costs
            of film are
            subject to valuation adjustments pursuant to applicable accounting rules.
            We
            have recently revised the value of our film library by approximately
            61% of its
            carry value and may revise the value in the future.  The net realizable
            value of the licenses and rights are reviewed by management annually.
            Estimated
            values are based upon assumptions about future demand and market conditions.
            If
            actual demand or market conditions or impairment indicators arise that
            are less
            favorable than our projections, film write-downs may be required.
 
 **NEW
            ACCOUNTING PRONOUNCEMENTS**
 
 In
            November 2004, the FASB issued Statement of Financial Accounting Standards
            ("SFAS") No. 151 "Inventory Costs." This statement amends Accounting
            Research
            Bulletin No. 43, Chapter 4, "Inventory Pricing" and removes the "so abnormal"
            criterion that under certain circumstances could have led to the capitalization
            of these items. SFAS No. 151 requires that idle facility expense, excess
            spoilage, double freight and re-handling costs be recognized as current-period
            charges regardless of whether they meet the criterion of "so abnormal."
            SFAS 151
            also requires that allocation of fixed production overhead expenses to
            the costs
            of conversion be based on the normal capacity of the production facilities.
            The
            provisions of this statement are effective for all
 fiscal
            years beginning after June 15, 2005.
 
 In
            December 2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based
            Compensation" ("SFAS No. 123(R)"). SFAS No. 123(R) establishes standards
            for the
            accounting for transactions in which an entity exchanges its equity instruments
            for goods or services. This statement focuses primarily on accounting
            for
            transactions in which an entity obtains employee services in share-based
            payment
            transactions. SFAS No. 123(R) requires that the fair value of such equity
            instruments be recognized as an expense in the historical financial statements
            as services are performed. Prior to SFAS No. 123(R), only certain pro
            forma
            disclosures of fair value were required. The provisions of this statement
            are
            effective for small business filers the first interim reporting period
            that
            begins after December 15, 2005.
 
 On
            December 16, 2004, the FASB issued SFAS No. 153, "Exchange of Non-monetary
            Assets", an amendment of Accounting Principles Board ("APB") Opinion
            No. 29,
            which differed from the International Accounting Standards Board's ("IASB")
            method of accounting for exchanges of similar productive assets. Statement
            No.
            153 replaces the exception from fair value measurement in APB No. 29,
            with a
            general exception from fair value measurement for exchanges of non-monetary
            assets that do not have commercial substance. A non-monetary exchange
            has
            commercial substance if the future cash flows of the entity are expected
            to
            change significantly as a result of the exchange. The statement is to
            be applied
            prospectively and is effective for non-monetary asset exchanges occurring
            in
            fiscal periods beginning after June 15, 2005.
 
 In
            December 2004, the FASB issued SFAS No. 123(R), “Accounting for Stock-Based
            Compensation“ ("SFAS No. 123(R)"). SFAS No. 123(R) establishes standards for the
            accounting for transactions in which an entity exchanges its equity instruments
            for goods or services. This statement focuses primarily on accounting
            for
            transactions in which an entity obtains employee services in share-based
            payment
            transactions. SFAS No. 123(R) requires that the fair value of such equity
            instruments be recognized as an expense in the historical financial statements
            as services are performed. Prior to SFAS No. 123(R), only certain pro
            forma
            disclosures of fair value were required. The provisions of this statement
            are
            effective for small business filers the first interim reporting period
            that
            begins after December 15, 2005.
  In
            May
            2005, the FASB issued Statement SFAS No. 154 “Accounting Changes and Error
            Corrections” (SFAS 154) which supersedes APB Opinion No. 20, Accounting Changes”
and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.
            SFAS 154 provides guidance on the accounting for and reporting of accounting
            changes and error corrections. It establishes, unless impracticable,
            retrospective application as the required method for reporting a change
            in
            accounting principle in the absence of explicit transition requirements
            specific
            to the newly adopted accounting principle. The correction of an error
            in
            previously issued financial statements is not an accounting change. However,
            the
            reporting of an error correction involves adjustments to previously issued
            financial statements similar to those generally applicable to reporting
            an
            accounting change retroactively. Therefore, the reporting of a correction
            of an
            error by restating previously issued financial statements is also addressed
            by
            this Statement. SFAS 154 is effective for accounting changes and corrections
            of
            errors made in fiscal years beginning after December 15, 2005. The Company
            is in
            the process of determining the impact of SFAS 154 on its consolidated
            results of
            operations and financial condition.
   23
 
 On
            February 16, 2006 the Financial Accounting Standards Board (FASB) issued
            SFAS
            155, "Accounting for Certain Hybrid Instruments," which amends SFAS 133,
            "Accounting for Derivative Instruments and Hedging Activities," and SFAS
            140,
            "Accounting for Transfers and Servicing of Financial Assets and Extinguishments
            of Liabilities." SFAS 155 allows financial instruments that have embedded
            derivatives to be accounted for as a whole (eliminating the need to bifurcate
            the derivative from its host) if the holder elects to account for the
            whole
            instrument on a fair value basis. SFAS 155 also clarifies and amends
            certain
            other provisions of SFAS 133 and SFAS 140. This statement is effective
            for all
            financial instruments acquired or issued in fiscal years beginning after
            September 15, 2006. The Company does not expect its adoption of this
            new
            standard to have a material impact on its financial position, results
            of
            operations or cash flows.
  In
            March
            2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
            of
            Financial Assets - an amendment to FASB Statement No. 140. Statement
            156
            requires that an entity recognize a servicing asset or servicing liability
            each
            time it undertakes an obligation to service a financial asset by entering
            into a
            service contract under certain situations. The new standard is effective
            for
            fiscal years beginning after September 15, 2006. The Company does not
            expect its
            adoption of this new standard to have a material impact on its financial
            position, results of operations or cash flows.
 
 In
            September, 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
            defines fair value, establishes a framework for measuring fair value
            in
            generally accepted accounting principles (GAAP), and expands disclosures
            about
            fair value measurements. This Statements applies under other accounting
            pronouncements that require or permit fair value measurements, the Board
            having
            previously concluded in those accounting pronouncements that fair value
            is the
            relevant measurement attribute. Accordingly, this Statement does not
            require any
            new fair value measurements. However, for some entities, the application
            of this
            Statement will change current practice. This Statement is effective for
            financial statements issued for fiscal years beginning after November
            15, 2007,
            and interim periods within those fiscal years. The management is currently
            evaluating the effect of this pronouncement on financial
            statements.
 
 In
            September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
            Pension and Other Postretirement Plans - an amendment of FASB Statements
            No. 87,
            88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
            employer to recognize 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 statement of financial position and to recognize changes
            in
            that funded statues in the year in which the changes occur through comprehensive
            income of a business entity or changes in unrestricted net assets of
            a
            not-for-profit organization. This Statement also improves financial reporting
            by
            requiring an employer to measure the funded status of a plan as of the
            date of
            its year-end statement of financial position, with limited exceptions.
            An
            employer with publicly traded equity securities is required to initially
            recognize the funded status of a defined benefit postretirement plan
            and to
            provide the required disclosures as of the end of the fiscal year ending
            after
            December 15, 2006. An employer without publicly traded equity securities
            is
            required to recognize the funded status of a defined benefit postretirement
            plan
            and to provide the required disclosures as of the end of the fiscal year
            ending
            after June 15, 2007. However, an employer without publicly traded equity
            securities is required to disclose the following information in the notes
            to
            financial statements for a fiscal year ending after December 15, 2006,
            but
            before June 16, 2007, unless it has applied the recognition provisions
            of this
            Statement in preparing those financial statements:
 a.
                  A
                      brief description of the provisions of this
                      Statement b.
                  The
                      date that adoption is required c.
                  The
                      date the employer plans to adopt the recognition provisions
                      of this
                      Statement, if earlier.
  The
            requirement to measure plan assets and benefit obligations as of the
            date of the
            employer’s fiscal year-end statement of financial position is effective for
            fiscal years ending after December 15, 2008. The management is currently
            evaluating the effect of this pronouncement on financial
            statements.
 
 **ITEM
            7. FINANCIAL STATEMENTS**
 
 The
            response to this item follows Item 14.
 
 **ITEM
            8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE**
 
 On
            January 5, 2006, the Company (A) dismissed Goldstein and Ganz, CPA’s, P.C.
            (“G&G”) as its independent accountant responsible for auditing its financial
            statements and (B) retained Morgenstern & Company, CPA’s, P.C.
            (“Morgenstern”) as its new independent accountant.
 
 G&G’s
            report on the financial statements of the Company for the years ended
            December
            31, 2004 and 2003 did not contain an adverse opinion or disclaimer of
            opinion,
            nor was it qualified or modified as to uncertainty, audit scope, or accounting
            principles, except that their reports for each of the years ended December
            31,
            2004 and 2003 included an explanatory paragraph stating that the Company
            had
            suffered recurring losses from operations, which raised substantial doubt
            about
            its ability to continue as a going concern.
   24
  The
            decision to retain Morgenstern was unanimously approved by the Company’s Board
            of Directors.
 
 From
            the
            date of the last audited financial Statements through the date of G&G’s
            dismissal, the Company had no disagreements, whether or not resolved,
            with
            G&G on any matter of accounting principles or practices, financial statement
            disclosures, or auditing scope or procedures, which, if not resolved
            to
            G&G’s satisfaction, would have caused G&G to make reference to the
            subject matter of the disagreement in connection with its report.
 
 During
            its two most recent fiscal years, the Company did not consult Morgenstern
            regarding the application of accounting principles to a specific completed
            or
            contemplated transaction, other type of audit opinion that might be rendered
            on
            the Company’s financial statements.
 
 **ITEM
            8A. CONTROLS AND PROCEDURES**
 
 As
            required by Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
            Act, we
            carried out an evaluation of the effectiveness of the design and operation
            of
            our disclosure controls and procedures as of the end of the period covered
            by
            this report. This evaluation was carried out under the supervision and
            with the
            participation of our Chief Executive Officer and our Chief Financial
            Officer,
            Vlado P. Hreljanovic, who holds both positions.
  Based
            on
            that evaluation, our Chief Executive Officer and Chief Financial Officer
            concluded that our disclosure controls and procedures are effective in
            timely
            alerting management to material information relating to us that is required
            to
            be included in our periodic filings with the Securities and Exchange
            Commission
            and that the controls and procedures were effective in ensuring that
            information
            required to be disclosed by the Company in the reports that it files
            or submits
            under the Exchange Act are accumulated and communicated to the Company's
            management, including its principal executive and principal financial
            officers,
            or persons performing similar functions, as appropriate to allow timely
            decisions regarding required disclosure. There have been no changes in
            our
            internal controls over financial reporting during the most recent fiscal
            quarter
            that have materially affected, or are reasonable likely to materially
            affect,
            our internal controls over financial reporting.
  Disclosure
            controls and procedures are controls and other procedures that are designed
            to
            ensure that information required to be disclosed our reports filed or
            submitted
            under the Exchange Act is 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 is accumulated and communicated
            to
            management, including our Chief Executive Officer and Chief Financial
            Officer,
            to allow timely decisions regarding required disclosure.
  
  **PART
            III**
 
 **ITEM
            9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
            AND CONTROL
            PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
            ACT.**
 
 The
            Company's Certificate of Incorporation provides for no less than three
            Directors. Each Director shall hold office until the next annual meeting
            of
            shareholders and until his successor has been elected and qualified.
            At the
            present time there are a total of two (2) Directors. The Company is currently
            considering various individuals to add to the Board of Directors. The
            Board of
            Directors is empowered to fill vacancies on the Board. The Company's
            Directors,
            Executive Officers and key employees are listed below:
  Name
                    Age
                    Positions
                      W/Company
                    Director
                      SinceVlado
                        P. Hreljanovic
                    59
                    Chairman
                        of the Board,
                      President,
                        CEO and CFO
                    1987Barry
                        S. Huston
                    60
                    Director
                    2000Peter
                        W. Feldman
                    62
                    Director
                        (1)
                    2003James
                        A. Calerhead
                    41
                    President/Juniper
                      Services,
                        Inc.
                    2003
 (1)
                Resigned in September, 2006
  DIRECTORS
 
 Vlado
            P.
            Hreljanovic has been the President, Chief Executive Officer and Chairman
            of the
            Board since 1987. Upon graduation from Fordham University, he joined
            KPMG
            (formerly Peat Marwick Mitchell & Co.) as an accountant. Mr. Hreljanovic is
            and has been the sole shareholder, officer and director of Entertainment
            Financing, Inc., which has no business other than acting as lessee to
            one of the
            wholly owned subsidiaries of the Company with offices in Great Neck,
            New
            York.
 
 On
            October 31, 2000, Barry S. Huston was elected to the Board of Directors
            to fill
            one of the vacancies on the Board. Mr. Huston is a practicing attorney
            and the
            senior partner of Huston & Schuller, P.C, a New York law firm with offices
            in Manhattan and East Hills, Long Island. He is a member of the New York
            Bar and
            the Federal Courts in New York, the United States Tax Court and the Supreme
            Court of the United States. Mr. Huston holds a B.A. degree from Queens
            College
            of the City University of New York in 1969, and a J.D. from Brooklyn
            Law School
            in 1972. Mr. Huston specializes in complex civil and corporate litigation,
            including healthcare and professional liability, product liability, toxic
            and
            environmental torts, and labor law and construction litigation. He is
            also a
            member of numerous national and local law associations.
  25
 
 KEY
            EMPLOYEES
 
 James
            Calderhead joined Juniper Services, Inc. in February 2005 to head up
            the
            broadband installation and wireless infrastructure services of the Company.
            He
            brings over 20 Years of experience in telecommunications to the Company.
            Mr.
            Calderhead is an expert in Cable Voice, Video and Data Services Mr. Calderhead
            has previously directed the deployment of operating support systems and
            software
            to support major new customer opportunities.
 
 Before
            joining Juniper Services, Inc., Mr. Calderhead was previously employed
            at 180
            Connect as a Regional Operations Executive and as a Sr. Director of Operations.
            He managed all technical staff supporting cable services accounts, increasing
            personnel from 300 to 800 in one year. He achieved organic growth to
            $10 million
            while
 focused
            on profitability and customer satisfaction. Mr. Calderhead acquired large
            company operations and integrated them successfully, and initiated the
            company's
            market entry as an Integrated Communications Provider by launching new
            services.
            He also streamlined processes and procedures to improve operations and
            standardized reporting and implemented improved practices and procedures
            in
            parallel in all company territories nationwide.
 
 At
            Covad
            Communications, Mr. Calderhead was Director of Network Engineering where
            he was
            primarily responsible for DSL infrastructure build-out.
 
 Mr.
            Calderhead was also a National Director for International Fibercom, Inc.,
            where
            he was responsible for managing the installation of fiber across the
            country. He
            directed consulting, engineering, maintenance and installation services
            pertaining to structured cabling for voice/data/video, network design
&
implementation as well as performing marketing services. As a project
            manager he
            led teams of communications technicians installing the communications
            networks
            for national projects for HCA, Bright Horizons and Gambro.
 
 Mr.
            Calderhead is a graduate of Albany Technical College where he received
            a
            Bachelor of Science degree.
 
 Section
            16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the
            Exchange
            Act requires the Company's officers and directors, and persons who own
            more than
            ten percent of a registered class of the Company's equity securities,
            to file
            reports of ownership and changes in ownership with the Securities and
            Exchange
            Commission. Officers, directors and greater than ten percent shareholders
            are
            required by regulation to furnish the Company with copies of all Section
            16(a)
            forms they file.
 
 Based
            solely on its review of the copies of such forms received by it, or written
            representations from certain reporting persons that Form 5's were required
            and
            filed for those persons, the Company believes that, during the period
            from
            January 1, 2006 through December 31, 2006, all filing requirements applicable
            to
            its officers, directors, and greater than ten percent beneficial owners
            were
            complied with.
 
  **ITEM
            10.EXECUTIVECOMPENSATION**
  
 The
            following table sets forth information with respect to the compensation
            of our
            Chief Executive Officer and the other executive officers who earned more
            than
            $100,000 per year at the end of the last completed fiscal year for services
            provided to us and our subsidiaries in 2006 and 2005.
   26
  **Summary
            Compensation Table**
 
 All
            amounts below are restated, if applicable, to give effect to the June
            5, 2003, 1
            for 8 reverse stock split.
  All
              amounts below are restated, if applicable, to give effect to the June
              5, 2003, 1
              for 8 reverse stock split.
    All
                amounts below are restated, if applicable, to give effect to the
                June 5, 2003, 1
                for 8 reverse stock split.
 
 Name
                          & Principal Position
                      Year
                      Salary
                          ($)
                      Bonus
                          ($)
                      Stock
                          Awards($)
                      Option
                          Awards ($)
                      Non-Equity
                          Incentive Plan Compensa-tion ($)
                      Change
                          in Pension Value and Non-Qualified Deferred Compensa-tion
                          Earnings
                          ($)
                      All
                          Other Compensa-tion ($)
                      Total
                          ($)Vlado
                          P. Hreljanovic,
                        Chief
                          Executive Officer
                      2006
                        
                        
                        2005
                      221,893(1)
                        
                        
                        156,797(3)
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      56,364(2)
                        
                        
                        45,452(4)
                      278,257
                        
                        
                        202,249James
                          A. Calderhead,President, Juniper Services
                      2006
                        
                        
                        2005
                      157,692
                        
                        
                        121,538
                      45,000(5)
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      0
                        
                        
                        0
                      14,581(6)
                        
                        
                        13,270(7)
                      217,273
                        
                        
                        134,808
   (1)
                  In
                      2006, Mr. Hreljanovic’s, has accrued and not received gross salary in the
                      amount of $216,355 and has been paid a gross salary of $5,538
                      for a total
                      of $221,893.
 (2)
                  Other
                      compensation for Mr. Hreljanovic in 2006 was primarily comprised
                      of
                      automobile lease payments and insurance premium of $28,819
                      and health and
                      life insurance premium of $27,545.
 (3)
                  Throughout
                      2005, Mr. Hreljanovic received 786,464 shares as payment of
                      net salary of
                      $62,288 for a gross salary of $99,030 and has accrued and not
                      received a
                      net salary of $39,291 for a gross of
                      $57,767.
 (4)
                  Other
                      compensation for Mr. Hreljanovic in 2005 was primarily comprised
                      of
                      automobile lease payments and insurance premium of $25,290
                      and health and
                      life insurance premium  of
 $20,162.
 (5)
                  For
                      the year ended December 31, 2006, Mr. Calderhead has accrued
                      a bonus of
                      $45,000 and has received as payment of bonus
                      $25,213.
 (6)
                  Other
                      compensation for Mr. Calderhead for the year ended December
                      31, 2006 was
                      primarily composed of automobile reimbursement payments of
                      $4,800 and
                      health insurance premium of 
$9,781.
 (7)
                  Other
                      compensation for Mr. Calderhead for year ended December 31,
                      2005 was
                      primarily comprised of automobile reimbursement payments of
                      $4,800 and
                      healthcare insurance premium of
                      $8,470.
  
 **Aggregate
            Option Exercises in Last Fiscal Year and Year-end Options**
 
 Option
                      Awards
                  Stock
                      AwardsName
                  
                  
                  Number
                      of Securities Underlying Unexercised Options (#)
                      Unexercisable
                  
                  
                  Number
                      of Securities Underlying Unexercised Options (#)
                      Unexercisable
                  
                  
                  Equity
                      Incentive Plan Awards: Number of Securities Underlying Unexercised
                      Unearned Options (#
                  )
                  
                  Option
                      Exercise Price ($
                  )
                  
                  Option
                      Expiration on Date
                  
                  
                  Number
                      of Shares or Units of Stock that Have Not Vested (#
                  )
                  
                  Market
                      Value of Shares or Units of Stock that Have Not Vested (#
                  )
                  
                  Equity
                      Incentive Plan Awards: Number of Unearned Shares, Units or
                      Other Rights
                      that Have Not Vested (#
                  )
                  
                  Equity
                      Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                      Units or
                      Other Rights that Have not Vested (#
                  )Vlado
                      P. Hreljanovic, Chairman of the Board, Chief Executive Officer
                      (1)
                  
                  
                  500,000
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  $
                  0.21
                  
                  
                  2/1/2009
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-James
                      A. Calderhead, President Juniper Services (2)
                  
                  
                  300,000
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  $
                  0.31
                  
                  
                  2/7/2010
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
 
 
 (1)  These
            options were granted to Mr. Hreljanovic on February 2, 2004.
 (2)  These
            options were granted to Mr. Calderhead on February
            7, 2005.
 
 27
 
  **Director
            Compensation**
  
 Name
                  
                  
                  Fees
                      Earned or Paid in Cash
                    ($
                  )
                  
                  Stock
                      Awards
                    ($
                  )
                  
                  Option
                    Awards
                      ($
                  )
                  
                  Non-Equity
                      Incentive Plan Compensation ($
                  )
                  
                  Change
                      in Pension Value and Nonqualified Deferred Compensation Earnings
                  
                  
                  All
                      Other Compensation
                    ($
                  )
                  
                  Total
                    ($
                  )Vlado
                      P. Hreljanovic,
                    Chairman
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  -
                  
                  
                  0
                  
                  
                  0Barry
                      Huston
                    Director
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  -
                  
                  
                  0
                  
                  
                  0Peter
                      Feldman
                    Director
                      (1)
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  0
                  
                  
                  -
                  
                  
                  0
                  
                  
                  0
 
 (1)
            Resigned on September 30, 2006
 
 **Employment
            Agreements with Executive Officers**
 
 Mr.
            Hreljanovic has an Employment Agreement with the Company, which expired
            on April
            30, 2005, and that provides for his employment as President and Chief
            Executive
            Officer at an annual salary and the Board of Directors have authorized
            a two
            year extension expiring on April 30, 2007 adjusted annually for the CPI
            Index
            and for the reimbursement of certain expenses and insurance. Based on
            the
            foregoing formula, Mr. Hreljanovic's base salary in 2006 was scheduled
            to be
            approximately $221,893. Additionally, the employment agreement provides
            that Mr.
            Hreljanovic may receive shares of the Company’s common stock as consideration
            for services rendered to the Company. Due to a working capital deficit,
            Mr.
            Hreljanovic received in net salary of $4,360 for a gross of $5,538 and
            the
            balance of $216,355 was accrued and not paid.
 
 Under
            the
            terms of this employment agreement, our Chief Executive Officer is entitled
            to
            receive a cash bonus of a percentage of our pre-tax profits if our pre-tax
            profit exceeds $100,000.
 
 Additionally,
            if the employment agreement is terminated early by us after a change
            in control
            (as defined by the agreement), the officer is entitled to a lump sum
            cash
            payment equal to approximately three times his base salary.
 
 On
            February 7, 2005, we executed an employment agreement with Mr. Calderhead
            as
            President of Juniper's Services. The agreement is for three years and
            provides
            for a salary of $140,000 per year plus a sign-on bonus of $10,000. Additionally,
            the agreement provides Mr. Calderhead with options to purchase 300,000
            shares of
            our common stock at a price of $.31 per share subject to the Company
            achieving
            cumulative gross revenue of $18,750,000 bought by and generated through
            Mr.
            Calderhead’s direct efforts within the first twenty four (24) months and
            maintaining a 10% EBITDA. The options expire on February 7, 2010. The
            agreement
            also provides for other usual and customary benefits, such as health
            insurance
            and automobile allowances.
 
 **Stock
            Option Plans**
 
 In
            2004,
            we adopted the 2004 Consultant Stock Plan, which supplements all previously
            adopted plans. These plans allow us to grant incentive stock options,
            non-qualified stock options and stock appreciation rights (collectively
            "options"), to employees, including officers, and to non-employees involved
            in
            our continuing development and success. The terms of the options and
            the option
            prices are to be determined by the Board of Directors. The options will
            not have
            an expiration date later than ten years (five years in the case of a
            10% or more
            stockholders).
 
 At
            December 31, 2002, for all plans prior to the 2002 Plan, all options
            issued
            under the Plans were either exercised or cancelled. During 2003, we issued
            stock
            awards for 22,164 shares of common stock under the 2002 Plan. Further
            with
            regard to the 2002 Plan, at December 31, 2004, 27,500 options remain
            unissued
            and available (see Options Granted in Note 8 - Shareholders' Equity).
 
 With
            regard to the 2003 Equity Incentive Plan, at December 31, 2004, 1,450,168
            shares
            were issued 49,832 shares remain unissued and available.
 
 With
            regard to the 2004 Consultant Stock Plan, at December 31, 2004, 1,939,984
            shares
            were issued 60,016 shares remain unissued and available.
 
 
 **OPTION/SAR
            GRANTS TABLE**
 
 **OPTIONS/SAR
            GRANTS IN 2005 FISCAL YEAR AND NO GRANTS IN 2005**
  Name
                    Number
                        of
                      Securities
                      Underlying
                      Options/SARS
                      Granted
                      #
                    %
                        of Total
                      Options/SARS
                      Granted
                        to
                      Employees
                        in
                      Fiscal
                        Year
                    Exercise
                        on
                      Base
                        Price
                      ($/Share
                    Expiration
                      DateJames
                        A. Calderhead
                      President/
                      Juniper
                        Services, Inc.
                    300,000
                        (1)
                    [100]%
                    $0.31
                    2/7/10
  
  
 (1)
            These
            options are outstanding and exercisable at December 31, 2006.
   28
 
 **ITEM
            11. SECURITY OWNERSHIPOF CERTAIN BENEFICIAL OWNERS
            AND
            MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
 
 The
            following table sets forth, as of February 27, 2007 (i) the name and
            address of
            each person who owns of record or who is known by the Board of Directors
            to be a
            beneficial owner of more than five percent (5%) of the Company's outstanding
            common stock, (ii) each of the Company's Directors, (iii) each of the
            Company’s
            executive officers, and (iv) all of the Company's Executive Officers
            and
            Directors as a group.
 
 Beneficial
            ownership is determined in accordance with the rules of the SEC and includes
            voting and investment power. Under SEC rules, a person is deemed to be
            the
            beneficial owner of securities which may be acquired by such person upon
            the
            exercise of options and warrants or the conversion of convertible securities
            within 60 days from the date on which beneficial ownership is to be determined.
            Each beneficial owner’s percentage ownership is determined by dividing the
            number of shares beneficially owned by that person by the base number
            of
            outstanding shares, increased to reflect the beneficially-owned shares
            underlying options, warrants or other convertible securities included
            in that
            person’s holdings, but not those underlying shares held by any other
            person.
  **Amount
              and Nature of Beneficial Ownership**
 
 **Amount
                      and Nature of Beneficial
                      Ownership**
                  
                  
                  **Percentage
                      of Class**Vlado
                      P. Hreljanovic
                    111
                      Great Neck Road
                    Suite
                      604
                    Great
                      Neck, NY 11021
                  
                  
                  2,837,214(1)
                  
                  
                  17.65
                  %Barry
                      S. Huston
                    20
                      Melby Lane
                    East
                      Hills, NY 11576
                  
                  
                  201,957
                      (2)
                  
                  
                  1.3
                  %Peter
                      W. Feldman (a)
                    111
                      Great Neck Road
                    Suite
                      604
                    Great
                      Neck, NY 11021
                  
                  
                  100,000
                      (3)
                  
                  
                  0.6
                  %James
                      A. Calderhead
                    5623
                      Main Street
                    Suite
                      F
                    Spring
                      Hill, TN 37174
                  
                  
                  1,300,000(4)
                  
                  
                  7.8.1
                  %All
                      current directors and named officers as a group (4 in all)
                  
                  
                  4,439,171
                  
                  
                  26.6
                  %
 
 (a)
            Resigned September 30, 2006
 
 (1)
                    Includes
                        500,000 shares of Common Stock issuable upon exercise of
                        options granted
                        to Mr. Hreljanovic under the 2003 Equity Incentive Plan.
                        Includes an
                        aggregate of 1,423,886 shares of Common Stock owned by Mr.
                        Hreljanovic's
                        children.
 
 (2)
                    Includes
                        150,000 shares of Common Stock issuable upon exercise of
                        options granted
                        to Mr. Huston under the 2003 Equity Incentive Plan.
 
 (3)
                    Includes
                        100,000 shares of common stock issuable upon exercise of
                        options granted
                        to Mr. Feldman under the 2003 Equity Incentive Plan.
 
 (4)  Includes 300,000 shares of common stock issuable upon exercise of options
              granted to Mr. Calderhead under his employment agreement.
 **ITEM
            12. CERTAIN RELATIONSHIPS AND RELATED
            TRANSACTIONS**
  The
              Company paid rent under a sublease during 2006 and 2005 to a company
              100% owned
              by the President of the Company. The rents paid and terms under the
              sublease are
              the same as those under the affiliate's lease agreement with the landlord.
              Rent
              expense for the years ended December 31, 2006 and 2005 was approximately
              $91,000
              and $87,500 respectively. The master lease and the Company’s lease on this space
              expires on November 30, 2016.
 The
              Company acquired distribution rights to two films from a company affiliated
              with
              our Chief Executive Officer, for a ten-year license period, which expires
              on
              June 5, 2008. We are obligated to pay such company producers' fees
              at the
              contract rate. Such payments will be charged against earnings. In 2006,
              no
              payments were made to such company and no revenue was recognized from
              such
              films.
 
 Throughout
            2006 and 2005, the Company’s principal shareholder and officer made loans to,
            and payments on behalf of, the Company and received payments from time
            to time.
            The net outstanding balance due to the officer was $305,000 at December
            31,
            2006.
 
 As
            part
            of salary, bonuses and other compensation, the Company’s President and Chief
            Executive Officer, has accrued and not received gross salary in the amount
            of
            $221,893 and has received as net salary of $4,360 for a gross of $5,538
            in 2006
            and 786,464 shares valued at $ 62,288 in 2005.
 
 During
            2006, legal services were performed by a firm in which Mr. Barry S. Huston,
            a
            member of our Board of Directors, is a Partner. Such services related
            to the
            collection and settlement of various receivables. For their services,
            Mr.
            Huston's firm receives compensation on a contingent basis (one third
            upon
            settlement). During 2005 $13,445 was paid to Mr. Huston's firm and no
            legal
            services or compensation was paid to Mr. Huston during 2006
 
 In
              2005,
              Service’s utilized the services of a subcontractor that is 85% owned by a family
              member of Service’s President. During 2005, payment to this subcontractor
              totaled $14,000 and no payments were made in 2006.
 29
  **ITEM
            13. EXHIBITS**.
 Exhibit
            Description:
   Exhibit
                    
                    Incorporated
                      By
                        Reference2.1
                    Agreement
                        and Plan of Merger dated as of January 20, 1997 between the
                        Registrant and
                        Juniper Group, Inc., a Nevada corporation
                    (2)3.1
                    Certificate
                        of Incorporation of the Registrant, as amended
                    (1)3.2
                    Amendment
                        to the Certificate of Incorporation of the Registrant, filed
                        March 7, 1997
                    (3)3.3
                    Certificate
                        of Incorporation of Juniper Group, Inc., a Nevada
                        corporation.
                    (2)3.4
                    By-Laws
                        of the Registrant (1)
                    (1)3.5
                    Amendment
                        to the By-Laws of the Registrant approved by shareholders
                        of the
                        Registrant on February 12, 1997
                    (2)3.6
                    By-Laws
                        of Juniper Group, Inc., a Nevada corporation
                    (2)3.7
                    Certificate
                        of Designation, Power, Preferences and Rights of Series C
                        Preferred Stock
                    (8)4.1
                    1999
                        Stock Option Plan
                    (2)4.2
                    2000
                        Stock Option Plan
                    (3)4.3
                    2001
                        Stock Option Plan
                    (4)4.4
                    2002
                        Equity Incentive Plan
                    (5)4.5
                    2003
                        Equity Incentive Plan
                    (6)4.6
                    2004
                        Consultant Stock Plan (7)
                    (7)10.1
                    Form
                        of Securities Purchase Agreement between Juniper Group, Inc.
                        and certain
                        investors
                    (9)10.2
                    Form
                        of Callable Security Convertible Note issued by Juniper Group,
                        Inc. and
                        certain
                      investors
                    (9)10.3
                    Form
                        of Stock Purchase Warrants issued by Juniper Group, Inc.
                    (9)10.4
                    Registration
                        Rights Agreement between Juniper Group, Inc. and certain
                        investors
                    (9)10.5
                    Security
                        Agreement between Juniper Group, Inc. and certain investors
                    (8)10.6
                    Stock
                        Exchange Agreement and Plan of Reorganization between Juniper
                        Services,
                        Inc. and New Wave Communications, Inc.
                    (8)21.1
                    Subsidiaries
                        of Juniper Group, Inc.
                    (8)31.1
                    Certification
                        by President and Chief Financial Officer, Vlado P. Hreljanovic,
                        pursuant
                        to U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the
                        Sarbanes-Oxley Act of 2002
                    Attached
                      Hereto32.1
                    Certification
                        by President and Chief Financial Officer, Vlado P. Hreljanovic,
                        pursuant
                        to U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the
                        Sarbanes-Oxley Act of 2002
                    Attached
                      Hereto
 
   (1)
                  Incorporated
                      by reference to the Company’s annual report on Form 10-KSB for the fiscal
                      year ended December 31, 1996(2)
                  Incorporated
                      by reference to the Company’s Proxy Statement for its Annual Meeting held
                      on December 30, 1999(3)
                  Incorporated
                      by reference to the Company’s Proxy Statement for its Annual Meeting held
                      on December 27, 2000(4)
                  Incorporated
                      by reference to the Company’s Form S-8 filed on October 1, 2001, as
                      amended on October(5)
                  Incorporated
                      by reference to the Company's Form S-8 filed January 3,
                      2003(6)
                  Incorporated
                      by reference to the Company's Form S-8 filed July 11, 2003.(7)
                  Incorporated
                      by reference to the Company's Form S-8 filed April 26,
                      2004.(8)
                  Incorporated
                    by reference to the Company's annual report on Form 10-KSB for
                    the fiscal
                    year ended December 31, 2005(9)
                  Incorporated
                    by reference to the Company's Form 8-K filed January 5, 2006
 
 
 
 
  30
   **ITEM
            14. PRINCIPAL ACCOUNTANT FEES AND
            SERVICES**
 
 During
            2006 and 2005, the Company changed its’ auditors in 2005 to Morgenstern, Svoboda
            and Baer, CPA’s, P.C., from Goldstein & Ganz, CPA's P.C. Neither firm
            provided any services to the Company related to financial information
            systems
            design and implementation.
 
 The
            aggregate fees billed by Morgenstern, Svoboda and Baer, CPA’s, P.C. and
            Goldstein & Ganz, CPA's P.C. to the Company for the years ended December 31,
            2006 and 2005 are as follows:
   2006
                    
                    
                    2005Audit
                        Fees (1)
                    
                    
                    72,600
                    
                    
                    34,500All
                        Other Fees
                    
                    
                    37,100
                    
                    
                    3,500Total
                        Fees for Services Provided
                    
                    
                    109,700
                    
                    
                    38,000
 (1)
            Audit
            services included (a) the annual audit (including required quarterly
            reviews)
            and other procedures required to be performed by the independent auditor
            to be
            able to form an opinion on the Company's consolidated financial statements,
            and
            (b) services that only the independent auditor reasonably can provide,
            such as
            services associated with SEC registration statements, periodic reports
            and other
            documents filed with the SEC or related thereto.
 
 
 
 
 
 
 
 
 
 
  31
   
 
 JUNIPER
            GROUP, INC.
 AND
            SUBSIDIARY COMPANIES
 INDEX
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
      
 Report
                        of Independent Registered Public Accounting
                        Firms
                    F-2Consolidated
                        Balance Sheets as of December 31,
                        2006 and 2005....
                    F-3Consolidated
                        Statements of Income for the years ended 
                        December 31, 2006 and 2005.
                    F-4Consolidated
                        Statements of Cash Flows for the years
                        ended December 31, 2006 and 2005.
                    F-5Consolidated
                          Statements of Shareholders' Equity
                          for the years ended December 31, 2006 and 2005
                    F-6Notes
                        to Consolidated Financial
                        Statements
                    F-8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  F-1
   
 Report
            of Independent Registered Public Accounting
            Firm
 
 
 To
            the
            Board of Directors of
 Juniper
            Group, Inc.
 
 We
                have
                audited the accompanying consolidated balance sheets of Juniper Group,
                Inc. as
                of December 31, 2006 and 2005 and the related consolidated statements
                of
                operations, cash flows, and stockholders' equity for each of the
                two years in
                the period ended December 31, 2006. 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 audits in accordance with the standards of the Public Company
            Accounting Oversight Board (United States). Those standards require that
            we plan
            and perform the audit to obtain reasonable assurance about whether the
            financial
            statements are free of material misstatement. An audit includes examining,
            on a
            test basis, evidence supporting the amounts and disclosures in the financial
            statements. An audit also includes assessing the accounting principles
            used and
            significant estimates made by management, as well as evaluating the overall
            financial statement presentation. We believe that our audits provide
            a
            reasonable basis for our opinion.
 
 In
            our
            opinion, the consolidated financial statements referred to above present
            fairly,
            in all material respects, the financial position of Juniper Group, Inc.
            and
            subsidiaries as of December 31, 2006 and 2005, and the results of their
            operations and their cash flows for each of the years then ended, in
            conformity
            with accounting principles generally accepted in the United States of
            America.
 
 The
            accompanying consolidated financial statements have been prepared assuming
            the
            Company will continue as a going concern. As discussed in Note 9 to the
            consolidated financial statements, the Company has suffered recurring
            losses
            from operations, which raises substantial doubt about its ability to
            continue as
            a going concern. Management’s plans regarding those matters are also described
            in Note 9. The consolidated financial statements do not include any adjustments
            that might result from the outcome of this uncertainty.
 
 /s/MORGENSTERN,
            SVOBODA & BAER, CPA's, P.C.
 
 
 New
            York,
            New York
 March
            5 , 2007
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   F-2
   JUNIPER
                      GROUP, INC.AND
                      SUBSIDIARY COMPANIESCONSOLIDATED
                      BALANCESHEETS****
                  
                  DECEMBR
                      31,
                    RESTATED**2006**
                  
                  
                  **2005**ASSETSCurrent
                      AssetsCash
                  
                  $
                  202,773
                  
                  $
                  376,913Accounts
                      receivable-trade (net of allowance)
                  
                  
                  616,282
                  
                  
                  89,410Costs
                      in excess of billings on uncompleted projects
                  
                  
                  59,159Prepaid
                      expenses and other current asset
                  
                  $
                  87,494
                  
                  $
                  68,900965,707
                  
                  
                  535,223Film
                      licenses
                  
                  
                  180,173
                  
                  
                  481,829Property
                      and equipment net of accumulated depreciation of $ 1,120,170
                      and $381,690
                      respectively
                  
                  
                  399,897
                  
                  
                  106,939TOTAL
                        ASSETS
                  
                  $
                  1,545,777
                  
                  $
                  1,123,991LIABILITIES
                      AND SHAREHOLDERS’ EQUITYCurrent
                      Liabilities:Accounts
                      payable and accrued expenses
                  
                  $
                  1,454,272
                  
                  $
                  1,179,422Notes
                      payable
                  
                  
                  96,000
                  
                  
                  50,000Notes
                      payable and capitalized leases - current portion
                  
                  
                  139,587
                  
                  
                  -Preferred
                      stock dividend payable
                  
                  
                  28,897
                  
                  
                  22,811Due
                      to officer
                  
                  
                  305,000
                  
                  
                  40,673Due
                      To shareholders & related parties
                  
                  
                  574,315
                  
                  
                  431,317Total
                      current liabilities
                  
                  
                  2,598,071
                  
                  
                  1,742,223Notes
                      payable and capitalized leases, less current portion
                  
                  
                  295,360
                  
                  
                  24,610Derivative
                      liability related to convertible debentures
                  
                  
                  1,529,211
                  
                  
                  1,380,818Warrant
                      liability related to convertible debentures
                  
                  
                  305,053
                  
                  
                  80,961Total
                      liabilities
                  
                  $
                  4,727,695
                  
                  $
                  3,210,612Shareholders’
                      Deficit12%
                      Non-voting convertible redeemable preferred stock: $0.10 par
                      value,
                      10,000,000 shares authorized, 25,357 shares issued and outstanding
                      at
                      December 31, 2006 and December 31, 2005: aggregate liquidation
                      preference,
                      $50,714 at December 31, 2006 and December 31, 2005
                  
                  
                  2,536
                  
                  
                  2,536Voting
                      Convertible Redeemable Series B Preferred Stock $0.10 par value
                      135,000
                      shares authorized 135,000 and 117,493 shares issued and outstanding
                      at
                      December 31, 2006 and December 31, 2005, respectively
                  
                  
                  13,500
                  
                  
                  11,749Series
                      C Voting Preferred Stock,$0.10
                      par value 300,000 shares authorized none issuedCommon
                      Stock - $0.10 par value, 750,000,000 shares authorized, 15,670,122
                      and
                      14,232,048 issued and outstanding at December 31, 2006 and
                      December 31,
                      2005, respectively
                  
                  
                  15,669
                  
                  
                  14,232Capital
                      contributions in excess of par:Attributed
                      to 12% preferred stock non-voting
                  
                  
                  22,606
                  
                  
                  22,606Attributed
                      to Series B Preferred Stock voting
                  
                  
                  3,172,415
                  
                  
                  2,561,769Attributed
                      to Series C Preferred stock votingAttributed
                      to common stock
                  
                  
                  22,194,785
                  
                  
                  22,162,291Preferred
                      stock dividend payableDeficit
                  
                  
                  (28,603,429
                  )
                  
                  (26,861,804
                  )Total
                      Shareholders’ deficit
                  
                  
                  (3,181,918
                  )
                  
                  (2,086,621
                  )Total
                      liabilities & shareholders’ deficit
                  
                  $
                  1,545,777
                  
                  $
                  1,123,991The
                      Accompanying Notes are an Integral Part of the Consolidated
                      Financial
                      Statements
 
  F-3
   JUNIPER
                      GROUP, INC.AND
                      SUBSIDIARY COMPANIESCONSOLIDATED
                      STATEMENTS OFINCOMEYEARS
                      ENDED DECEMBER 31,
                    RESTATED**2006**
                  
                  
                  **_****2005****__**Revenues:Broadband
                        Installation and Wireless Infrastructure Services
                  
                  $
                  4,674,293
                  
                  $
                  525,104Film
                      Distribution Services
                  
                  
                  6,600
                  
                  
                  55,4004,680,893
                  
                  
                  580,504Operating
                      Costs:Broadband
                      Installation and Wireless Infrastructure Services
                  
                  
                  3,416,340
                  
                  
                  486,878Film Distribution Services
                  
                  
                  0
                  
                  
                  28,0753,416,340
                  
                  
                  514,953Gross
                      Profit
                  
                  
                  1,264,553
                  
                  
                  65,551Selling,
                      general and administrative expenses
                  
                  
                  2,250,755
                  
                  
                  1,896,997Revaluation
                      of film licenses
                  
                  
                  295,850
                  
                  
                  1,654,939Interest
                      Expense
                  
                  
                  155,140
                  
                  
                  139,178Conversion
                      expense for convertible debentures
                  
                  
                  
                  
                  
                  642,000Revaluation
                      of Investments
                  
                  
                  
                  
                  
                  200,000Loss
                      on Asset Disposition
                  
                  
                  295
                  
                  
                  200,213Revaluation
                      of Goodwill
                  
                  
                  
                  
                  
                  209,106Loss
                      on adjustment of derivative and warrant liabilities to fair
                      value
                  
                  
                  72,484
                  
                  
                  920,301Amortization
                      of Debt Discount.
                  
                  
                  225,923
                  
                  
                  263,261Stock-based
                      Compensation
                  
                  
                  -
                  
                  
                  3,1503,000,447
                  
                  
                  6,129,145Net
                      (loss) before other income
                  
                  
                  (1,735,894
                  )
                  
                  (6,063,594
                  )Other
                      income:Settlement
                      Income
                  
                  
                  355
                  
                  
                  -Net
                      (loss)
                  
                  $
                  (1,735,539
                  )
                  $
                  (6,063,594
                  )Preferred
                      stock dividend
                  
                  
                  (6,086
                  )
                  
                  (6,086
                  )Net
                      (loss) available to common stockholders
                  
                  $
                  (1,741,625
                  )
                  $
                  (6,069,680
                  )Weighted
                      average number of shares outstanding
                  
                  
                  14,556,675
                  
                  
                  18,601,834Basic
                      and diluted net (loss) per common share
                  
                  $
                  (0.120
                  )
                  $
                  (0.326
                  )The
                      Accompanying Notes are an Integral Part of the Consolidated
                      Financial
                      Statements
  
  F-4
   
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **CONSOLIDATED
              STATEMENTS OF CASH FLOWS**
 
 YEARS ENDED DECEMBER 31,RESTATED**2006**
                    
                    
                    **___****2005__**Operating
                        Activities:Net
                        (loss)
                    
                    $
                    (1,735,539)
                    
                    $
                    (6,063,594)Adjustments
                        to reconcile net cash provided by operating activities:Bad
                        debt
                    
                    
                    14,381
                    
                    
                    53,262Amortization
                        of film licenses
                    
                    
                    5,806
                    
                    
                    28,075Amortization
                        of debt discount
                    
                    
                    225,923
                    
                    
                    263,261Unrealized
                        (gain) loss of derivative liabilities
                    
                    
                    72,484
                    
                    
                    920.301Depreciation
                        and amortization expense
                    
                    
                    177,336
                    
                    
                    131,737Stock-based
                        compensation
                    
                    
                    
                    
                    
                    3,150Payment
                        of officers’ compensation with equity
                    
                    
                    
                    
                    
                    62,288Payment
                        of various expenses with equity
                    
                    
                    
                    
                    
                    14,700Payment
                        of compensation to employees and consultants with equity
                    
                    
                    5,000
                    
                    
                    228,942Re-evaluation
                        of film licenses
                      Preferred
                        stock dividend
                    
                    
                    295,850
                    
                    
                    1,654,939Loss
                        on disposition of assets
                    
                    
                    295
                    
                    
                    200,213Debt
                        conversion expense
                    
                    
                    
                    
                    
                    642,000Re-evaluation
                        of investments
                    
                    
                    
                    
                    
                    200,000Re-evaluation
                        of goodwill
                    
                    
                    
                    
                    
                    209,106Changes
                        in other operating assets and liabilities:Accounts
                        receivable
                    
                    
                    403,204
                    
                    
                    30,069Costs
                        in excess of billings on uncompleted projects
                    
                    
                    14,675Prepaid
                        and other current assets
                    
                    
                    21,386
                    
                    
                    107,142Accounts
                        payable and accrued expenses
                    
                    
                    90,257
                    
                    
                    295,912Notes
                        payable
                    
                    
                    (17,552
                    )Due
                        to officers and shareholders
                    
                    
                    264,327Deferred
                        revenue
                    
                    
                    
                    
                    
                    (7,250
                    )Net
                        cash (used for) operating activities
                    
                    $
                    _(162,167
                    )
                    $
                    _(1,017,747
                    )Investing
                        activities:(Purchase)
                        of equipment and licenses
                    
                    
                    (165,119
                    )
                    
                    (5,622
                    )Payment
                        for acquisitions net of cash acquired
                    
                    
                    (222,105
                    )Net
                        Cash (used for) investing activities:
                    
                    
                    (387,224
                    )
                    
                    (5,622
                    )Financing
                        Activities:Payment
                        of borrowings
                    
                    
                    (82,143
                    )
                    
                    (23,914
                    )Proceeds
                        from borrowings
                    
                    
                    300,000
                    
                    
                    821,810Proceeds
                        from private placements
                    
                    
                    
                    
                    
                    300,000Proceeds
                        from the sale of common stock
                    
                    
                    
                    
                    
                    250,000Proceeds
                        from borrowings from officers and shareholders
                    
                    
                    262,587
                    
                    
                    229,389Payment
                        of borrowings from officers and shareholders
                    
                    
                    __(105,193
                    )
                    
                    (203,945
                    )Net
                        cash provided by financing activities:
                    
                    
                    ___375,251
                    
                    
                    __1,373,340Net
                        increase (decrease) in cash
                    
                    
                    (174,140
                    )
                    
                    349,971Cash
                        at beginning of period
                    
                    
                    __376,913
                    
                    
                    ____26,942Cash
                        at end of Period
                    
                    $
                    202,773
                    
                    $
                    376,913
 
 The
            Accompanying Notes are an Integral Part of the Consolidated Financial
            Statements
 
 
  F-5
   JUNIPER
                      GROUP, INC.AND
                      SUBSIDIARY COMPANIESCONSOLIDATED
                      STATEMENTS OF SHAREHOLDERS'
                      EQUITY**Non-Voting 
                      Preferred Stock**
                  **Series
                      B Preferred**
                    **Stock**
                  **Common
                      Stock****Par
                      Value**
                    **At
                      $.10**
                  
                  
                  **Capital
                      Contributions in Excess Of Par**
                  
                  
                  **Par
                      Value At $.10**
                  
                  
                  **Capital
                      Contributions in Excess of Par**
                  
                  
                  **Par
                      Value At $.001**
                  
                  
                  **Capital
                      Contributions in Excess of Par**
                  
                  
                  **(Deficit**
                  **)**
                  
                  **Notes
                      for Subscription Receivable**
                  
                  
                  **Total**December
                      31, 2004
                  
                  $
                  2,536
                  
                  $
                  22,606
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  9,558
                  
                  $
                  21,800,635
                  
                  $
                  (20,792,124
                  )
                  $
                  (95,000
                  )
                  $
                  948,211Stock-based
                      compensation
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  3,150
                  
                  
                  
                  
                  
                  
                  
                  
                  3,150Debt
                      Discount
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  39,605
                  
                  
                  
                  
                  
                  
                  
                  
                  39,605Shares
                      issued as Payment for:Various
                      expenses
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  117
                  
                  
                  14,583
                  
                  
                  
                  
                  
                  
                  
                  
                  14,700Other
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (334
                  )
                  
                  (53,065
                  )
                  
                  
                  
                  
                  
                  
                  
                  (53,399
                  )Share
                      Exchange
                  
                  
                  
                  
                  
                  
                  
                  
                  11,749
                  
                  
                  2,561,769
                  
                  
                  (23,498
                  )
                  
                  (2,550,020
                  )Compensation
                      to Employees and Consultants
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  3,869
                  
                  
                  287,361
                  
                  
                  
                  
                  
                  
                  
                  
                  291,230Various
                      liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  2,601
                  
                  
                  142,935
                  
                  
                  
                  
                  
                  
                  
                  
                  145,536Purchase
                      of Fixed Assets
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (100
                  )
                  
                  (149,900
                  )
                  
                  
                  
                  
                  
                  
                  
                  (150,000
                  )Conversion
                      of Convertible Notes
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  18,769
                  
                  
                  2,346,735
                  
                  
                  
                  
                  
                  
                  
                  
                  2,365,504Sale
                      of Common Stock
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  3,250
                  
                  
                  321,750
                  
                  
                  
                  
                  
                  
                  
                  
                  325,000Receipt
                      of Subscriptions
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  95,000
                  
                  
                  95,000Initial
                      recording of derivative liability pertaining to warrants
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (41,478
                  )
                  
                  
                  
                  
                  
                  
                  
                  (41,478
                  )Net
                      (loss) for the year ended December 31, 2005
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (6,069,680
                  )
                  
                  
                  
                  
                  (6,069,680
                  )December
                      31, 2005
                  
                  $
                  2,536
                  
                  $
                  22,606
                  
                  $
                  11,749
                  
                  $
                  2,561,769
                  
                  $
                  14,232
                  
                  $
                  22,162,291
                  
                  $
                  (26,861,804
                  )
                  $
                  -
                  
                  $
                  (2,086,621
                  )The
                      Accompanying Notes are an Integral Part of the Consolidated
                      Financial
                      Statements
 
  F-6
   JUNIPER
                      GROUP, INC.AND
                      SUBSIDIARY COMPANIESCONSOLIDATED
                      STATEMENTS OF SHAREHOLDERS' EQUITY**Non-Voting Preferred**
                    **Stock**
                  **Series
                      B Preferred Stock**
                  **Common
                      Stock****Non-Voting
                    Preferred
                    Stock**
                  
                  
                  **Capital
                      Contributions in Excess Of Par**
                  
                  
                  **Par
                      Value At $.10**
                  
                  
                  **Capital
                      Contributions in Excess of Par**
                  
                  
                  **Par
                      Value At $.001**
                  
                  
                  **Capital
                      Contributions in Excess of Par**
                  
                  
                  **(Deficit**
                  **)**
                  
                  **Notes
                      for Subscription Receivable**
                  
                  
                  **Total**December
                      31, 2005
                  
                  $
                  2,536
                  
                  $
                  22,606
                  
                  $
                  11,749
                  
                  $
                  2,561,769
                  
                  $
                  14,232
                  
                  $
                  22,162,291
                  
                  $
                  (26,861,804
                  )
                  
                  
                  
                  $
                  (2,086,621
                  )Cancellation
                      of prior stock awards
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (130
                  )
                  
                  (5,070
                  )
                  
                  
                  
                  
                  
                  
                  
                  (5,200
                  )Compensation
                      to Consultants
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  250
                  
                  
                  4,750
                  
                  
                  
                  
                  
                  
                  
                  
                  5,000Stock
                      issuance related to New Wave Acquisition
                  
                  
                  
                  
                  
                  
                  
                  
                  1,974
                  
                  
                  628,239
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  630,213Reversal
                      of Preferred
                  
                  
                  
                  
                  
                  
                  
                  
                  (223
                  )
                  
                  (17,593
                  )
                  
                  445
                  
                  
                  17,371Conversion
                      of short term notes
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  720
                  
                  
                  13,680
                  
                  
                  
                  
                  
                  
                  
                  
                  14,400Partial
                      conversion of convertible debentures
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  152
                  
                  
                  1,763
                  
                  
                  
                  
                  
                  
                  
                  
                  1,915Net
                      (loss) for the year ended December 31, 2006
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (1,741,625
                  )
                  
                  
                  
                  
                  (1,741,625
                  )December
                      31, 2006
                  
                  $
                  2,536
                  
                  $
                  22,606
                  
                  $
                  13,500
                  
                  $
                  3,172,415
                  
                  $
                  15,669
                  
                  $
                  22,194,785
                  
                  $
                  (28,603,429
                  )
                  
                  
                  
                  $
                  (3,181,918
                  )
 The
              Accompanying Notes are an Integral Part of the Consolidated Financial
              Statements
  F-7
  **JUNIPER
            GROUP, INC.**
 **AND
            SUBSIDIARY COMPANIES**
 **NOTESTO
            CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
 
  
 **NOTE
            1. Summary of Significant Accounting Policies**
 
 Description
            of Business
  Juniper
            Group, Inc. is a corporation incorporated in the State of Nevada in.
            The
            Company’s business is composed of two segments: broadband installation and
            wireless infrastructure services and film distribution services. Both
            of these
            services are operated through two indirect wholly owned subsidiaries
            of the
            Company, which are subsidiaries of Juniper Entertainment, Inc. our wholly
            owned
            subsidiary.
 
 Broadband
            Installation and Wireless Infrastructure Services:
 
 The
            Company’s broadband installation and wireless infrastructure operations are
            conducted through one wholly owned subsidiary of Juniper Entertainment,
            Inc. The
            Company’s broadband installation and wireless infrastructure operations consist
            of wireless and cable broadband installation services on a regional basis
            by
            providing broadband connectivity services for wireless and cable service
            providers and over 99% of our revenues are derived from these
            operations.
 
 On
            March
            16, 2006, Juniper Services, Inc. (“Services”) completed the acquisition of all
            outstanding shares of New Wave Communication, Inc. (New Wave), making
            it a
            wholly owned subsidiary of Services. New Wave is a wireless communications
            contractor in the Mid-West, specializing in tower erection, extension,
            modifications and maintenance, as well as cellular, wireless broadband
            and
            microwave systems installation. We service the wireless providers primarily
            in
            Eastern Illinois, all of Indiana, and Western Ohio. However, we are capable
            of
            sustained work anywhere within the United States. Our current client
            roster
            includes Cingular Wireless/AT&T, Sprint/Nextel, Verizon, T-Mobile, Cricket,
            Revol, Crown Castle and Bechtel. The acquisition of New Wave has added
            a new
            dimension to the fundamentals of Services and will allow Services to
            leverage
            its customer base in creating a wider market space for its base
            business.
 
 Services’
            direction is to support the increased demand in the deployment and maintenance
            of wireless/tower system services with leading telecommunication companies
            in
            providing them with site surveys, tower construction and antenna installation
            to
            tower system integration, hardware and software installations.
 
 Film
            Distribution:
  The
            Company’s film distribution operations are conducted through one wholly owned
            subsidiary of Juniper Entertainment, Inc. The Company’s film distribution
            operations consist of acquiring motion picture rights from independent
            producers
            and distributing these rights to domestic and international territories
            on
            behalf of the producers to various medias (i.e. DVD, satellite, pay television
            and broadcast television) and less than 1% of our revenues are derived
            from
            these operations.
 
 Principles
            of Consolidation
 
 The
            consolidated financial statements include the accounts of all subsidiaries.
            Intercompany profits, transactions and balances have been eliminated
            in
            consolidation.
 
 Use                 
            Use of Estimates in the Preparation of Financial Statements
 
 The
            preparation of financial statements in conformity with accounting principles
            generally accepted in the United States of America requires management
            to make
            estimates and assumptions that affect the reported amounts of assets
            and
            liabilities and disclosure of contingent assets and liabilities at the
            date of
            the financial statements and the reported amounts of revenues and expenses
            during the reporting period. Actual results could differ from those estimates.
  Revenue
            and Cost Recognition
  In
            the
            Wireless Infrastructure services, the Company enters into contracts principally
            on the basis of competitive bids, the final terms and prices of which
            are
            frequently negotiated with customer. Although the terms of its contracts
            vary
            considerably, most services are made on a cost- plus or time and materials
            basis. The Company completes most projects within six months. The Company
            recognizes revenue using the completed contract method. The Company follows
            the
            guidance in the Securities and Exchange Commission’s Staff Accounting Bulletin
            no. 101, "revenue recognition“ ("SAB 101"). Revenue is recognized when all of
            the following conditions exist: persuasive evidence of an arrangement
            exists;
            services have been rendered or delivery occurred; the price is fixed
            or
            determinable; and collectibility is reasonably assured. The actual costs
            required to complete a project and, therefore, the profit eventually
            realized,
            could differ materially in the near term. Costs in excess of billings
            on
            uncompleted contracts are shown as a current asset. Anticipated losses
            on
            contracts, if any, are recognized when they become evident.
   
 F-8
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  Accounts
            Receivable
  Accounts
            receivable is stated at the amount billable to customers. The Company
            provides
            allowances for doubtful accounts, which are based upon a review of outstanding
            receivables, historical performance and existing economic conditions.
            Accounts
            receivable are ordinarily due 30 to 60 days after issuance of the invoice,
            although some customers take up to 75 days to pay their balances. The
            Company
            establishes reserves against receivables by customers whenever it is
            determined
            that there may be corporate or market issues that could eventually affect
            the
            stability or financial status of these customers or their payments to
            the
            Company.
 
 Financial
            Instruments
 
 The
            estimated fair values of accounts payable and accrued expenses approximate
            their
            carrying values because of the short maturity of these instruments. The
            Company's debt (i.e., Notes Payable, Convertible Debentures and other
            obligations) does not have a ready market. These debt instruments are
            shown on a
            discounted basis using market rates applicable at the effective date.
            If such
            debt were discounted based on current rates, the fair value of this debt
            would
            not be materially different from their carrying value
 
 Concentration
            of Credit Risk
 
 Financial
            instruments which potentially subject the Company to significant concentrations
            of credit risk is principally trade accounts receivable. Concentration
            of credit
            risk with respect to the technology and entertainment services segment
            is
            primarily subject to the financial condition of the segment's largest
            customers.
 
 The
            Company had five major customers representing over 78% of sales revenue
            for year
            ending December 31, 2006. Within the industry in which the Company operates,
            these concentrations are the product of a limited customer base. The
            Company had
            two sub-contractors during the year ending December 31, 2006 which represented
            67% of the Company’s total subcontracting costs.
 
 Film
            Licenses
 
 Film
            costs are stated at the lower of estimated net realizable value determined
            on an
            individual film basis, or cost, net of amortization. Film costs represent
            the
            acquisition of film rights for cash and guaranteed minimum payments (See
            Note
            5).
 
 Producers
            retain a participation in the profits from the sale of film rights, however,
            producers' share of profits is earned only after payment to the producer
            exceeds
            the guaranteed minimum, where minimum guarantees exist. In these instances,
            the
            Company records as participation expense an amount equal to the producer’s share
            of the profits. The Company incurs expenses in connection with its film
            licenses, and in accordance with license agreements, charges these expenses
            against the liability to producers. Accordingly, these expenses are treated
            as
            payments under the film license agreements. When the Company is obligated
            to
            make guaranteed minimum payments over periods greater than one year,
            all long
            term payments are reflected at their present value. Accordingly, in such
            case,
            original acquisition costs represent the sum of the current amounts due
            and the
            present value of the long term payments.
 
 The
            Company maintains distribution rights to these films for which it has
            no
            financial obligations unless and until the rights are sold to third parties.
            The
            value of such distribution rights has not been reflected in the balance
            sheet.
            The Company was able to acquire these film rights without guaranteed
            minimum
            financial commitments as a result of its ability to place such films
            in various
            markets.
 
 The
            Company is currently directing all its time and efforts toward building
            the
            Company's Broadband business. Due to the limited availability of capital,
            personnel and resources, the volume of film sales activity has been
            significantly diminished.
 
 Amortization
            of Intangibles
 
 Amortization
            of film licenses is calculated under the film forecast method. Accordingly,
            licenses are amortized in the proportion that revenue recognized for
            the period
            bears to the estimated future revenue to be received. Estimated future
            revenue
            is reviewed annually and amortization rates are adjusted
            accordingly.
 
 The
            Company evaluates the recoverability of its long lived assets in accordance
            with
            Statement of Financial Accounting Standards No. 144, “Accounting for Impairment
            or Disposal of Long-Lived Assets,” which generally requires the Company to
            assess these assets for recoverability whenever events or changes in
            circumstance indicate that the carrying amount of such assets may not
            be
            recoverable. The Company considers historical performance and future
            estimated
            results in its evaluation of potential impairment and then compares the
            carrying
            amount of the asset to the estimated non-discounted future cash flows
            expected
            to result from the use of the asset. If such assets are considered to
            be
            impaired, the impairment recognized is measured by comparing projected
            individual segment discounted cash flow to the asset segment carrying
            values.
            The estimation of fair value is in accordance with AICPA Statement of
            Position
            00-2, Accounting by Producers and Distributors of Film. Actual results
            may
            differ from estimates and as a result the estimation of fair values may
            be
            adjusted in the future.
 
 Property
            and Equipment
 
 Property
            and equipment including assets under capital leases are stated at cost.
            Depreciation is computed generally on the straight-line method for financial
            reporting purposes over their estimated useful lives.
   F-9
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  During
            the year ended December 31, 2005 the Company ceased operations of Juniper
            Communications. As a result, the Company returned vehicles and equipment
            to
            leasing companies and other vendors. The Company realized a loss of $200,213,
            in
            addition to  liabilities to leasing companies of $64,078.
 
 Recognition
            of Revenue
 
 The
            Company follows the guidance in the Securities and Exchange Commission’s Staff
            Accounting Bulletin no. 101, "revenue recognition" ("SAB 101"). Revenue
            is
            recognized when all of the following conditions exist: persuasive evidence
            of an
            arrangement exists; services have been rendered or delivery occurred;
            the price
            is fixed or determinable; and collectibility is reasonably assured.
 
 Revenue
            from licensing agreements is recognized when the license period begins
            and the
            licensee and the Company become contractually obligated under a noncancellable
            agreement. All revenue recognition for license agreements is in compliance
            with
            the AICPA's Statement of Position 00-2, Accounting by Producers or Distributors
            of Films.
 
 For
            the
            broadband installation and wireless infrastructure services segment,
            revenue is
            reduced for estimated future chargebacks. These estimates are based upon
            historical return experience and projections of customer acceptance of
            services.
 
 The
            cost
            of operations for the broadband installation services segment is reflected
            in
            the statement of operations as incurred. Accordingly, if these costs
            are greater
            than the revenue received from fixed price contracts the Company will
            reflect a
            loss under these contracts.
 
 Operating
            Costs
 
 Operating
            costs include costs directly associated with earning revenue and include,
            among
            other expenses, salary or fees and travel expenses of the individuals
            performing
            the services, and sales commissions. Additionally, for film licensing
            agreements, operating costs include producers' royalties and film amortization
            using the film forecast method is included in operating costs.
 
 Stock-Based
            Compensation
 
 During
            December, 2004, the FASB issued SFAS No. 123R “Share-Based Payment,” which
            requires measurement and recognition of compensation expense for all
            stock-based
            payments at fair value. This statement eliminated the ability to account
            for
            share-based compensation transactions using Accounting Principles Board
            Opinion
            25, “Accounting for Stock Issued to Employees” (“APB No. 25”). Stock-based
            payments include stock grants.
 
 We
            have
            granted options to purchase common stock to some of our employees at
            prices
            equal to the market value of the stock on the dates the options were
            granted.
            The Company has also awarded liability instruments that required employee
            and
            consultants to provide services over a requisite period. We adopted SFAS
            No.
            123R in the second quarter of fiscal 2006 using the modified prospective
            application. Under this method, the fair value of any outstanding but
            unvested
            options or liability instrument as of the adoption date is expensed over
            the
            remaining vesting period. However there was no compensation expense for
            stock
            options calculated according to SFAS No. 123R in 2006.
 
 Prior
            to
            adopting SFAS No. 123R, we accounted for stock options under APB No.
            25.
            Accordingly, no compensation expense was charged to operations in previous
            fiscal years. If compensation expense for the plans had been determined
            based on
            the fair value at the grant dates for awards under the plans consistent
            with the
            accounting method available under SFAS No. 123R, our net income and net
            income
            per common share would have been reduced to the pro forms amounts indicated
            below:
   Years
                      EndedDecember
                    31, 2006
                  
                  
                  December
                      31, 2005Net
                      (loss) available for Common Stockholders
                  
                  $
                  (1,741,625
                  )
                  $
                  (6,069,680
                  )Add
                      stock-based employee compensation expense included in reported
                      net income,
                      net of taxes
                  
                  
                  -
                  
                  
                  3,150Deduct
                      stock-based employee compensation expense determined under
                      fair-value-based method for all awards, net of taxes -after
                      adoption of
                      SFAS 123R
                  
                  
                  -
                  
                  
                  (3,150
                  )Pro
                      forma
                  
                  $
                  (1,741,625
                  )
                  $
                  (6,069,680
                  )Basic
                      net (loss) per common share:
                    As
                      reported
                  
                  $
                  (0.12
                  )
                  $
                  (0.33
                  )Pro
                      forma
                  
                  $
                  (0.12
                  )
                  $
                  (0.33
                  )Diluted
                      net loss per common share:
                    As
                      reported
                  
                  $
                  (0.12
                  )
                  $
                  (0.33
                  )Stock
                      option expense, net of taxes
                  
                  
                  -
                  
                  
                  -Pro
                      forma
                  
                  $
                  (0.12
                  )
                  $
                  (0.33
                  )
 
 F-10
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
 Deri
   Derivative  Instruments
  Effective
            December 28, 2005, the Company adopted SFAS No. 133 "Accounting for Derivative
            Instruments and Hedging Activities," as amended by SFAS No. 138 "Accounting
            for
            Certain Derivative Instruments and Certain Hedging Activities, an amendment
            of
            FASB Statement No. 133," collectively referred to as SFAS No. 133. SFAS
            No. 133
            requires that all derivative instruments be recorded on the balance sheet
            at
            fair value. Changes in the fair value of derivatives are recorded each
            period in
            current earnings or other comprehensive income.
  Income
            Taxes
 
 The
            Company provides for income taxes in accordance with Statement of Financial
            Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes".
            SFAS 109
            requires the recognition of deferred tax liabilities and assets for the
            expected
            future tax consequences of temporary differences between the financial
            statement
            carrying amounts and the tax basis of assets and liabilities.
 
 Net
            Income Per Common Share
 
 The
            provisions of SFAS No. 128 "Earnings per Share," which requires the presentation
            of both net income per common share and net income per common share-assuming
            dilution preclude the inclusion of any potential common shares in the
            computation of any diluted per-share amounts when a loss from continuing
            operations exists. Accordingly, for both 2006 and 2005, net income per
            common
            share and net income per common share-assuming dilution are equal.
 
 Warrants
            Issued With Convertible Debt
 
 The
            Company has issued and anticipates issuing warrants along with debt and
            equity
            instruments to third parties. These issuances are recorded based on the
            fair
            value of these instruments. Warrants and equity instruments require valuation
            using the Black-Scholes model and other techniques, as applicable, and
            consideration of assumptions including but not limited to the volatility
            of the
            Company’s stock, and expected lives of these equity instruments.
 
 Reclassifications
 
 Certain
            amounts in the 2005 financial statements were reclassified to conform
            to the
            2006 presentation.
 
 New
            Accounting Pronouncements
 
 In
            November 2004, the FASB issued Statement of Financial Accounting Standards
            ("SFAS") No. 151 "Inventory Costs." This statement amends Accounting
            Research
            Bulletin No. 43, Chapter 4, "Inventory Pricing" and removes the "so abnormal"
            criterion that under certain circumstances could have led to the capitalization
            of these items. SFAS No. 151 requires that idle facility expense, excess
            spoilage, double freight and re-handling costs be recognized as current-period
            charges regardless of whether they meet the criterion of "so abnormal."
            SFAS 151
            also requires that allocation of fixed production overhead expenses to
            the costs
            of conversion be based on the normal capacity of the production facilities.
            The
            provisions of this statement are effective for all fiscal years beginning
            after
            June 15, 2005.
 
 In
            December 2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based
            Compensation" ("SFAS No. 123(R)"). SFAS No. 123(R) establishes standards
            for the
            accounting for transactions in which an entity exchanges its equity instruments
            for goods or services. This statement focuses primarily on accounting
            for
            transactions in which an entity obtains employee services in share-based
            payment
            transactions. SFAS No. 123(R) requires that the fair value of such equity
            instruments be recognized as an expense in the historical financial statements
            as services are performed. Prior to SFAS No. 123(R), only certain pro
            forma
            disclosures of fair value were required. The provisions of this statement
            are
            effective for small business filers the first interim reporting period
            that
            begins after December 15, 2005. The Company has since adopted aforesaid
            provisions.
 
 F-11
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
    On
            December 16, 2004, the FASB issued SFAS No. 153, "Exchange of Non-monetary
            Assets", an amendment of Accounting Principles Board ("APB") Opinion
            No. 29,
            which differed from the International Accounting Standards Board's ("IASB")
            method of accounting for exchanges of similar productive assets. Statement
            No.
            153 replaces the exception from fair value measurement in APB No. 29,
            with a
            general exception from fair value measurement for exchanges of non-monetary
            assets that do not have commercial substance. A non-monetary exchange
            has
            commercial substance if the future cash flows of the entity are expected
            to
            change significantly as a result of the exchange. The statement is to
            be applied
            prospectively and is effective for non-monetary asset exchanges occurring
            in
            fiscal periods beginning after June 15, 2005.
 
 In
            May
            2005, the FASB issued Statement SFAS No. 154 “Accounting Changes and Error
            Corrections” (SFAS 154) which supersedes APB Opinion No. 20, Accounting Changes”
and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.
            SFAS 154 provides guidance on the accounting for and reporting of accounting
            changes and error corrections. It establishes, unless impracticable,
            retrospective application as the required method for reporting a change
            in
            accounting principle in the absence of explicit transition requirements
            specific
            to the newly adopted accounting principle. The correction of an error
            in
            previously issued financial statements is not an accounting change. However,
            the
            reporting of an error correction involves adjustments to previously issued
            financial statements similar to those generally applicable to reporting
            an
            accounting change retroactively. Therefore, the reporting of a correction
            of an
            error by restating previously issued financial statements is also addressed
            by
            this Statement. SFAS 154 is effective for accounting changes and corrections
            of
            errors made in fiscal years beginning after December 15, 2005. The Company
            is in
            the process of determining the impact of SFAS 154 on its consolidated
            results of
            operations and financial condition.
  On
            February 16, 2006 the Financial Accounting Standards Board (FASB) issued
            SFAS
            155, "Accounting for Certain Hybrid Instruments," which amends SFAS 133,
            "Accounting for Derivative Instruments and Hedging Activities," and SFAS
            140,
            "Accounting for Transfers and Servicing of Financial Assets and Extinguishments
            of Liabilities." SFAS 155 allows financial instruments that have embedded
            derivatives to be accounted for as a whole (eliminating the need to bifurcate
 the
            derivative from its host) if the holder elects to account for the whole
            instrument on a fair value basis. SFAS 155 also clarifies and amends
            certain
            other provisions of SFAS 133 and SFAS 140. This statement is effective
            for all
            financial instruments acquired or issued in fiscal years beginning after
            September 15, 2006. The Company does not expect its adoption of this
            new
            standard to have a material impact on its financial position, results
            of
            operations or cash flows.
  In
            March
            2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
            of
            Financial Assets - an amendment to FASB Statement No. 140. Statement
            156
            requires that an entity recognize a servicing asset or servicing liability
            each
            time it undertakes an obligation to service a financial asset by entering
            into a
            service contract under certain situations. The new standard is effective
            for
            fiscal years beginning after September 15, 2006. The Company does not
            expect its
            adoption of this new standard to have a material impact on its financial
            position, results of operations or cash flows.
 
 In
            September, 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
            defines fair value, establishes a framework for measuring fair value
            in
            generally accepted accounting principles (GAAP), and expands disclosures
            about
            fair value measurements. This Statements applies under other accounting
            pronouncements that require or permit fair value measurements, the Board
            having
            previously concluded in those accounting pronouncements that fair value
            is the
            relevant measurement attribute. Accordingly, this Statement does not
            require any
            new fair value measurements. However, for some entities, the application
            of this
            Statement will change current practice. This Statement is effective for
            financial statements issued for fiscal years beginning after November
            15, 2007,
            and interim periods within those fiscal years. The management is currently
            evaluating the effect of this pronouncement on financial
            statements.
 
 In
            September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
            Pension and Other Postretirement Plans - an amendment of FASB Statements
            No. 87,
            88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
            employer to recognize 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 statement of financial position and to recognize changes
            in
            that funded statues in the year in which the changes occur through comprehensive
            income of a business entity or changes in unrestricted net assets of
            a
            not-for-profit organization. This Statement also improves financial reporting
            by
            requiring an employer to measure the funded status of a plan as of the
            date of
            its year-end statement of financial position, with limited exceptions.
            An
            employer with publicly traded equity securities is required to initially
            recognize the funded status of a defined benefit postretirement plan
            and to
            provide the required disclosures as of the end of the fiscal year ending
            after
            December 15, 2006. An employer without publicly traded equity securities
            is
            required to recognize the funded status of a defined benefit postretirement
            plan
            and to provide the required disclosures as of the end of the fiscal year
            ending
            after June 15, 2007. However, an employer without publicly traded equity
            securities is required to disclose the following information in the notes
            to
            financial statements for a fiscal year ending after December 15, 2006,
            but
            before June 16, 2007, unless it has applied the recognition provisions
            of this
            Statement in preparing those financial statements :
 
 a. A
            brief
            description of the provisions of this Statement
 
 b.  The
            date
            that adoption is required
 
 c.  The
            date
            the employer plans to adopt the recognition provisions of this Statement,
            if
            earlier.
 
 The
            requirement to measure plan assets and benefit obligations as of the
            date of the
            employer’s fiscal year-end statement of financial position is effective for
            fiscal years ending after December 15, 2008. The management is currently
            evaluating the effect of this pronouncement on financial
            statements.
   F-12
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  **NOTE
            2 - Accounts Receivable**
 
 The
            Company provides an allowance for doubtful accounts equal to the estimated
            uncollectible amounts. The Company's estimate is based on historical
            collection
            experience and a review of the current status of trade accounts receivable.
            It
            is reasonably possible that the Company's estimate of the allowance for
            doubtful
            accounts will change. Accounts receivable are presented net of an allowance
            for
            doubtful accounts of $61,442 and $170.885 at December 31, 2006, and December
            2005, respectively.
 
 **NOTE
             3-** **Prepaid Expenses And Other Current
            Assets**
 
 At
            December 31, 2006, prepaid expenses and other current assets consisted
            of
            significant items such as: prepaid insurance expenses of $18,000, advances
            to
            employees of $10,000  and other prepaid consulting expenses of
            $58,000.
 
 At
            December 31, 2005, prepaid expenses and other current assets consisted
            of
            significant items such as: prepaid insurance expenses of $20,000; and
            prepaid
            consulting expenses of $48,900.
 
 **NOTE
            4 - Property and Equipment**
 
 Depreciation
            expense for the year ending December 31, 2006 and 2005 was $159,112 and
            $131,737. At December 31, 2006 and 2005, property and equipment consisted
            of the
            following:
 
 2006
                  
                  
                  2005Vehicles
                  
                  $
                  613,267
                  
                  $
                  51,766Equipment
                  
                  
                  826,565
                  
                  
                  379,967Leasehold
                      improvements
                  
                  
                  53,296
                  
                  
                  29,958Furniture
                      and fixtures
                  
                  
                  26,939
                  
                  
                  26,938Total
                      property and equipment
                  
                  
                  1,520,067
                  
                  
                  488,629Accumulated
                      depreciation
                  
                  
                  (1,120,170
                  )
                  
                  (381,690
                  )Property
                      and equipment, net
                  
                  $
                  399,897
                  
                  $
                  106,939
  
 **NOTE
            5 - Film Licenses**
 
 
 The
            Company evaluates the recoverability of its long lived assets in accordance
            with
            Statement of Financial Accounting Standards No. 144, “Accounting for Impairment
            or Disposal of Long-Lived Assets,” which generally requires the Company to
            assess these assets for recoverability whenever events or changes in
            circumstance indicate that the carrying amount of such assets may not
            be
            recoverable. The Company considers historical performance and future
            estimated results
            in its evaluation of potential impairment and then compares the carrying
            amount
            of the asset to the estimated non-discounted future cash flows expected
            to
            result from the use of the asset. If such assets are considered to be
            impaired,
            the impairment recognized is measured by comparing projected individual
            segment
            discounted cash flow to the asset segment carrying values. The estimation
            of
            fair value is in accordance with AICPA Statement of Position 00-2,
            Accounting by Producers and Distributors of Film. Actual results may
            differ from
            estimates and as a result the estimation of fair values may be adjusted
            in the
            future.
  The
            Company has historically been engaged in acquiring film rights from independent
            producers and distributing these rights to domestic and international
            territories on behalf of the producers to various media (i.e. DVD, satellite,
            home video, pay-per view, pay television, television, and independent
            syndicated
            television stations). For the past several years, we have reduced our
            efforts in
            the distribution of film licenses primarily because of the resources
            required to
            continue in today's global markets and deal with issues such as electronic
            media
            and piracy. At the end of each year, 2006 and 2005, we evaluated our
            film
            library, taking into account the revenue generated over the past several
            years,
            the resources available to us to continue to pursue opportunities in
            this area
            and the resources necessary to maintain our rights against international
            piracy
            and copyright infringement. The Company took a charge of approximately
            $296,000
            in 2006 and $1.7 million in 2005. While we have not discontinued this
            line of
            business and will engage in the sale or exploitation of film licenses
            if and
            when opportunities are available, we will at this time not aggressively
            devote
            the resources of the Company in this area.
   F-13
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   Bas                
            Based upon the Company's estimated net present value of future revenue
            as of
            December 31, 2006, the following shows the anticipated film forecast
            revenue.
 
  #
                      of Films
                  
                  
                  Expiration
                      of Film License & Book Value
                  
                  
                  Film
                      Forecast Revenue
                  
                  
                  %8
                  
                  
                  2007
                  
                  $
                  12,200
                  
                  
                  5.8514
                  
                  
                  2009
                  
                  
                  17,600
                  
                  
                  8.4315
                  
                  
                  2011
                  
                  
                  29,100
                  
                  
                  13.9312
                  
                  
                  2013
                  
                  
                  48,700
                  
                  
                  23.3418
                  
                  
                  2014
                  
                  
                  72,700
                  
                  
                  34.8218
                  
                  
                  2017
                  
                  
                  20,400
                  
                  
                  9.793
                  
                  
                  2019
                  
                  
                  8,000
                  
                  
                  3.8488
                  
                  
                  
                  
                  $
                  208,700
                  
                  
                  100.00
 
 **NOTE
            6 - Notes Payable and Capitalized Leases**
 
 The
            following is a summary of the notes payable and capitalized leases on
            the
            balance sheet at December 31, 2006 and 2005
 
 7%
                      Convertible Notes maturing in 2007
                  
                  $
                  50,000
                  
                  $Capitalized
                      vehicle leases, payable in monthly installments, bearing interest
                      at
                      varying interest rates, maturing in 2011
                  
                  
                  159,573
                  
                  
                  -8%
                      Callable Secured Convertible Notes maturing 2009 (net of discount
                      of
                      $527,710)
                  
                  
                  225,374
                  
                  
                  24,610Less
                      current portion
                  
                  
                  139,587
                  
                  
                  -Long
                      term portion
                  
                  $
                  295,360
                  
                  $
                  24,610
 
  The
              Company currently has a bank line of credit of $100,000 of which it has
              used $46,000 as of December 31,2006 at an interest rate of 7.75% with
              a maturity
              on November 2, 2007.
 7%
            Convertible Promissory Notes
 
 During
            the third quarter of 2004, the Company commenced an offering to sell
            up to
            $2,000,000 of 7% convertible debentures due May 24, 2007 (the “debentures”). As
            of December 31, 2005 the Company received $1,545,000 through the sale
            of the
            debentures. The debentures were sold in varying amounts, all with the
            same
            terms.
 
 Each
            debenture holder was granted warrants to purchase shares of the Company’s common
            stock at fifty (50%) percent for each dollar invested at a price of $0.65.
            The
            term of the warrants is five years. At December 31, 2005, the Company
            granted
            772,500 warrants to the debenture holders, none of the warrants were
            exercised.
 
 The
            debentures bear interest at the rate of 7% per annum and are convertible
            into
            shares of common stock of the Company. If on the day after the first
            anniversary
            of the date of the debenture (i) the market price of the Company’s common stock
            is $1.00, or more for more than ten trading days, or (ii) the Company
            completes
            a secondary offer yielding the Company $5 million or more in gross proceeds,
            then the Company has the right to cause the holders of the debentures
            to convert
            the entire principal amount of the debentures. The Company may redeem
            the
            debenture at any time after their second anniversary.
   F-14
 
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   During
            the fourth quarter of 2005, the Company offered the debenture holders
            the
            opportunity for 30 days to convert their debenture and accrued interest
            into the
            Company’s common stock at a conversion rate of $0.10. As of December 31, 2005,
            $1,495,000 of the debentures along with $118,100 of accrued interest
            was
            converted.
 
 As
            a
            result of the lower conversion price offered by the Company, a conversion
            expense of $642,000 was recorded to reflect value of the additional shares
            to
            convert to common stock issued. The Company did not reprice the warrants
            which
            were exercisable at $0.65.
 
 8%
            Callable Secured Convertible Notes
  On
            December 28, 2005, we entered into a financing arrangement involving
            the sale of
            an aggregate of $1,000,000 principal amount of callable secured convertible
            notes and stock purchase warrants to buy 1,000,000 shares of our common
            stock and
            on
            March 14, 2006, we entered into a financing arrangement involving the
            sale of an
            additional $300,000 principal amount of callable secured convertible
            notes and
            stock purchase warrants to buy 7,000,000 shares of our common stock .
            The
            callable secured convertible notes are due and payable, with 8% interest,
            unless
            sooner converted into shares of our common stock. Although we currently
            have
            $ 800,000 callable
            secured convertible notes outstanding, the investor is obligated to purchase
            additional callable secured convertible notes in the aggregate amount
            of
            $500,000. In addition, any event of default such as our failure to repay
            the
            principal or interest when due, our failure to issue shares of common
            stock upon
            conversion by the holder, our failure to timely file a registration statement
            or
            have such registration statement declared effective, breach of any covenant,
            representation or warranty in the Securities Purchase Agreement. In December,
            2006, $1,915 of the callable secured convertible notes were converted
            into
            152,674  shares of common stock. We anticipate that the full amount of the
            callable secured convertible notes will be converted into shares of our
            common
            stock, in accordance with the terms of the callable secured convertible
            notes.
            If we are required to repay the callable secured convertible notes, we
            would be
            required to use our limited working capital and raise additional funds.
            If we
            were unable to repay the notes when required, the note holders could
            commence
            legal action against us and foreclose on all of our assets to recover
            the
            amounts due. Any such action would require us to curtail or cease
            operations.
 
 Due
            to
            the indeterminate number of shares which might be issued under the embedded
            convertible host debt conversion feature of these callable
            secured convertible notes ,
            the
            Company is required to record a liability relating to both the detachable
            warrants and embedded convertible feature of the callable
            secured convertible notes payable
            (included in the liabilities as a “derivative liability”).
 
 The
            accompanying financial statements comply with current requirements relating
            to
            warrants and embedded derivatives as described in FAS 133 as follows:
 
 ·
                The
                    Company treats the full fair market value of the derivative and
                    warrant
                    liability on the convertible secured debentures as a discount
                    on the
                    debentures (limited to their face value). The excess, if any,
                    is recorded
                    as an increase in the derivative liability and warrant liability
                    with a
                    corresponding increase in Loss on adjustment of the derivative
                    and warrant
                    liability to fair value. 
 ·
                Subsequent
                    to the initial recording, the change in the fair value of the
                    detachable
                    warrants, determined under the Black-Scholes option pricing formula
                    and
                    the change in the fair value of the embedded derivative (utilizing
                    the
                    Black-Scholes option pricing formula) in the conversion feature
                    of the
                    convertible debentures are recorded as adjustments to the liabilities
                    as
                    of each balance sheet date with a corresponding change in Loss
                    on
                    adjustment of the derivative and warrant liability to fair
                    value. 
 ·
                The
                    expense relating to the change in the fair value of the Company’s stock
                    reflected in the change in the fair value of the warrants and
                    derivatives
                    (noted above) is included in other income in the accompanying
                    consolidated
                    statements of operations. 
 **NOTE
            7 - Shareholders' Equity**
 
 The
            Company issued common stock through various private placements and the
            exercise
            of options. The prices at which the shares were negotiated and sold varied,
            depending upon the bid and ask prices of the Company's common stock quoted
            on
            the OTCBB stock exchange. In the aggregate, the Company received $325,000
            for
            3,250,000 shares of common stock in 2005 and none in 2006.
 
 In
            September 2001, the Company issued 150,000 shares of its common stock
            in
            exchange for a short-term promissory note for $105,000, maturing in October
            2001. The subscriber to the shares defaulted upon the maturity of the
            note. The
            Company has pursued collection and has obtained a judgment in New York.
            Further,
            the Company filed the judgment in New Jersey, the state in which the
            subscriber
            resides. During December 2004, the Company agreed to a settlement consisting
            of
            four payment totaling $130,000 over the period December 2004 through
            April 2005.
            In early 2005, after payments totaling $50,000, the subscriber again
            defaulted
            on the settlement. During April 2005, the Company agreed to a final settlement
            payment of $70,000 bringing the total proceeds to $120,000. The total
            legal and
            collection costs for the matter are approximately $50,000. A partner
            in one of
            the law firms representing the Company is a member of the Company's board
            of
            directors.
 
 In
            2005,
            the Company issued 3,869,000 shares of the Company's common stock to
            employees
            and officers as compensation, valued at $287,361 and none in
            2006.
  In
            connection with various expenses and payables for operating activities,
            the
            Company issued 2,718,000 shares valued at $160,236 in 2005 and none in
            2006.
 Net
              (loss) per common share for 2006 and 2005 has been computed by dividing
              net
              (loss), after preferred stock dividend requirements of $6,086 and $6,086
              respectively, by the weighted average number of common shares outstanding
              throughout the year of 14,556,675 and 18,601,834, respectively.
  F-15
 
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   Stock-Based
            Compensation
  Prior
              to
              December 15, 2005, the Company accounted for employee stock options
              in
              accordance with Accounting Principles Board Opinion No. 25 (APB 25),
              "Accounting
              for Stock Issued to Employees." Under APB 25, the Company recognizes
              no
              compensation expense related to employee stock options, as no options
              were
              granted at a price below the market price on the day of
              grant.
 
 The
            Company accounts for employee stock options in accordance with Accounting
            Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued
            to
            Employees." Under APB 25, the Company recognizes no compensation expense
            related
            to employee stock options, as no options were granted at a price below
            the
            market price on the day of grant.
 
 Financial
            Accounting Statement No. 123 "Accounting for Stock Based Compensation"
            (FAS
            123), which the
            Company adopted on December 15, 2005,prescribes the recognition of
            compensation expense based on the fair value of options on the grant
            date,
            allows companies to continue applying APB 25 if certain pro forma disclosures
            are made assuming hypothetical fair value method application. See Note
            9 -
            Incentive Compensation Plans - pro forma disclosures required by FAS
            123 plus
            additional information on the Company's stock options.
 
 Options
            Granted
 
 A
            summary
            of option transactions for the two years ended December 31, 2006, follows:
 
 Options
                  
                  
                  Weighted
                      average option priceOutstanding
                      at December 31, 2004
                  
                  
                  875,000
                  
                  
                  0.20Granted
                  
                  
                  300,000
                  
                  
                  0.31Exercised
                  
                  
                  -
                  
                  
                  -Returned/Expired
                  
                  
                  -
                  
                  
                  -Outstanding
                      at December 31, 2005
                  
                  
                  1,175,000
                  
                  $
                  0.23Granted
                  
                  
                  -
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  -Returned/Expired
                  
                  
                  -
                  
                  
                  -Outstanding
                      at December 31, 2006
                  
                  
                  1,175,000
                  
                  $
                  0.23
 
 12%
            Convertible Non-Voting Preferred Stock
 
 The
            Company's 12% non-voting convertible Preferred Stock entitles the holder
            to
            dividends equivalent to a rate of 12% of the Preferred Stock liquidation
            preference of $2.00 per annum (or $.24 per annum) per share payable quarterly
            on
            March 1, June 1, September 1, December 1 in cash or common stock of the
            Company
            having an equivalent fair market value. At December 31, 2006, 25,357
            shares of
            the Non-Voting Preferred Stock were outstanding.
 
 On
            February 7, 2006, the Board of Directors authorized the issuance of shares
            of
            the Company's common stock or cash, which shall be at the discretion
            of the
            Chief Executive Officer in order to pay the accrued preferred stock dividends.
            Accrued and unpaid dividends at December 31, 2006, were $28,897. Dividends
            will
            accumulate until such time as earned surplus is available to pay a cash
            dividend
            or until a post effective amendment to the Company's registration statement
            covering a certain number of common shares reserved for the payment of
            Preferred
            Stock dividends is filed and declared effective, or if such number of
            common
            shares are insufficient to pay cumulative dividends, then until additional
            common shares are registered with the Securities and Exchange Commission
            (SEC).
 
 The
            Company's Preferred Stock is convertible into shares of Common Stock
            at a rate
            of two shares of  Common Stock (
            subject
            to adjustments)for each share of Preferred Stock, at the option of the
            Company, at any time on not less than 30 days' written or published notice
            to
            the Preferred Stockholders of record, at a price $2.00 per share (plus
            all
            accrued and unpaid dividends). The holders of the Preferred Stock have
            the
            opportunity to convert shares of Preferred Stock into Common Stock during
            the
            notice period. The Company does not have nor does it intend to establish
            a
            sinking fund for the redemption of the Preferred Stock.  As
            adjusted, the outstanding shares of Preferred Stock would currently be
            converted
            into fifteen shares of Common Stock.
 
 Series
            B
            Voting Preferred Stock
 
 The
            Company filed a Certificate of Designation of Series B Convertible Preferred
            Stock on January 4, 2006, pursuant to which the Company authorized for
            issuance
            135,000 shares of Series B Preferred Stock, par value $0.10 per share,
            which
            shares are convertible after the earlier of (i) forty-five days after
            the
            conversion of the 8% callable secured convertible notes issued in our
            recent
            financing, or (ii) 12 months after this registration statement is declared
            effective, at a conversion price equal to the volume weighted average
            price of
            our common stock, as reported by Bloomberg, during the ten consecutive
            trading
            days preceding the conversion date. We issued an aggregate of 117,493
            shares of
            Series B Preferred Stock to a group of our current shareholders in exchange
            for
            an aggregate of 23,498,109 shares of our common stock. The holders of
            Series B
            Preferred Stock shall have the right to vote together with holders of
            the
            Corporation’s Common Stock, on a 30 votes per share basis (and not as a separate
            class), all matters presented to the holders of the Common Stock. The
            foregoing
            shareholders were existing investors before they did the exchange.
 
 
 Series
            C
            Voting Preferred Stock
 
 The
            Company filed a Certificate of Designation of Series C Convertible Preferred
            Stock on March 23, 2006, pursuant to which the Company authorized for
            issuance
            300,000 shares of Series C Preferred Stock, par value $0.10 per share,
            which
            shares are convertible after (i) the market price of the Common Stock
            is above
            $1.00 per share; (ii) the Company’s Common Stock is trading on the OTCBB market
            or the AMEX; (iii) the Company is in good standing; (iv) the Company
            must have
            more than 500 stockholders; (v) the Company must have annual revenue
            of at least
            four million dollars; (vi) the Company does not have at least $100,000
            EBITA for
            the fiscal year preceding the conversion request. The holders of he Series
            C
            Preferred Stock shall have the right to vote together with the holders
            of the
            Corporation’s Common Stock, on a 30 votes per share basis (and not as a separate
            class), on matters presented to the holders of the Common Stock.
   F-16
 
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
    Warrants
 
 A
            summary
            of warrants outstanding at December 31, 2006
 
 Warrants
                  Date
                      Issued
                  Expiration
                      Date
                  Price4,375
                  4/2003
                  4/2008
                  $2.08225,000
                  2/2004
                  2/2009
                  0.05150,000
                  4/2004
                  4/2008
                  0.051,000,000
                  7/2004
                  7/2010
                  0.05133,500
                  8/2004
                  8/2009
                  0.70667,500
                  6/2004
                  6/2009
                  0.65105,000
                  2/2005
                  2/2010
                  0.6521,000
                  4/2005
                  4/2010
                  0.70762,500
                  10/2005
                  10/2010
                  0.65500,000
                  12/2005
                  12/2010
                  0.657,000,000
                  3/2006
                  3/2010
                  0.1010,568,875
 
 
 **NOTE
            8 - Related Parties**
 
 The
            Company paid rent month to month during 2006 and 2005 to a company affiliated
            with the Chief Executive Officer. The rent paid was substantially the
            same as
            that of the affiliate's lease agreements with the landlord. Rent expense
            for the
            years ended December 31, 2006 and 2005 was approximately  $91,000 and
            $87,500, respectively.
  The
            Company acquired distribution rights to two films from a company affiliated
            with
            the Chief Executive Officer for a license period, which expires on June
            5, 2008.
            The Company is obligated to pay the affiliated producers fees at the
            contract
            rate when revenue is recognized from the sale of the films. Such payments
            will
            be charged against earnings. In 2006 and 2005, no payments were made
            to the
            affiliate and no revenue was recognized.
 
 The
            Company owns distribution rights to two films, which were acquired through
            a
            company affiliated with the Chief Executive Officer that is the exclusive
            agent
            for the producers. This exclusive agent is 100% owned by the principal
            shareholder of the Company, but receives no compensation for the sale
            of the
            licensing rights.
 
 Additionally,
            after recoupment of original acquisition costs, the principal shareholder
            has a
            5% interest as a producer in the revenue received by unaffiliated entities.
            The
            Company received $3,000 and $21,250 in revenue relating to these films
            during
            2006 and 2005, respectively.
 
 Throughout
            2006 and 2005, the Company's principal shareholder and officer made loans
            to,
            and payments on behalf of, the Company and received payments from the
            Company
            from time to time. The net outstanding balance due to the officer at
            December
            31, 2006 and 2005, was approximately $305,000 and $186,400,
            respectively.
 
 In
            2005
            Juniper Services utilized the services of a subcontractor that is 85%
            owned by a
            family member of Services’ President. During 2005, payment to this subcontractor
            totaled $14,000 and no payments were made in 2006.
 
 As
            part
            of salary, bonuses and other compensation, the Company's President and
            Chief
            Executive Officer, was issued 786,464 shares of common stock (See Notes 7
            and 9), valued at $62,288 in 2005. No shares were issued as compensation
            in
            2006.
 
 During
            2005 legal services were performed by a firm in which Mr. Barry S. Huston,
            a
            member of the Company's Board of Directors, is a partner. Such services
            related
            to the collection and settlement of various receivables of the Company.
            During
            2005 $13,495 was paid to Mr. Huston or his firm. No legal services were
            rendered
            by Mr. Huston or his firm in 2006 and no fees were paid to Mr. Huston
            or his
            firm in 2006.
 
  **NOTE
            9 - Commitments and Contingencies**
 
  F-17
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   License
            Agreements
 
 In
            some
            instances, film licensors have retained an interest in the future sale
            of
            distribution rights owned by the Company above the guaranteed minimum
            payments.
            Accordingly, the Company may become obligated for additional license
            fees as
            sales occur in the future.
 
 Employment
            Agreements
 
 Mr.
            Hreljanovic has an Employment Agreement with the Company, which expired
            on April
            30, 2005, and that provides for his employment as President and Chief
            Executive
            Officer at an annual salary and the Board of Directors have authorized
            a two
            year extension expiring on April 30, 2007 adjusted annually for the CPI
            Index
            and for the reimbursement of certain expenses and insurance. Based on
            the
            foregoing formula, Mr. Hreljanovic's base salary in 2006 was scheduled
            to be
            approximately $221,893. Additionally, the employment agreement provides
            that Mr.
            Hreljanovic may receive shares of the Company’s common stock as consideration
            for services rendered to the Company.  Due
            to a
            working capital deficit, Mr. Hreljanovic was paid a gross of $5,538 and
            the
            balance of $216,355 was accrued and not paid.
 Under
            the
            terms of this employment agreement, our Chief Executive Officer is entitled
            to
            receive a cash bonus of a percentage of our pre-tax profits if our pre-tax
            profit exceeds $100,000.
 
 Additionally,
            if the employment agreement is terminated early by us after a change
            in control
            (as defined by the agreement), the officer is entitled to a lump sum
            cash
            payment equal to approximately three times his base salary.
 
 On
            February 7, 2005, we executed an employment agreement with Mr. Calderhead
            as
            President of Juniper's Services. The agreement is for three years and
            provides
            for a salary of $140,000 per year plus a sign-on bonus of $10,000. Additionally,
            the agreement provides Mr. Calderhead with options to purchase 300,000
            shares of
            our common stock at a price of $.31 per share. The options expire on
            February 7,
            2010. The agreement also provides for other usual and customary benefits,
            such
            as health insurance and automobile allowances.
 
 Unasserted
            Claims
  The
            Company has learned that certain sales of its common stock may have violated
            certain sections of the Securities Act of 1933 and related regulations.
            The
            Company is currently unable to determine the amount of damages, costs
            and
            expenses, if any, that it may incur as a result of that uncertainty.
            As of
            December 31, 2006, no shareholders have asserted any claims against the
            Company.
 
 Going
            Concern
 
 The
            Company did not have sufficient cash to pay for the cost of its operations
            or to
            pay its current debt obligations. The Company raised $300,000, through
            the sale
            of 8% Callable Secured Convertible Debentures for working capital, capital
            purchases and for the payment of debt to date. Among the obligations
            that the
            Company has not had sufficient cash to pay its payroll, payroll taxes
            and the
            funding of its subsidiary operations. Certain employees and consultants
            have
            agreed, from time to time, to receive the Company’s common stock in lieu of
            cash. In these instances, the Company has determined the number of shares
            to be
            issued to employees and consultants based upon the unpaid compensation
            and the
            current market price of the stock. Additionally, the Company registers
            these
            shares so that the shares can immediately be sold in the open
            market.
  The
            fact
            that the Company continued to sustain losses in 2006, had negative working
            capital at December 31, 2006 and still requires additional sources of
            outside
            cash  to sustain operations, continued to create uncertainty about the
            Company’s ability to continue as a going concern. We believe that we will
            not have sufficient liquidity to meet our operating cash requirements
            for the
            current level of operations during the remainder of 2007. We have received
            the
            first of two planned rounds of financing and the investor is obligated
            to
            purchase additional callable secured notes in the aggregate amount of
            $500,000.
            In addition, any event of default such as our failure to repay the principal
            or
            interest when due, our failure to issue shares of common stock upon conversion
            by the holder, our failure to timely file a registration statement or
            have such
            registration statement declared effective, or breach of any covenant,
            representation or warranty in the Securities Purchase Agreement would
            have an
            impact on our ability to meet our operating requirements. We anticipate
            that the
            full amount of the callable secured convertible notes will be converted
            into
            shares of our common stock, in accordance with the terms of the callable
            secured
            convertible notes. If we are required to repay the callable secured convertible
            notes, we would be required to use our limited working capital and raise
            additional funds. If we were unable to repay the notes when required,
            the note
            holders could commence legal action against us and foreclose on all of
            our
            assets to recover the amounts due. Any such action would require us to
            curtail
            or cease operations. Our ability to continue as a going concern is dependent
            upon receiving additional funds either through the issuance of debt or
            the sale
            of additional common stock and the success of management's plan to expand
            operations. Although we may obtain external financing through the sale
            of our securities, there can be no assurance that such financing will be
            available, or if available, that any such financing would be on terms
            acceptable
            to us. If we are unable to fund our cash flow needs, we may have to reduce
            or stop planned expansion or scale back operations and reduce our staff.
   F-18
 
  **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
 The
              Company currently has a bank line of credit of $100,000 of which it has
              used $46,000 as of December 31,2006 at an interest rate of 7.75% with
              a maturity
              on November 2, 2007.
 
 The
            Company has developed a plan to reduce its liabilities and improve cash
            flow
            through expanding operations by acquisition and raising additional funds
            either
            through issuance of debt or equity. The ability of the Company to continue
            as a
            going concern is dependent upon the Company's ability to raise additional
            funds
            either through the issuance of debt or the sale of additional common
            stock and
            the success of Management's plan to expand operations.
 
 The
            Company anticipates that it will be able to raise the necessary funds
            it may
            require for the remainder of 2006 through public or private sales of
            securities.
            If the Company is unable to fund its cash flow needs, the Company may
            have to
            reduce or stop planned expansion, or possibly scale back operations.
            The
            financial statements do not include any adjustments that might be necessary
            if
            the Company is unable to continue as a going concern.
  Leases
 
 The
              Company subleases the New York office from Entertainment Financing
              Inc.(“EFI),
              an entity 100% owned by our Chief Executive Officer. The master lease
              and the
              Company’s sublease on this space expire on November 30. 2016. EFI has agreed
              that for the term of the sublease the rent paid to it will be substantially
              the
              same rent that it pays under its master lease to the landlord. Rent
              due under
              the lease with EFI is as follows:
 
 Year
                    
                    
                    Amount2007
                    
                    $
                    54,5802008
                    
                    
                    56,3532009
                    
                    
                    58,1852010
                    
                    
                    60,0762011
                    
                    
                    62,028Thereafter
                    
                    
                    335,477
 
 
  The
              company has various equipment leases expiring through April 2009.  Minimum
              future lease payments for these leases are as follows:
  For
                        the Year Ending 20062007
                    
                    
                    88,5662008
                    
                    
                    54,9602009
                    
                    
                    27,9192010
                    
                    
                    27,9192011
                    
                    
                    7,304$
                    191,704
 
 **NOTE
            10 - Incentive Compensation Plans**
 
 The
            Company adopted the 2004 Consultant Stock Plan, which supplements all
            previously
            adopted plans. These plans allow the Company to grant incentive stock
            options,
            non-qualified stock options and stock appreciation rights (collectively
            "options"), to employees, including officers, and to non-employees involved
            in
            the continuing development and success of the Company. The terms of the
            options
            and the option prices are to be determined by the Board of Directors.
            The
            options will not have an expiration date later than ten years (five years
            in the
            case of a 10% or more stockholders).
 
 At
            December 31, 2006, for all plans prior to the 2004 Plan, all options
            issued
            under the Plan were granted and either exercised or cancelled.
  Under
                    the
                        2003 Equity Incentive Plan an aggregate of 1,450,168 options
                        have been
                        issued; and
 Under
                    the
                        2003 Equity Incentive Plan an aggregate of 1,450,168 options
                        have been
                        issued; and
 Under
                    the
                        2002 Plan an aggregate of 472,500 options were
                        issued.
 **NOTE
            11 - Stock Base Compensation**
 
 The
              Company has stock-based compensation plans, as described above. The
              Company
              applied APB Opinion 25, Accounting for Stock Issued to Employees, and
              related
              Interpretations in accounting for its plan until December 15, 2005,
              when it
              adopted Financial Accounting Statement No. 123 "Accounting for Stock
              Based
              Compensation" (FAS 123). Accordingly, no compensation cost has been
              recognized
              for its fixed stock option plan or for options issued to non-employees
              for
              services performed. Had employee compensation for the Company's stock
              options
              been recognized based on the fair value on the grant date, the Company's
              income
              from continuing operations and earnings per share for the two years
              ended
              December 31, 2006, would have been impacted as shown in the following
              table;
   December
                      31, 2006
                  
                  December
                      31, 2005Net
                      IncomeAs
                    reported
                  
                  $
                  (1,741,625)
                  
                  $
                  (6,069,680)Pro
                    Forma
                  
                  $
                  (1,741,625)
                  
                  $
                  (6,069,680)Basic
                      and diluted earnings (loss) per shareAs
                    reported
                  
                  $
                  (0.12)
                  
                  $
                  (0.33)Pro
                      Forma
                  
                  $
                  (0.12)
                  
                  $
                  (0.33)
 
  F-19
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   **NOTE
            12 - Income Taxes**
 
 For
            the
            years ended December 31, 2006 and 2005, no provision was made for Federal
            and
            state income taxes due to the losses incurred during these periods. As
            a result
            of losses incurred through December 31, 2006, the Company has net operating
            loss
            carryforwards of approximately $23.9 million. These carry forwards expire
            through 2026.
 
 In
            accordance with SFAS No. 109 "Accounting for Income Taxes", the Company
            recognized deferred tax assets of $9,799,000 at December 31, 2006. The
            Company
            is dependent on future taxable income to realize deferred tax assets.
            Due to the
            uncertainty regarding their utilization in the future, the Company has
            recorded
            a related valuation allowance of $9,799,000. Deferred tax assets at December
            31,
            2006 primarily reflect the tax effect of net operating loss carry
            forwards.
 
 **NOTE
            13 - New Wave Communications Acquisition**
 
 On
            December 30, 2005, Juniper Services entered into a binding Letter of
            Intent with
            New Wave providing for the purchase by Juniper Services of all outstanding
            shares of New Wave. New Wave’s business is the deployment, construction and
            maintenance of wireless communications towers and related equipment.
            Services
            agreed to pay New Wave $817,000 as follows: $225,000 in cash and $592,000
            paid
            by the issuance of 19,734 shares of Series B Voting Preferred Stock.
            On March
            16, 2006, Services consummated the acquisition of New Wave by entering
            into a
            Stock Exchange Agreement and Plan of Reorganization with New Wave.
 
 **NOTE
            14- Business Segment Information**
 
 The
            operations of the Company are divided into two business segments:
  1.
                Broadband
                    installation and wireless infrastructure services providing
                    wireless/tower/antenna system services to leading telecommunications
                    companies as well as site surveys, tower construction and tower
                    antenna
                    installation to leading tower management companies. The Company
                    markets
                    broadband installation and wireless infrastructure services throughout
                    the
                    United States. 
 2.
                Film
                    distribution services consisting of the acquisition and distribution
                    of
                    rights to films to the domestic as well as the foreign market
                    in the DVD
                    satellite, video and pay/cable. The Company's films licensing
                    are
                    available to be marketed throughout the
                    world.     
 2006
                  
                  
                  2005_Revenue:Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  4,674,293
                  
                  $
                  525,104Film
                      Distribution Services
                  
                  
                  6,600
                  
                  
                  55,400$
                  4,680,893
                  
                  $
                  580,504Cost
                      of Operations:Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  3,416,340
                  
                  $
                  486,878Film
                      Distribution Services
                  
                  
                  
                  
                  
                  28,075$
                  3,416,340
                  
                  $
                  514,953Operating
                      Income (Loss):Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  389,364
                  
                  $
                  (1,189,818
                  )Film
                      Distribution Services
                  
                  
                  (68,171
                  )
                  
                  (1,712,424
                  )Corporate
                      & Other
                  
                  
                  (1,307,396
                  )
                  
                  (3,161,352
                  )$
                  ($986,203
                  )
                  $
                  (6,063,594
                  )Indentifiable
                      Assets:Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  1,232,183
                  
                  $
                  166,639Film
                      Distribution Services
                  
                  
                  232,346
                  
                  
                  496,986Corporate
                      & Other
                  
                  
                  81,248
                  
                  
                  460,366Total
                      Consolidated Assets
                  
                  $
                  1,545,777
                  
                  $
                  1,123,991Depreciation
                      Expense:Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  111,957
                  
                  $
                  102,691Film
                      Distribution Services
                  
                  
                  5,806
                  
                  
                  28,075Corporate
                      & Other
                  
                  
                  41,349
                  
                  
                  28,046$
                  159,112
                  
                  $
                  158,812Capital
                      Expenditures:Broadband
                      Installation & Wireless Infrastructure Services
                  
                  $
                  1,34,052,
                  
                  $
                  5,622Film
                      Distribution Services
                  
                  
                  31,007
                  
                  
                  (150,000
                  )$
                  165,069
                  
                  $
                  (144,378
                  )
  
 F-20
 
 **JUNIPER
              GROUP, INC.**
 **AND
              SUBSIDIARY COMPANIES**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  The
            types
            of identifiable assets included in that corporate line item primarily
            are cash,
            prepaid expenses, other current assets, other investments and property
            and
            equipment, net of $409,663 of accumulated depreciation
  
 **NOTE
            15 - Quarterly Results of Operations (Unaudited and
            Restated)**
 
 
 2006
                  
                  
                  First
                  
                  
                  Second
                  
                  
                  Third
                  
                  
                  Fourth
                  
                  
                  TotalRevenue
                  
                  $
                  1,158,889
                  
                  $
                  1,214,435
                  
                  $
                  1,399,672
                  
                  $
                  907,897
                  
                  $
                  4,680,893Gross
                      Profit (Loss)
                  
                  $
                  257,630
                  
                  $
                  428,945
                  
                  $
                  388,234
                  
                  $
                  189,744
                  
                  $
                  1,264,553Net
                      Income (Loss)
                  
                  $
                  (406,412
                  )
                  $
                  (4,788,062
                  )
                  $
                  4,045,264
                  
                  $
                  (552,416
                  )
                  $
                  (1,741,625
                  )Basic
                      and diluted Net Income (Loss) per common share
                  
                  $
                  (0.028
                  )
                  $
                  (0.329
                  )
                  $
                  0.278
                  
                  $
                  (0.041
                  )
                  $
                  (0.120
                  )2005
                  
                  
                  First
                  
                  
                  Second
                  
                  
                  Third
                  
                  
                  Fourth
                  
                  
                  TotalRevenue
                  
                  $
                  137,397
                  
                  $
                  100,821
                  
                  $
                  142,358
                  
                  $
                  199,928
                  
                  $
                  580,504Gross
                      Profit (Loss)
                  
                  $
                  21,240
                  
                  $
                  7,668
                  
                  $
                  49,005
                  
                  $
                  (12,362
                  )
                  $
                  65,551Net
                      Income (Loss)
                  
                  $
                  (425,614
                  )
                  $
                  (871,037
                  )
                  $
                  (1,423,688
                  )
                  $
                  (3,349,341
                  )
                  $
                  (6,069,680
                  )Basic
                      and diluted Net Income (Loss) per common share
                  
                  $
                  (0.044
                  )
                  $
                  (0.084
                  )
                  $
                  (0.087
                  )
                  $
                  (0.180
                  )
                  $
                  (0.326
                  )
  **NOTE
            16 - Supplemental Cash Flow Information**
 
 Cash
            paid
            for interest totaled $27,222 in and 2006. No cash was paid for interest
            in
            2005.
  In
            connection with the New Wave acquisition, the Companypaid
            $592,000 of the purchase price by the issuance of 19,734 shares of Series
            B
            Voting Preferred Stock.
 During
              2006 the Company issued 250,000 shares of its common stock to consultants
              for
              services valued at $5,000.
 
 During
              2006 the Company issued 152,674 shares of its common stock upon conversion
              of
              $1,916 of its 8% Callable Secured Convertible Notes and issued 720,000
              shares of
              its common stock upon conversion of $14,400 of notes payable to related
              parties.
 
 During
              2005, the Company satisfied a significant number of obligations  without
              the use of cash through the issuance of the Company's common stock.
              None were
              used in 2006. These obligations included:
 ·
                compensation
                    to officers and employees amounting to $291,230; ·
                payment
                    of corporate debt amounting to $2,536,040; ·
                certain
                    corporate expenses amounting to $14,700; 
 **NOTE
            17 -Restatement**
 
 During
            the year ended December, 2005, it was determined that the correct application
            of
            accounting principles had not been applied in 2005 and 2004 for equity
            instruments issued to consultants for services. During 2005 and 2004
            certain
            options issued to consultants as consideration for goods or services
            were not
            charged to stock-based compensation expense. The Company used the Black-Scholes
            option-pricing model to determine the fair value of grants made for the
            years
            ended December 31, 2005 and 2004. The financial statements have been
            restated to
            reflect a charge to stock-based compensation expense of $3,150 for the
            year
            ended December 31, 2005.
 
 The
            restatement for the fair value of the options has no effect on the Company’s
            actual or reported cash flow. The restatement does, however, affect the
            Company’s stated net income and loss per share for the years ended December 31,
            2005. The impact of this correction through December 31, 2005 is to increase
            additional paid in capital by $506,439 and to increase accumulated deficit
            by
            $506,439. The stock-based compensation expense is not deductible for
            tax
            purposes. As a result, this adjustment has no effect on the Company’s net
            operating loss carryforward or deferred tax asset.
 
 Subsequently,
            as discussed in Note 6 above, the Company received $1,545,000 from the
            sale of
            7% Convertible Debentures and $500,000 from the sale of 8% Callable Secured
            Convertible Promissory Notes during the two years ended December 31,
            2005. In
            connection with these notes, the Company issued common stock purchase
            warrants.
            The Company had determined a debt discount and additional paid-in capital
            of
            $376,280 should have been recorded for the portion of the proceeds allocated
            to
            the fair value of the warrants. This discount was to be amortized over
            the two
            and five-year terms of the notes and charged to interest expense. The
            financial
            statements were restated to reflect this debt discount, the related amortization
            expense and additional paid-in capital. The additional amortization increased
            the net loss by $41,970 for the year ended December 31, 2005.
 
 However,
            as also discussed in Note 6 above, the Company further determined that
            due to
            the indeterminate number of shares which might be issued under the embedded
            convertible host debt conversion feature of the 8% Callable
            Secured Convertible Notes ,
            the
            Company is required to record a liability relating to both the detachable
            warrants and embedded convertible feature of the callable
            secured convertible notes payable
            (included in the liabilities as a “derivative liability”) and show the changes
            in the value of these embedded derivative liabilities as a component
            of its
            consolidated net income (loss). As a result, a subsequent restatement
            of the
            Company’s financial statements was required to reflect this change.
    
  F-21
 **JUNIPER
                  GROUP, INC.**
 **AND
                  SUBSIDIARY COMPANIES**
 **NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  The
              restatements for the interim periods ended March 31, 2006, June 30,
              2006 and
              September 30, 2006 and the year ended December 31, 2005 and the interim
              periods
              therein are summarized as follows:
  Balance
            Sheet
 
 March
                      31, 2006
                  June
                      30, 2006
                  September
                      30, 2006Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedTotal
                      assets
                  
                  $
                  1,983,768
                  
                  $
                  1,983,768
                  
                  $
                  2,064,688
                  
                  $
                  2,064,688
                  
                  $
                  2,349,741
                  
                  $
                  2,053,891Notes
                      payable - long term (net of discount)
                  
                  
                  527,006
                  
                  
                  147,369
                  
                  
                  534,343
                  
                  
                  247,950
                  
                  
                  532,505
                  
                  
                  313,328Derivative
                      liabilities
                  
                  
                  
                  
                  
                  1,740,779
                  
                  
                  
                  
                  
                  6,271,114
                  
                  
                  
                  
                  
                  1,711,803Total
                      liabilities
                  
                  
                  2,490,646
                  
                  
                  3,851,788
                  
                  
                  2,756,465
                  
                  
                  8,723,749
                  
                  
                  3,043,143
                  
                  
                  4,667,687Additional
                      paid-in capital
                  
                  
                  21,733,351
                  
                  
                  22,174,592
                  
                  
                  21,733,351
                  
                  
                  22,174,592
                  
                  
                  22,747,990
                  
                  
                  22,174,592Accumulated
                      deficit
                  
                  
                  (25,465,833
                  )
                  
                  (27,268,216
                  )
                  
                  (25,650,732
                  )
                  
                  (32,059,257
                  )
                  
                  (26,666,996
                  )
                  
                  (28,013,992
                  )Total
                      shareholders' equity
                  
                  
                  (506,878
                  )
                  
                  (1,868,020
                  )
                  
                  (691,777
                  )
                  
                  (6,659,061
                  )
                  
                  (693,402
                  )
                  
                  (2,613,796
                  )Total
                      liabilities and shareholders' equity
                  
                  $
                  1,983,768
                  
                  $
                  1,983,768
                  
                  $
                  2,064,688
                  
                  $
                  2,064,688
                  
                  $
                  2,349,741
                  
                  $
                  2,053,891**Statements
                      of Operations:**Three
                      Months Ended
                  Three
                      Months Ended
                  Three
                      Months EndedMarch
                      31, 2006
                  June
                      30, 2006
                  September
                      30, 2006Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  57,891
                  
                  $
                  57,891
                  
                  $
                  61,674
                  
                  $
                  61,674
                  
                  $
                  81,654
                  
                  $
                  81,654Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  45,753
                  
                  
                  
                  
                  
                  72,827
                  
                  
                  2,432
                  
                  
                  69,647Stock-based
                      compensation expenseUnrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  (21,001
                  )
                  
                  
                  
                  
                  4,530,336
                  
                  
                  
                  
                  
                  (4,559,312
                  )Net
                      loss
                  
                  $
                  (380,138
                  )
                  $
                  (404,891
                  )
                  $
                  (183,378
                  )
                  $
                  (4,786,541
                  )
                  $
                  (149,461
                  )
                  $
                  4,046,786Loss
                      per share, basic and diluted
                  
                  $
                  (0.027
                  )
                  $
                  (0.028
                  )
                  $
                  (0.013
                  )
                  $
                  (0.329
                  )
                  $
                  (0.010
                  )
                  $
                  (0.015
                  )Six
                      Months Ended
                  Nine
                      Months Ended**Cumulative:**
                  
                  June
                      30, 2006
                  September
                      30, 2006Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  119,565
                  
                  $
                  119,565
                  
                  $
                  201,219
                  
                  $
                  201,219Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  121,559
                  
                  
                  11,754
                  
                  
                  191,206Stock-based
                      compensation expenseUnrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  4,509,336
                  
                  
                  
                  
                  
                  (49,977
                  )Net
                      loss
                  
                  $
                  (563,516
                  )
                  $
                  (5,194,411
                  )
                  $
                  (722,299
                  )
                  $
                  (1,147,624
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.039
                  )
                  $
                  (0.357
                  )
                  $
                  (0.051
                  )
                  $
                  (0.080
                  )
  
  F-22
 **JUNIPER
                  GROUP, INC.**
 **AND
                  SUBSIDIARY COMPANIES**
 **NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
  Balance
            Sheets
  
 March
                      31, 2005
                  June
                      30, 2005
                  September
                      30, 2005
                  December
                      31, 2005Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedTotal
                      assets
                  
                  $
                  3,573,243
                  
                  $
                  3,573,243
                  
                  $
                  2,992,454
                  
                  $
                  2,992,454
                  
                  $
                  2,935,866
                  
                  $
                  2,935,866
                  
                  $
                  1,123,991
                  
                  $
                  1,123,991Notes
                      payable - long term (net of discount)
                  
                  
                  1,439,682
                  
                  
                  1,186,253
                  
                  
                  1,545,000
                  
                  
                  1,296,154
                  
                  
                  475,000
                  
                  
                  444,797
                  
                  
                  300,000
                  
                  
                  24,610Derivative
                      liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,461,779Total
                      liabilities
                  
                  
                  3,061,727
                  
                  
                  2,779,339
                  
                  
                  3,244,536
                  
                  
                  2,968,252
                  
                  
                  1,895,536
                  
                  
                  1,839,417
                  
                  
                  2,001,412
                  
                  
                  3,210,612Additional
                      paid-in capital
                  
                  
                  21,066,523
                  
                  
                  21,906,487
                  
                  
                  21,148,124
                  
                  
                  21,986,655
                  
                  
                  23,597,891
                  
                  
                  24,460,277
                  
                  
                  21,571,050
                  
                  
                  22,162,291Accumulated
                      deficit
                  
                  
                  (20,608,602
                  )
                  
                  (21,147,931
                  )
                  
                  (21,456,156
                  )
                  
                  (21,998,635
                  )
                  
                  (22,637,347
                  )
                  
                  (23,422,324
                  )
                  
                  (25,082,999
                  )
                  
                  (26,861,804
                  )Total
                      shareholders' equity
                  
                  
                  511,516
                  
                  
                  793,904
                  
                  
                  242,082
                  
                  
                  24,202
                  
                  
                  1,011,565
                  
                  
                  1,096,449
                  
                  
                  (877,421
                  )
                  
                  (2,086,621
                  )Total
                      liabilities and shareholders' equity
                  
                  $
                  3,573,243
                  
                  $
                  3,573,243
                  
                  $
                  2,992,454
                  
                  $
                  2,992,454
                  
                  $
                  2,935,866
                  
                  $
                  2,935,866
                  
                  $
                  1,123,991
                  
                  $
                  1,123,991
 
  F-23
 **JUNIPER
                  GROUP, INC.**
 **AND
                  SUBSIDIARY COMPANIES**
 **NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(RESTATED)**
   
 **Statements
                      of Operations:**Three
                    Months Ended
                  Three
                      Months Ended
                  Three
                      Months Ended**Three
                      Months:**
                  
                  March
                      31, 2005
                  June
                      30, 2005
                  September
                      30, 2005Previously
                      reported
                  
                  
                  
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  37,325
                  
                  $
                  37,325
                  
                  $
                  39,787
                  
                  $
                  76,750
                  
                  $
                  45,022
                  
                  $
                  45,022Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  18,218
                  
                  
                  
                  
                  
                  20,333
                  
                  
                  
                  
                  
                  242,498Stock-based
                      compensation expense
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  -Unrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (920,301
                  )Net
                      loss
                  
                  $
                  (407,396
                  )
                  $
                  (425,619
                  )
                  $
                  (847,554
                  )
                  $
                  869,516
                  
                  $
                  (1,181,190
                  )
                  $
                  (1,423,688
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.0420
                  )
                  $
                  (0.0440
                  )
                  $
                  (0.0820
                  )
                  $
                  (0.0842
                  )
                  $
                  (0.0700
                  )
                  $
                  (0.0867
                  )Six
                      Months Ended
                  
                  
                  Nine
                      Months Ended
                  Year
                      Ended**Cumulative:**
                  
                  June
                      30, 2005
                  September
                      30, 2005
                  December
                      31, 2005Previously
                      reported
                  
                  
                  
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restated
                  
                  
                  Previously
                      reported
                  
                  
                  As
                      restatedInterest
                      Expense
                  
                  $
                  77,112
                  
                  $
                  77,112
                  
                  $
                  122,134
                  
                  $
                  122,134
                  
                  $
                  139,178
                  
                  $
                  139,178Amortization
                      of Debt Discount.
                  
                  
                  
                  
                  
                  38,551
                  
                  
                  
                  
                  
                  281,049
                  
                  
                  
                  
                  
                  263,261Stock-based
                      compensation expense
                  
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  (3,150
                  )
                  
                  -
                  
                  
                  (3,150
                  )Unrealized
                      gains (losses) on derivative liabilities
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (920,301
                  )Net
                      loss
                  
                  $
                  (1,254,950
                  )
                  $
                  (1,293,609
                  )
                  $
                  (2,436,140
                  )
                  $
                  (2,720,339
                  )
                  $
                  (4,881,793
                  )
                  $
                  (6,069,680
                  )Loss
                      per share, basic and diluted
                  
                  $
                  (0.126
                  )
                  $
                  (0.130
                  )
                  $
                  (0.200
                  )
                  $
                  (0.224
                  )
                  $
                  (0.260
                  )
                  $
                  (0.280
                  )
 
  
  F-24
   
 SIGNATURES
 
 In
            accordance with section 13 or 15(d) of the Securities Exchange Act of
            1934, the
            Registrant caused this report to be signed by the undersigned, thereunto
            duly
            authorized.
 
 
 Date:    JUNIPER
            GROUP, INC.
 
  March
            ,  6, 2007
 Vlado
            Paul Hreljanovic
 President
            and
 Chief
            Executive Officer
 
 In
            accordance with the Securities Exchange Act of 1934, this report has
            been signed
            below by the following persons on behalf of the Registrant and in the
            capacities
            and on the dates indicated.
 
 Signatures
                      Titles
                      Date/s/
                          Vlado Paul Hreljanovic
                      Chairman
                          of the Board
                        President,
                          Chief Executive
                        Officer
                          (Principal Executive
                        and
                          Financial Officer)
                      March
                          6,  2007/s/
                          Barry S. Huston
                      Director
                      March
                          6, 2007
 F-25