UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-KSB





(Mark
One)





x ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2007





OR




o     TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______





Commission
File Number: 0-25356





AZZURRA
HOLDING CORPORATION





(Exact
Name of Registrant as Specified in its Charter)








DELAWARE
            
            77-0289371(State
      or Other Jurisdiction of
            
            (IRS
      Employer Identification Number)Incorporation
      or Organization)





6080
CENTRE DRIVE, SUITE 600, LOS ANGELES, CALIFORNIA 90045


(310)
242-5698


(Address
and Telephone Number of Principal Executive Offices)





Securities
registered pursuant to Section 12(b) of the Act:





Securities
Registered Pursuant to Section 12(g) of the Act:


COMMON
STOCK, $0.01 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 Azzurra Holding Corporation was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. YES  o NO x





Check if
there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not 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. YES o NO x





State
issuer’s revenue with it most recent fiscal year, $0.





Indicate
by check mark whether Azzurra Holding Corporation is an accelerated filer
as defined in the Exchange Act Rule 12b-2. YES  NO x





The
aggregate market value of the voting stock held by non-affiliates of Azzurra
Holding Corporation as of July 2, 2008, was approximately$100.00+





Check
whether the issue has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. YES o NO x





On August 14, 2008, 100,000 shares of
Azzurra Holding Corporation’s Common Stock, $0.01 par value, were
outstanding.













TABLE
OF CONTENTS










PAGEPART
      I
            
            2Item
      1. Description of Business
            
            2Item
      2. Description of Properties
            
            3Item
      3. Legal Proceedings
            
            3Item
      4. Submission of Matters to a Vote of Securities
    Holders
            
            34PART
      II
            
            4Item
      5. Market for Common Equity and Related Stockholder
      Matters
            
            4Item
      6. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            
            4Item
      7. Financial Statements
            
            9Item
      8. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosures
            
            9Item
      8A. Control and Procedures
            
            9Item
      8B. Other Information
            
            10PART
      III
            
            11Item
      9. Directors, Executive Officers, Promoters and Control
      Persons
            
            11Item
      10. Executive Compensation
            
            12Item
      11. Security Ownership of Certain Beneficial Owners
    and
            
            13Item
      12. Certain Relationships and Related Transactions
            
            14Item
      13. Exhibits and Reports on Form 8-K
            
            14Item
      14. Principal Accountant Fees and Services
            
            14FINANCIAL
      STATEMENTSReport
      of Cherry, Bekaert & Holland, L.L.P.
            
            15Consolidated
      Balance Sheet at December 31, 2007 (Successor)
            
            16Consolidated
      Statements of Operations for the period July 1, 2007 to December 31, 2007
      (Successor), January 1, 2007 to June 30, 2007 (Predecessor) and the year
      ended December 31, 2006 (Predecessor)
            
            17Consolidated
      Statements of Stockholders' Equity (Deficit) period January 1, 2007 to
      June 30, 2007 (Predecessor) and period July 1, 2007 to December 31, 2007
      (Successor) and for the year ended December 31, 2006
      (Predecessor),
            
            18Consolidated
      Statements of Cash Flows for the period July 1, 2007 to December 31, 2007
      (Successor), January 1, 2007 to June 30, 2007 (Predecessor) and the year
      ended December 31, 2006 (Predecessor)
            
            19Notes
      to Consolidated Financial Statements
            
            20SIGNATURE
      PAGE
            
            33INDEX
      TO EXHIBITS
            
            34














-i-






The
following information contains forward-looking statements, which involve risks
and uncertainties. Forward-looking statements are characterized by words such as
"plan," "expect," "believe," "intend," "would", "will" and similar words. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth under, "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Certain Risk Factors Affecting Azzurra Holding
Corporation," and elsewhere in this Annual Report on Form 10-KSB.





NOTICE
OF FILING OF BANKRUPTCY PETITION, SALE OF OPERATING ASSETS, AND CONFIRMATION OF
JOINT PLAN OF REORGANIZATION





Bankruptcy
Proceedings.





On
October 31, 2006, Azzurra Holding Corporation, formerly, Wave Wireless
Corporation (the “Company,” “we,” “us,” “our” ) filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Code”) in the
United States Bankruptcy Court for the District of Delaware (“Court”).  Our
significant operating losses, working capital deficit, defaults on certain
outstanding debentures, together with the significant cash required to maintain
operations, delays in commercializing next-generation products, and the loss of
a key executive, precipitated the need to seek protection under Chapter 11 of
the Code.





During
the pendency of the bankruptcy proceedings, and with Court approval, the Company
sold substantially all of its assets, including its inventory, manufacturing and
research and development equipment, and its technology.  The Company
retained its SPEEDLAN 9200 product line.





On April
5, 2007, the Company and the Committee of Unsecured Creditors (“Creditors
Committee”) filed a Joint Plan of Reorganization with the Court (“Joint Plan”),
which Joint Plan was amended and restated and filed with the Court on May 2,
2007.  The Joint Plan was confirmed by the Court on June 14,
2007.  Under the terms and conditions of the Joint Plan, as confirmed
by the Court, all equity interests of the Company as of the effective date of
the Joint Plan, June 28, 2007, terminated.  The Joint Plan contained
the following additional major provisions:





SDS
Capital Group SPC, Ltd. ("SDS") became the owner of 80% of the issued and
outstanding shares of common stock, which includes 70% received under the terms
of the Joint Plan, and an additional 10% as a result of SDS’ participation in
the Equity Financing, described below.   In addition, all
priority unsecured claims and administrative claims were paid in full, through
either: (i) payment on the effective date of the Joint Plan; (ii) payment
through an escrow account established with a Plan Administration Trust
(“Trust”); or (iii) payment from the reorganized Company following the allowance
of a claim. The initial funding for the Trust was $250,000 less certain
professional fees and other charges set forth in more detail in the Joint Plan.
This initial funding was provided from funds that were otherwise distributable
to SDS. The Trust is responsible for, among other things, objecting to general
unsecured claims and making distributions, as appropriate, to holders of general
unsecured claims. The Company has no future rights to any Trust assets. The
Joint Plan also permitted general unsecured claimants and preferred shareholders
to participate in an equity financing ("Equity Financing"), pursuant to which
each party was permitted to purchase a portion of 30,000 shares of newly issued
common stock at $1.00 per share, based upon the terms and conditions set forth
in the Joint Plan. As a result of the Equity Financing, three preferred
shareholders each acquired 10,000 shares of our common stock.





In
connection with the confirmation of the Joint Plan, the Company entered into a
Contingent Promissory Note in favor of the Trust (“Contingent Note”). The
Contingent Note provides for a further recovery to the Trust under the terms of
the Joint Plan in the event SDS receives a distribution under the Joint Plan
that exceeds $2,476,658, plus all fees and expenses accrued under the Contingent
Note (the “Maximum Amount”). Under the terms of the Contingent Note, if SDS
receives an amount in excess of the Maximum Amount, the Company will pay to the
Trust an amount equal to 50% of any cash that remains or has accrued after (i)
satisfying the Maximum Amount and all other distributions or dividends required
under the Joint Plan, (ii) reserving cash sufficient to satisfy, in full, all
obligations of, and claims against, the Company that have accrued during the one
year period following the effective date of the Joint Plan, and (iii) reserving
reasonably sufficient cash, in the Company's sole discretion, to fund ongoing
business operations. No amounts were payable under the Contingent Note and the
Contingent Note terminated on June 28, 2008.  SDS has received $1.7
million under the terms of the Joint Plan and no further payments are
expected.




The
Company and SDS also executed a Secured Promissory Note payable by the Company
to SDS in the amount of $100,000 (the “SDS Note”). The SDS Note will only be
issued in the event the Company deems it necessary to provide for its working
capital requirements. Any amounts due and payable SDS are secured by all assets
of the Company under the terms of a Security Agreement.  To date, no
amounts have been advanced under this note.




Sale
of Remaining Assets.





On August
10, 2007, the Company sold its SPEEDLAN product line, for and in consideration
for approximately $100,000, plus the assumption of all warranty obligations
associated with the product line.  The Company determined to sell its
SPEEDLAN product line since sales of the product line had decreased
substantially since confirmation of the Joint Plan, and since the cost to
maintain, support and satisfy warranty obligations did not justify the continued
sale of SPEEDLAN products by the Company.  In addition, sales were not
anticipated to materially increase due to the fact that the SPEEDLAN product was
not competitive, in terms of price or features, with other product offered by
more established, and financially stronger competitors.  As a result
of this sale, the Company has no operating business, and our management and
Board of Directors are exploring opportunities to effect an acquisition of the
Company by merger, exchange or issuance of securities or similar business
combination.





On August
20, 2007, we changed the name of the Company to Azzurra Holding
Corporation.


-1-





PART
1





ITEM
      1.
            DESCRIPTION
      OF BUSINESS





CERTAIN
DISCUSSIONS WHICH FOLLOW REGARDING THE DESCRIPTION OF BUSINESS REFER TO THE
OPERATING BUSINESS PRIOR TO THE FILING OF THE BANKRUPTCY PETITION AND SUBSEQUENT
SALE OF THE COMPANY’S OPERATING BUSINESSES, INCLUDING ITS RMA BUSINESS AND THE
SPEEDLAN PRODUCT LINE.





We were
incorporated in 1991 as a Delaware Corporation.  Our executive offices
are located at 6080 Centre Drive, Suite 600, Los Angeles, California 90045,
and our telephone number is 310-242-5698.  On August 20, 2007, we
changed the name of the Company from Wave Wireless Corporation to Azzurra
Holding Corporation.




Prior
Operations





Prior to
the disposition of our operating businesses, we were a developer of wireless
broadband solutions, offering a portfolio of wireless mesh routers, and fixed
and mobile non-line-of-sight (NLOS) products that could be deployed in all types
of environments.  Our products were used for applications ranging from
mission critical public safety communications, video surveillance, municipal
networks, and private enterprise networks to last mile broadband
access.  First responders, telecom carriers, municipalities, wireless
Internet service providers, utilities, security companies and the military
deployed our products.   We also provided repair, maintenance and
other services to our licensed and other customers worldwide.





On March
28, 2006, a wholly owned subsidiary of the Company was merged with and into
WaveRider Communications Inc. (the “WaveRider Merger”). The WaveRider Merger
brought together complementary business lines, engineering, sales and marketing
compatibilities and technology. The combination of our SPEEDLAN family of mesh
networking products and WaveRider’s Last Mile Solution,
non-line-of-sight, fixed and mobile wireless 900 MHz products provided customers
with a wide range of line-of-sight fixed and non-line-of-sight products and
services.





Following
consummation of the WaveRider Merger, the Company experienced far longer sales
cycles for new products than were expected, certain product availability issues
in connection with its 900 MHz non-line-of-sight products, and continuing delays
in commercializing new mesh products, resulting in substantially lower revenue
in each of these product lines than expected.  Due to the recognition
of lower than anticipated revenue during the quarter ended September 30, 2006,
the Company was required to use a significant amount of its cash resources to
satisfy certain legacy obligations, and the costs incurred in connection with
consummation of the WaveRider Merger.  As a result of these factors,
and the Company’s deteriorating cash position, the Company sold certain non-core
assets and operations in order to satisfy its working capital requirements,
including its interest in WaveRider Communications (Australia) Pty Ltd.
(“WaveRider Australia”), and WaveRider’s Canadian operations, which were sold to
VCom Inc. (“VCom”) (the “VCom Transaction”).   The Company
retained WaveRider’s intellectual property and its North American
operations.





Following
the resignation of the Company’s President and Chief Executive Officer during
the quarter ended September 30, 2006, which materially impacted the Company's
ability to continue to address the ongoing poor operating results in the
Company’s principal business units and the Company’s continuing deteriorating
working capital position, the Company’s Board of Directors elected to sell
WaveRider’s remaining operating and related assets associated with its 900 MHz
product line to VCom.  The purchase price of $1,250,000 was paid and
satisfied by assumption of all amounts owing by the Company or its affiliates
pursuant to the supply agreement between VCom and WaveRider. WaveRider received
$426,000, which was received subsequent to December 31, 2006.





In order
to provide for its immediate working capital needs, and in light of the Board’s
determination that additional equity or debt financing would likely be
unavailable to the Company, the Board of Directors directed management to
explore the sale of certain or all remaining product lines and business units.
These efforts failed to generate sufficient interest to address the Company’s
ongoing working capital needs.  As a result, the Board determined to
seek protection from its creditors, to reorganize under Chapter 11 of the Code,
and to focus on the sale of the SPEEDLAN product line.  The Company
filed a voluntary petition under Chapter 11 of the Code on October 31,
2006.





On
November 2, 2006, the Court ordered the conduct of an auction to sell the
Company’s RMA Business.  As a result of the auction, which was held on
November 13, 2006, we sold the RMA Business for approximately $406,000 in cash,
plus the assumption of certain liabilities.  Also pursuant to a Court
order entered on November 13, 2006, we sold certain de minimus assets totaling
less than $100,000.  As a result of these sales, our continued
operations while under the protection of Chapter 11 of the Code consisted of the
marketing and sale of our SPEEDLAN product line, which was sold subsequent to
the confirmation of the Joint Plan, on August 10, 2007, for approximately
$100,000.


-2-





Current
Business Strategy





Because
of the sale of all of our operating businesses, the Company has no ongoing
operations.  As a result, on August 20, 2007, we changed the name of
the Company to Azzurra Holding Corporation.  The Board has determined
to maintain the Company as a public “shell” corporation, which will seek
suitable business combination opportunities.  The Board believes that
a business combination with an operating company has the potential to create
greater value for the Company’s stockholders than a liquidation or similar
distribution.





Government
Regulation and Legal Uncertainties





The
Company is currently subject to various laws and regulations relating to its
business, including those of the Bankruptcy Code.  The Company must
comply with the Orders of the Bankruptcy Court, and the Joint Plan.





Employees




As of
December 31, 2007, we did not have any full- or part-time
employees.  Our President and Chief Executive Officer, and Chief
Financial Officer, work part-time as a consultant to the Company.






ITEM
      2.
            DESCRIPTION
      OF PROPERTY




We do not
own any real property.  The Company’s corporate headquarters are
located in the offices of our President and Chief Executive Officer, located in
Los Angeles, California.  The Company is not obligated under the terms
of that lease, which continues through April 2009.





ITEM
      3.
            LEGAL
      PROCEEDINGS




On
October 31, 2006, we filed a voluntary petition for relief under Chapter 11 of
the United States Bankruptcy Code (“Code”) in the United States Bankruptcy Court
for the District of Delaware (the “Court”) in order to facilitate the
restructuring of our debt, trade liabilities and other obligations.   On
April 5, 2007, together with the Committee of Unsecured Creditors, we filed a
Joint Plan of Reorganization with the Court (“Joint Plan”), and an amended Joint
Plan was filed on May 2, 2007.  The Joint Plan was confirmed by the
Court on June 14, 2007.  On June 28, 2007, the Joint Plan was declared
effective by the Court.The Company
remains subject to the terms and conditions of the Joint Plan, and orders of the
Court.




ITEM
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS




None




-3-


PART
II





ITEM
      5.
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER
  MATTERS





The
following table sets forth the range of high and low sale prices of our common
stock, as reported on the OTC Bulletin Board for each quarter in 2007 and 2006.
These quotations reflect inter-dealer prices, without retail mark-up, markdown
or commission and may not necessarily represent actual
transactions.   As of September 21, 2006, our common stock was
delisted from the OTC Bulletin Board, and now trades in the “pink
sheets”.





On June
30, 2008, there were three stockholders of record of our common
stock.





PRICE RANGE
      OF COMMON STOCKHIGH
            
            LOWYear
      Ended December 31, 2006:First
      Quarter
            
            $
            0.170
            
            $
            0.090Second
      Quarter
            
            
            0.150
            
            
            0.070Third
      Quarter
            
            
            0.080
            
            
            0.013Fourth
      Quarter
            
            
            0.015
            
            
            0.001Year
      Ended December 31, 2007:First
      Quarter
            
            $
            0.001
            
            $
            0.001Second
      Quarter
            
            
            0.001
            
            
            0.001Third
      Quarter
            
            
            0.001
            
            
            0.001Fourth
      Quarter
            
            
            0.001
            
            
            0.001




DIVIDENDS





To date,
we have not paid any cash dividends on shares of our common stock. We do not
anticipate paying dividends in the foreseeable future.




ITEM
      6.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS





Management's
discussion and analysis of financial condition and results of operations
contains forward-looking statements, which involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth in the section entitled "Risk Factors" beginning on Page 9 of this Annual
Report.





RESULTS
OF OPERATIONS (in Thousands)





During
the quarter ended September 30, 2007, the Company sold all of its remaining
assets and ceased operations.





On June
28, 2007, the Joint Plan became effective.  Pursuant to Fresh Start
Accounting, the Company will discuss in the results of operation below, the
results for the six months ended December 31, 2007, as the Successor Company,
and the results for the six months ended June 30, 2007, as the Predecessor
Company.   The Company determined that the days following June
28, 2007 were non-business days, and accordingly, results through June 28 are
identical to those through June 30, 2007.





Sales





During
the six months ended December 31, 2007 (Successor), the six months ended June
30, 2007 (Predecessor), and the year ended December 31, 2006 (Predecessor), the
Company had no sales due to the discontinuation of all of its product
lines.  See “Discontinued Operations” discussion below.





-4-


Gross
Profit (Loss)





During
the six months ended December 31, 2007 (Successor), the six months ended June
30, 2007 (Predecessor), and the year ended December 31, 2006 (Predecessor), the
Company had no gross profits, as a result of the discontinuation of its product
lines.  See “Discontinued Operations” discussion below.





Research
and Development





During
the six months ended December 31, 2007 (Successor), and the six months ended
June 30, 2007 (Predecessor), the Company did not incur research and development
expenses due to the elimination of research and development
activities.   During the year ended December 31, 2006
(Predecessor), research and development expenses were approximately
$1,059.





Selling
and Marketing





During
the six months ended December 31, 2007 (Successor), and the six months ended
June 30, 2007 (Predecessor), the Company did not incur selling and marketing
expenses due to the elimination of selling and marketing
activities.  During the year ended December 31, 2006 (Predecessor),
selling and marketing expenses were approximately $1,055.





General
and Administrative





During
the six months ended December 31, 2007 (Successor), and the six months ended
June 30, 2007 (Predecessor), general and administrative expenses were
approximately $272 and $601, respectively.  During the year ended
December 31, 2006 (Predecessor), general and administrative expenses were
approximately $526.   The general and administrative expenses
during the 2007 period relates to winding down operations and public company
costs as well as $116 for disputed property taxes.





Impairment
and other charges





During
the year ended December 31, 2006 (Predecessor), the Company evaluated its
business operations with the intent to sell certain product lines and business
units, or enter into strategic relationships for individual product lines and
business units.  An impairment charge of $24,647 was taken as of June
30, 2006, related to the write-down of goodwill and other assets, partially
offset by reductions in prior provisions.





Interest
Expense





During
the six months ended December 31, 2007 (Successor), and the six months ended
June 30, 2007 (Predecessor), interest expense was approximately $0 and $738,
respectively.  During the year ended December 31, 2006 (Predecessor),
interest expense was approximately $675.  Interest expense in the
predecessor periods during both the 2007 and 2006 periods related primarily to
debt with SDS Capital Group SPC, Ltd.





Gain
on Settlement of Accrued Liabilities





For the
six months ended June 30, 2007 (Predecessor), we recorded gains on the
settlement of accrued liabilities of approximately $602,000.  These
gains are the result of negotiations with vendors to reduce amounts owed and
settle outstanding claims outside of those discharged in connection with
confirmation of the Joint Plan.





Financing
Expense





For the
year ended December 31, 2006 (Predecessor) financing expense was approximately
$10,325.  This expense was mainly due to non-cash charges, during the
first quarter of 2006, related to the conversion of promissory notes and debt to
Series J Convertible Preferred Stock, the issue of Series J Convertible
Preferred Stock to consultants in connection with the Company's promissory note
financing, the accretion to face value of the promissory notes and amortization
of deferred financing charges.  During the second quarter of 2006, the
Company failed to file a registration statement related to the sale of the
Series J and J-1 convertible preferred shares and related
warrants.  As a result, a penalty provision in the registration rights
agreement was triggered and the Company accrued an anticipated liability of
$615.


-5-





Derivative
Instrument Income





Derivative
instrument income amounted to $5,140 for the year ended December 31, 2006
(Predecessor).  Derivative instrument income arises from fair value
adjustments for certain financial instruments, such as convertible preferred
stock and warrants to acquire common stock and are classified as liabilities
when either (a) the holder possesses rights to net-cash settlement or (b)
physical or net share settlement is not within the control of the
Company.  In such instances, net-cash settlement is assumed for
financial accounting and reporting, even when the terms of the underlying
contracts do not provide for net-cash settlement.  Such derivative
financial instruments are initially recorded at fair value with subsequent
changes in the fair value charged or credited to operations each reporting
period.  Derivative instrument income in 2006 resulted principally
from the drop in the Company's stock price on which the carrying value of
derivative liabilities is based.





Other
Income, net





During
the six months ended December 31, 2007 (Successor), the six months ended June
30, 2007 (Predecessor) and the year ended December 31, 2006 (Predecessor), other
income (loss), net, consisted of:





SUCCESSOR
            
            
            PREDECESSORSix
      Months Ended December 31, 2007
            
            
            Six
      Months Ended
              June
      30,
              2007
            
            
            Year
      Ended December 31, 2006Gains
      (losses) on disposals of property and equipment
            
            $
            -
            
            
            $
            13
            
            
            $
            (366
            )Royalties
            
            
            -
            
            
            
            -
            
            
            
            146Gain
      on sale of patents for licensed products
            
            
            -
            
            
            
            -
            
            
            
            30Property
      tax refund
            
            
            -
            
            
            
            -
            
            
            
            89Other
      income (expenses), net
            
            
            39
            
            
            
            134
            
            
            
            43Total other income (loss),
      net
            
            $
            39
            
            
            $
            147
            
            
            $
            (58
            )





Reorganization
Items




For the
six months ended June 30, 2007 (Predecessor), the Company recorded gains from
the reorganization pursuant to the Joint Plan of $6,207, and fresh start
accounting adjustments of $243 to adjust other liabilities to their fair
values.




Bankruptcy
Expense





During
the six months ended December 31, 2007 (Successor) and six months ended June 30,
2007 (Predecessor) the Company incurred expenses related to the Joint Plan of
$95 and $255, respectively.  These expenses included legal fees, court
mandated fees and the cost to extend the Company’s current directors and
officers insurance policy.





Gain
(Loss) from Discontinued Operations


-6-





During
the six months ended December 31, 2007 (Successor), the six months ended June
30, 2007 (Predecessor), and the year ended December 31, 2006 (Predecessor), gain
(loss) on discontinued operations relates to the disposal of all our operations
and consisted of the following:





SUCCESSOR
            
            
            PREDECESSORSix
      Months Ended December 31, 2007
            
            
            Six
      Months Ended
              June
      30,
              2007
            
            
            Year
      Ended December 31, 2006Revenues
            
            $
            -
            
            
            $
            343
            
            
            $
            8,466Cost
      of sales
            
            
            -
            
            
            
            90
            
            
            
            6,009Gross
      profit
            
            
            -
            
            
            
            253
            
            
            
            2,457Operating
      expenses
            
            
            -
            
            
            
            -
            
            
            
            (3,085
            )Gain
      (loss) on disposal of assets
            
            
            (22
            )
            
            
            438
            
            
            
            1,008Gain
      (Loss) from discontinued operations
            
            $
            (22
            )
            
            $
            691
            
            
            $
            380





The
Company received $438,000 on the settlement of a royalty agreement with
WaveRider Australia, which was sold during 2006.





LIQUIDITY
AND CAPITAL RESOURCES





As of
December 31, 2007, the Company had cash of $139 compared to approximately $1,849
in cash and cash equivalents at December 31, 2006. Cash decreased in 2007
primarily to satisfying the terms of the Joint Plan, including debt repayment of
$1,700.





The
Company currently has no operations and intends to locate and combine with an
existing, privately-held company that is profitable or which, in management’s
view, has growth potential, irrespective of the industry in which it is
engaged.  However, the Company does not intend to combine with a
private company, which may be deemed to be an investment company subject to the
Investment Company Act of 1940.  A combination may be structured as a
merger, consolidation, exchange of the Company’s common stock for stock or
assets or any other form which will result in the combined enterprise becoming a
publicly-held corporation.





Pending
negotiation and consummation of a combination, the Company anticipates that it
will have, aside from carrying on its search for a combination partner, no
business activities, and, thus, will have no source of revenue.  To
continue as a going concern, pending consummation of a transaction, the Company
intends to either seek additional equity or debt financing.  No
assurances can be given that such equity or debt financing will be available to
the Company.  Should the Company need to incur any significant
liabilities prior to a combination transactions, including those associated with
the current minimal level of general and administrative expenses, it may not be
able to satisfy those liabilities in the event it was unable to obtain
additional equity or debt financing.





ACCOUNTING
AND REPORTING DEVELOPMENTS





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 157 (“FAS 157”), Fair Value
Measurements.  FAS 157 defines fair value, establishes a
framework and gives guidance regarding the methods used for measuring fair
value, and expands disclosures about fair value measurements.  FAS 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years.  The
adoption of FAS 157 is not expected to have any impact on the
Company.  FASB Staff Position (FAS 157-2) Effective Date of FASB Statement No.
157 delays the effective date of FAS 157 for nonfinancial assets and
nonfinancial liabilities.





In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), The Fair Value Option for Financial
Assets and Financial Liabilities which permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value.  SFAS 159 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007.  The Company is currently evaluating the impact of
adopting SFAS 159 on its consolidated financial statements.





The FASB
issued SFAS No. 141 (revised 2007), Business Combinations(FAS
141(R)) and No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51 (FAS
160).  FAS 141(R) and FAS 160 are effective for both public and
private companies for fiscal years beginning on or after December 15, 2008
(January 1, 2009 for companies with calendar year-ends).  FAS 141(R)
will be applied prospectively.  FAS 160 requires retroactive adoption
of the presentation and disclosure requirements for existing minority
interests.  All other requirements of FAS 160 shall be applied
prospectively.  Early adoption is prohibited for both
standards.  The adoption of FAS 160 is not expected to have any impact
on the Company's financial statements.





In March
2008, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No.
161, “Disclosures about Derivative Instruments and Hedging Activities - an
amendment of FASB No. 133,” which requires enhanced disclosures about an
entity’s derivative and hedging activities and thereby improves the transparency
of financial reporting.  SFAS No. 161 is effective for fiscal years
and interim periods beginning after November 15, 2008, with early application
encouraged.  This statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
adoption of SFAS 161 will not have a material impact on the Company’s financial
statements.





In April
2008, FASB Staff Position No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3) was issued.  This standard amends
the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under FASB Statement No. 142, Goodwill and Other Intangible
Assets.  FASP 142-3 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years.  Early adoption is prohibited.  Adoption of
this standard is not expected to have any impact on the financial
statements.


-7-





CERTAIN
RISK FACTORS AFFECTING AZZURRA HOLDING CORPORATION




An
investment in our common stock is subject to many risks. You should carefully
consider the risks described below, together with all of the other information
included in this Annual Report, including the financial statements and the
related notes, before you decide whether to invest in our common stock. Our
business, operating results and financial condition could be harmed by any of
the following risks. The trading price of our common stock could decline due to
any of these risks, and you could lose all or part of your
investment.





THE
COMPANY LACKS OPERATIONS AND HAS LOSSES WHICH ARE EXPECTED TO CONTINUE INTO THE
FUTURE.





As a
result of the sale of substantially all of the Company’s operating assets, the
Company has no operations from which to derive revenue.  The Company’s
operating history is not a useful measure upon which an evaluation of its future
success or failure can be made.  The Company’s ability to achieve and
maintain profitability and positive cash flow is dependent upon its ability to
generate revenues, and the ability to raise the capital necessary to acquire an
operating entity or engage in a merger or other transaction with an operating
entity.





The
Company is a “shell” corporation as that is defined under Rule 12b-2.
 Based upon current plans, the Company expects to incur operating losses in
future periods.  The Company cannot guarantee that it will be successful in
generating revenues in the future.





IF
THE COMPANY DOES NOT SUCCESSFULLY CONSUMMATE A BUSINESS COMBINATION, THE COMPANY
WILL REQUIRE ADDITIONAL FUNDS





For the
Company to once again engage in operations, it will either need to raise
additional funds through public or private debt or sale of equity, or it will
need to acquire or enter into a merger transaction with an operating entity.
 The Company is currently seeking to engage in such a merger with an
operating entity, but there is no guarantee that this merger will reach a
successful completion.   If the merger fails and the Company seeks
additional financing, this financing may not be available when needed.
 Even if this financing is available, it may be on terms that the Company
deems unacceptable or are materially adverse to its interests with respect to
dilution of book value, dividend preference, liquidation preference, or other
terms.





THE
COMPANY IS NOT AN OPERATING COMPANY AND DOES NOT HAVE ANY SIGNIFICANT
CAPITAL.





Because
the Company does not have significant capital, it must limit its operations and
there is little chance that operations will begin any time soon, as a result of
such limited capital, unless the Company obtains additional funding to acquire
an operating entity or enters into a merger transaction with an operating
entity.





BECAUSE
SDS CAPITAL SPC, LTD. GROUP OWNS MORE THAN 50% OF THE COMPANY’S OUTSTANDING
COMMON SHARES AND WILL BE ABLE TO DECIDE WHO WILL BE OUR DIRECTORS, YOU MAY NOT
BE ABLE TO ELECT ANY DIRECTORS.





SDS
Capital Group SPC, Ltd. (“SDS”) owns 80,000 common shares, constituting 80% of
the Company’s outstanding common stock, and controls the Company.  As a
result, unless the Company issues more shares to persons other than SDS or SDS
sells a sufficient number of its shares whereby its ownership falls below 50%,
SDS will be able to elect all of the Company’s directors and control its
operations.  If the Company does enter into an acquisition or merger
transaction, the Company may issue a significant number of shares in connection
with that transaction.  This could result in a reduction in value to
the common stock you own because of the ineffective voting power. SDS’ majority
ownership could adversely affect the value of your shares and prevent the
Company from undergoing a change of control in the future.





THE
COMPANY HAS NOT PAID DIVIDENDS AND NONE ARE ANTICIPATED.





To date,
the Company has paid no cash dividends on its common stock.  For the
foreseeable future, the Company does not expect to pay dividends.


-8-





"PENNY
STOCK" RULES MAY MAKE BUYING OR SELLING THE COMPANY’S COMMON STOCK
DIFFICULT.





Trading
in the Company’s securities is subject to the “Penny Stock” Rules.





The SEC
has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
our securities to persons other than prior customers and accredited investors,
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser’s written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with trading
in the penny stock market. In addition, broker-dealers must disclose commissions
payable to both the broker- dealer and the registered representative and current
quotations for the securities they offer. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit the market price and
liquidity of our securities. Broker-dealers who sell penny stocks to certain
types of investors are required to comply with the Commission’s regulations
concerning the transfer of penny stock. These regulations require broker-dealers
to:




-      Make a suitability determination prior
to selling a penny stock to the purchaser;





-      Receive the purchaser’s written consent
to the transaction; and





-      Provide certain written disclosures to
the purchaser.





These
requirements may restrict the ability of broker-dealers to sell the Company’s
common stock and may affect your ability to resell our common
stock.





ITEM
      7.
            FINANCIAL
      STATEMENTS


The
information required hereunder in this Annual Report on Form 10-KSB is set forth
in the financial statements and the notes thereto beginning on Page
F-1.




ITEM
      8.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES





On July
14, 2008, Aidman, Piser & Company, P.A. (“Aidman Piser”) resigned as the
Company’s independent registered public accounting firm.  Aidman Piser
recently entered into an agreement with Cherry, Bekaert & Holland, L.L.P.
(“Cherry Bekaert”), pursuant to which Aidman Piser merged its operations into
Cherry Bekaert and certain of the professional staff and shareholders of Aidman
Piser joined Cherry Bekaert either as employees or partners of Cherry Bekaert
and will continue to practice as members of Cherry Bekaert as its independent
registered public accounting firm.





Prior to
engaging Cherry Bekaert, the Company did not consult with Cherry Bekaert
regarding the application of accounting principles to a specific completed or
contemplated transaction or regarding the type of audit opinions that might be
rendered by Cherry Bekaert on the Company’s financial statements, and Cherry
Bekaert did not provide any written or oral advice that was an important factor
considered by the Company in reaching a decision as to any such accounting,
auditing or financial reporting issue.  The reports of Aidman Piser
regarding the Company’s financial statements for the fiscal years ended December
31, 2006 and 2005 did not contain any adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that substantial doubt was raised as to the Company’s ability
to continue as a going concern.  During the years ended December 31,
2006 and 2005, and during the period from December 31, 2006 through July 14,
2008, the date of resignation, there were no disagreements with Aidman Piser on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Aidman Piser would have caused it to make references to such
disagreement in its reports.





ITEM
      8A
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures






Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934, as amended. The Company's internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles in the United States of America. The Company's management assessed
the effectiveness of our internal control over financial reporting as of July 3,
2008. In making the assessment, our management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in
Internal Control-Integrated
Framework. Based upon this assessment, management identified the
following material weakness in the Company's internal control over financial
reporting.


-9-






A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company's annual or quarterly financial
statements will not be prevented or detected on a timely basis.






We had a
material weakness in our entity level control environment in that we did not
file financial statements subsequent to the quarter ended September 30, 2006
within the time periods specified by the rules and regulations of the Securities
and Exchange Commission (“Commission”). The principal factor that contributed to
our inability to timely file the required financial statements was the
termination of a substantial portion of our accounting staff, including our
Chief Financial Officer, following the filing of the Bankruptcy Petition on
October 31, 2006.  As a result, the Company lacked a sufficient
complement of personnel to prepare and file required financial statements on a
timely basis. In addition, we changed our accounting software systems, which
further delayed the preparation of our financial statements.  Each of
these factors contributed to the material weakness in our entity level control
environment.






Shortly
after the filing of this Form 10-KSB, the Company plans to file its
quarterly financial statements on Form 10-Q for the quarters ending March
31, 2008 and June 30, 2008.   At this point in time, going
forward management does not believe there will be any barriers preventing it
from filing future financial statements on a timely basis.






All
internal control systems have inherent limitations, including the possibility of
circumvention and overriding the control. Accordingly, even effective internal
control can provide only reasonable assurance as to the reliability of financial
statement preparation and presentation. Further, because of changes in
conditions, the effectiveness of internal control may vary over
time.






Changes in Internal Control Over
Financial Reporting






As
discussed above, as a result of the filing of the Bankruptcy Petition on October
31, 2006, we terminated the employment of a substantial portion of our
accounting staff, including our Chief Financial Officer, and changed our
accounting software systems.  Each of these factors resulted in a
substantial change in our internal controls over our financial reporting, and
resulted in a material weakness in our entity level control
environment.






Our
management has discussed the material weakness described above with our Audit
Committee. In an effort to remediate the identified material weakness, we have
initiated and/or undertaken the following actions:






Timely
Filing of Interim Financial Statements




Current
management, supplemented with qualified external resources, are in the process
of summarizing and reporting the quarterly financial statements for the periods
ended March 31, 2008 and June 30, 2008. At the conclusion of this filing, the
Company will have filed all annual and quarterly financial statements that were
not filed within the time periods specified in the Commission's rules and
regulations.




Management
has retained, and will continue to retain, additional personnel with technical
knowledge, experience, and training in the application of generally accepted
accounting principles commensurate with our financial reporting and
U.S. GAAP requirements.




Where
necessary, we will supplement personnel with qualified external
advisors.




ITEM 8B.
            OTHER
      INFORMATION




None.


-10-





PART
III





ITEM
      9.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT




Directors
and Executive Officers





The
following table sets forth information concerning our executive officers and
directors as of June 30, 2008:





Name
            Age
            PositionDaniel
      W. Rumsey
            48
            President,
      Chief Executive Officer, Chief Financial Officer and Chairman of the
      Board of DirectorsMark
      Schaftlein
            47
            DirectorRichard
      Reiss
            52
            Director





Daniel W.
Rumsey.   Mr. Rumsey was appointed Chief Restructuring
Officer on March 10, 2005, and to the Board of Directors on May 13, 2005. Mr.
Rumsey resigned from his position as Chief Restructuring Officer on April 1,
2006 in connection with the WaveRider Merger, and was reappointed as Chief
Restructuring Officer in October 2006 upon the filing of the Bankruptcy
Petition.  Mr. Rumsey is currently serving as a consultant to the
Company in the capacity of President, Chief Executive Officer and Chief
Financial Officer.  Prior to his appointment as Chief Restructuring
Officer in March 2005, he served as the Company’s Vice President, Chief
Financial Officer and General Counsel. Prior to joining the Company, Mr. Rumsey
was Vice President and General Counsel of Knowledge Kids Network, Inc., a
multi-media education company. Knowledge Kids Network is part of the Knowledge
Universe family of companies. Prior to joining Knowledge Kids Network, Mr.
Rumsey was the President and General Counsel of Aspen Learning Systems and
NextSchool, Inc., which he joined in February 1997. Mr. Rumsey sold Aspen
Learning Systems and NextSchool to Knowledge Kids Network in 1999. Mr. Rumsey
has an extensive restructuring, legal and finance background, dating back to
1987 when he served as a staff attorney in the U.S. Securities and Exchange
Commission's Division of Corporation Finance. He has also served as Assistant
General Counsel for Terra Industries, Inc. and Associate General Counsel and
Corporate Secretary of EchoStar Communications Corporation. Mr. Rumsey also
serves as the Interim Chief Financial Officer, and Executive Chairman of the
Board of Directors of Prescient Applied Intelligence, Inc. and as a director of
World Racing Group, Inc. and XELR8 Holdings, Inc.  Mr. Rumsey received
his J.D. from the University of Denver College of Law in 1985, and his B.S. from
the University of Denver in 1983.




Richard Reiss.Mr. Reiss has
served as director of the Company since March 2005. Mr. Reiss is currently a
director of Glowpoint, Inc., where he has served since May 2000. He served as
the Chief Executive Officer of Glowpoint from May 2000 to April 2002, and as
President from May 2000 to April 2002. Mr. Reiss served as Chairman of the Board
of Directors, President and Chief Executive Officer of All Communications
Corporation from its formation in 1991 until the formation of Glowpoint's
predecessor pursuant to a merger of All Communications Corporation and View
Tech, Inc. in May 2000.





Mark
Schaftlein.Mr. Schaftlein has served as a director of Azzurra
Holding Corporation since June 28, 2007.  Mr. Schaftlein is currently
Chief Executive Officer of Epicus Communications Group, Inc., and is President
of GlobalNet Corporation and Pacificap Entertainment Holdings,
Inc.  Mr. Schaftlein is also a consultant with Ocean Avenue Advisors,
focusing on corporate finance, restructuring and management
consulting.  At Ocean Avenue Advisors, he concentrates on small and
microcap companies with an emphasis on telecommunications, technology and
finance.  Mr. Schaftlein is a member of the Board of Directors of
GlobalNet Corporation, Pacificap Entertainment Holdings, Inc. and Epicus
Communications Group, Inc.





BOARD
COMMITTEES AND MEETINGS





The Board
of Directors currently has an Audit Committee and a Compensation
Committee.





Audit Committee. The Audit
Committee currently consists of two directors, Messrs. Reiss and Schaftlein. The
Audit Committee is primarily responsible for approving the services performed by
the Company’s independent registered public accounting firm and reviewing their
reports regarding the Company’s accounting practices and systems of internal
accounting controls. The Board of Directors has determined that Mr. Reiss is a
financial expert in that Mr. Reiss has (i) an understanding of generally
accepted accounting principles and financial statements; (ii) has the ability to
assess the general application of such principles in connection with the
accounting for estimates, accruals and reserves; (iii) has experience preparing,
auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be
raised by the Company’s financial statements, or experience actively supervising
one or more persons engaged in such activities; and (iv) an understanding of
internal control over financial reporting; and an understanding of audit
committee functions.




Compensation Committee. The
Compensation Committee currently consists two directors, Messrs. Schaftlein and
Reiss. The Compensation Committee is primarily responsible for reviewing and
approving the Company’s general compensation policies and setting compensation
levels for its executive officers.


-11-


CODE
OF ETHICS





The
Company has adopted a Code of Ethics that applies to the Company’s Chief
Executive Officer, Chief Financial Officer, Controller, Treasurer, and Financial
Reporting Officer, or persons performing similar functions. A copy of the
Company’s Code of Ethics is filed as Exhibit 14.1 hereto. The Company will
provide to the public, free of charge, a copy of the code of ethics upon request
in writing to the Company’s Chief Executive Officer at Azzurra Holding
Corporation at 6080 Centre Drive, Suite 600, Los Angeles,
California 90292.





SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE





Section
16(a) of the Exchange Act requires the Company’s directors and executive
officers, and persons who beneficially own more than 10% of the Common Stock, to
file with the SEC initial reports of beneficial ownership ("Form 3") and reports
of changes in beneficial ownership of Common Stock and other equity securities
of the Company ("Form 4"). Officers, directors and greater than 10% stockholders
of the Company are required by SEC rules to furnish to the Company copies of all
Section 16(a) reports that they file. To the Company’s knowledge, based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with for fiscal 2007.




ITEM 10.
            EXECUTIVE
      COMPENSATION




SUMMARY
COMPENSATION TABLE





The
following table sets forth certain information about the compensation paid or
accrued during the fiscal year converted by this Annual Report to our Chief
Executive Officer and our Chief Financial Officer, along with our former Chief
Executive Officers, and Chief Financial Officer.


Name
      and Principal Position
            
            Year
            Salary
              ($)
            Bonus
              ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Daniel
      W. Rumsey(1)
              Chief
      Executive Officer and Chief Financial Officer
            
            2007
              
              2006
            110,638
              
              191,442
            20,000
              
              -
            45,000(2)
              
              15,000(2)
            175,638
              
              206,442James
      Chinnick(3)
      (7)
              Former
      President and Interim Chief Executive Officer and
              Vice
      President, Product Operations
            
            2007
              
              2006
            -
              
              26,647
            -
              
              -
            35,642(3)
              
              2,993(4)
            35,642
              
              129,640Charles
      Brown(5)
      (7)
              Former
      Chief Executive Officer
            
            2007
              
              2006
            -
              
              73,260
            -
              
              -
            -
              
              -
            -
              
              73,260Scott
      Worthington(6)
      (7)
              Former
      Chief Financial Officer
            
            2007
              
              2006
            -
              
              124,948
            -
              
              -
            41,121(6)
              
              -
            41,121
              
              124,948


(1)                 Mr. Rumsey’s employment was terminated
on April 1, 2006 as a result of the WaveRider Merger; however, Mr. Rumsey
continued to receive severance payments under his employment agreement until
September 2007.  As a result of the termination of Mr. Chinnick’s
employment with the Company on October 20, 2006, Mr. Rumsey assumed the position
of Chief Restructuring Officer.  Mr. Rumsey is currently a consultant
to the Company, serving in the capacity as President and Chief Executive
Officer, and Chief Financial Officer.





(2)                 From November 2006 to December 31,
2006, WaveRider paid Mr. Rumsey $7,500 per month for administrative services
relating to the liquidation of WaveRider, and paid Mr. Rumsey $45,000 for his
services to WaveRider during 2007.





(3)                 Mr. Chinnick’s assumed the position of
Vice President, Product Operations of the Company on April 1, 2006 as a result
of the WaveRider Merger, and the position as President and Interim Chief
Executive Officer on August 2, 2006 as a result of Mr. Brown’s resignation as
Chief Executive Officer.  Mr. Chinnick’s employment was terminated on
October 20, 2006.  Mr. Chinnick was paid $35,642 in settlement of
amounts due Mr. Chinnick by WaveRider under Mr. Chinnick’s Employment Agreement
with WaveRider.





(4)                 Represents consulting fees provided to
the Company and WaveRider by Mr. Chinnick following his termination on October
20, 2006.





(5)                 Mr. Brown assumed the position of Chief
Executive Officer and a director of the Company on April 1, 2006 as a result of
the WaveRider Merger.  Mr. Brown resigned from the Company as Chief
Executive Officer and as a director effective July 28, 2006.





(6)                 Mr. Worthington assumed the position of
Chief Financial Officer on April 1, 2006 as a result of the WaveRider
Merger.  Mr. Worthington’s employment was terminated on October 31,
2006.  Following his termination, Mr. Worthington was paid $8,796 for
consulting services to the Corporation, and $32,325 in settlement for amounts
due Mr.Worthingtonby WaveRider under Mr. Worthington’s
Employment Agreement.





(7)                 Amounts paid to Messrs. Brown, Chinnick
andWorthingtonreflect only amounts paid to such
persons after consummation of the WaveRider Merger on April 1,
2007.


-12-





DIRECTOR
COMPENSATION





During
2007 and 2006, Richard Reiss was paid $16,500 and $4,500, respectively, in
consideration for his service to the Board of Directors.  No other
director received any consideration for service to the Board during 2007 or
2006, due to the deteriorating financial condition of the Company.  In
is not intended that non-employee directors will receive cash compensation
for their service as directors in the immediate future.





EMPLOYMENT
CONTRACTS, TERMINATION OF EMPLOYMENT ARRANGEMENTS AND CHANGE OF CONTROL
AGREEMENTS





The
Company entered into a letter agreement with Daniel Rumsey, its then Chief
Restructuring Officer, and former Vice President, General Counsel and Acting
Chief Financial Officer, on March 22, 2006. Under the terms of the agreement,
Mr. Rumsey’s severance agreement with the Company, as amended, terminated. The
letter agreement provided for Mr. Rumsey’s resignation as the Chief
Restructuring Officer upon consummation of the WaveRider Merger, and the
termination of his employment on March 31, 2006. On that date, Mr. Rumsey was
paid one-half of his deferred compensation owed him by the Company, or $25,000,
and the remaining $25,000 was paid during the quarter ended June 30,
2006.  In addition, the Company was obligated to pay Mr. Rumsey (i)
one-half of his base salary for a period of twelve months; (ii) his COBRA
obligations for twelve months; and (iii) all stock options and restricted stock
to which Mr. Rumsey is entitled vested 100%.  As a result of the
Company’s deteriorating financial condition, however, the Company terminated his
severance payments effective September 1, 2006.  As a result of the
filing of the Bankruptcy Petition, the letter agreement terminated, therefore
terminating all obligations to Mr. Rumsey thereunder, subject to the treatment
of Mr. Rumsey’s claim under the Joint Plan.





ITEM
      11.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




Under the
terms and conditions of the Joint Plan, as confirmed by the Court, holders of
our equity interests, including common stock and preferred stock, as of the
effective date of the Joint Plan, June 28, 2007, have terminated.  The
following table presents information concerning the beneficial ownership of all
shares of common stock of the Company issued in connection with the Joint Plan,
as of December 31, 2007.  The Company has no other shareholders at
December 31, 2007.





Beneficial
ownership is determined under the rules of the Securities and Exchange
Commission and generally includes voting or investment power over securities.
Except in cases where community property laws apply or as indicated in the
footnotes to this table, the Company believes that each stockholder identified
in the table possesses sole voting and investment power over all shares of
common stock shown as being beneficially owned by that stockholder. The
percentage of beneficial ownership is based on 100,000 shares of common stock
outstanding as of December 31, 2007.





Name
      and Address of Beneficial Owner
            Common
              Stock
            Percentage
      of
              Shares
      OutstandingSDS
      Capital Group SPC, Ltd.
              113
      Church Street
              P.O.
      Box 134GT
              Grand
      Canyon, Cayman Islands
            80,000
            80%CGA
      Resources LLC
              c/o
      Cass G. Adelman
              30
      E. 72nd Street,
      5th
      Floor
              New
      York, NY 10021
            10,000
            10%Smithfield
      Fiduciary LLC
              c/o
      Highbridge Capital Management
              1350
      Avenue of the Americas
              33rd Floor
              New
      York, NY 10019
            10,000
            10%





-13-




ITEM
      12.
            CERTAIN
      RELATIONSHIPS AND RELATED
TRANSACTIONS




None.





ITEM
      13.
            EXHIBITS
      AND REPORTS ON FORM 8-K




We have
listed the exhibits filed as part of this Annual Report on Form 10-KSB in the
accompanying exhibit index, which follows the signature page to this Annual
Report. The exhibits marked with an asterisk (*) are included with and filed as
part of this Annual Report on Form 10-KSB.




ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




AUDIT
FEES





Aidman,
Piser & Company, P.A. ("Aidman Piser") was retained by the Audit
Committee as the independent registered certified public accounting firm to
audit our financial statements for the fiscal year ending December 31, 2007.
Subsequently, Aidman, Piser's accounting practice was acquired by and merged
into Cherry, Bekaert & Holland, L.L.P. ("CB&H") and the Audit Committee
engaged CB&H to complete the audit of our 2007 financial
statements.  The aggregate fees CB&H and Aidman Piser billed for
2007 for audit services, including for review of our interim financial
statements, post-report review procedures with the filing of registration
statements, was approximately $40,000.





NON
AUDIT RELATED FEES





The
Company did not engage CB&H or Aidman Piser for any non-audit related
services in 2007, including tax compliance, tax advisory or any other tax
planning or other services.





AUDIT
COMMITTEE PRE-APPROVAL POLICIES





The Audit
Committee has adopted an Audit Committee Charter, which sets forth the
procedures and policies pursuant to which services to be performed by the
independent auditor are to be pre-approved. Under the Charter, proposed services
either may be pre-approved by agreeing to a framework with descriptions of
allowable services with the Audit Committee ("general pre-approval"), or require
the specific pre-approval of the Audit Committee. Unless a type of service has
received general pre-approval, it requires specific pre-approval by the Audit
Committee if it is to be provided by the independent registered certified public
accounting firm.





The Audit Committee will annually
review and pre-approve the services that may be provided by the independent
auditor that are subject to general pre-approval. Under the Charter, the Audit
Committee may delegate pre-approval authority one or more designated members of
the Audit Committee the authority to pre-approve audit and permissible non-audit
services, provided such pre-approval decision is presented to the full Audit
Committee at its scheduled meetings. The member to whom such authority is
delegated must report, for informational purposes only, any pre-approval
decisions to the Audit Committee at its next
meeting.








-14-





REPORT
OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM




The Board
of Directors


Azzurra
Holding Corporation and Subsidiaries





We have
audited the accompanying consolidated balance sheet of Azzurra Holding
Corporation and subsidiaries (the “Company”) as of December 31, 2007 and the
related consolidated statements of operations, stockholders' equity (deficit),
and cash flows for each of the years in the two-year period then ended. These
consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated
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. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Azzurra Holding
Corporation and subsidiaries as of December 31, 2007 and the consolidated
results of their operations and their cash flows for each of the years in the
two-year period then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As more fully discussed in Note 1,
the Company reorganized under Chapter 11 of the U.S. Bankruptcy Code under a
plan of reorganization that was confirmed by the Bankruptcy Court on June 28,
2007.  Additionally, as discussed in Note 5, during 2007 the Company
discontinued all of its remaining operations.  The discontinuance of
all the Company's remaining operations in 2007 raises substantial
doubt about the Company’s ability to continue as a going
concern.  Management's plans in regard to these matters are described
in Note 2 "Going Concern".  The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


















/s/ 
      Cherry, Bekaert &
      Holland, L.L.P..Tampa,
      Florida
              August
      11, 2008





-15-


PART I - FINANCIAL INFORMATION





ITEM
1.                      FINANCIAL
STATEMENTS





AZZURRA
HOLDING CORPORATION AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET


(In
thousands, except per share data)





SUCCESSORDecember
      31
              2007ASSETSCurrent
      assets:Cash
            
            $
            139Accounts
    receivable
            
            
            9Total current
    assets
            
            
            148Total assets
            
            $
            148LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts payable
            
            
            56Other accrued
      liabilities
            
            
            22Total current liabilities and
      total liabilities
            
            
            78Commitments
      and contingencies (Note 1)
            
            
            -Stockholders'
      equity:Common
      stock, par value $0.01 per share; 250,000 shares authorized; 100,000
      shares issued and outstanding
            
            
            1Additional
      paid-in capital
            
            
            440Accumulated
      deficit
            
            
            (371
            )Total stockholders'
      equity
            
            
            70Total
      liabilities and stockholders' equity
            
            $
            148





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


-16-


AZZURRA
HOLDING CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(In
thousands, except per share data)







SUCCESSOR
            
            
            PREDECESSORSix
      Months
              Ended
              December
      31,
              2007
            
            
            Six
      Months
              Ended
              June
      30,
              2007
      (1)
            
            
            Year
              Ended
              December
      31,
              2006Sales
            
            $
            -
            
            
            $
            -
            
            
            
            -Cost
      of sales
            
            
            -
            
            
            
            -
            
            
            
            -Gross
      profit (loss)
            
            
            -
            
            
            
            -
            
            
            
            -OPERATING
      EXPENSES:Research
      and development
            
            
            -
            
            
            
            -
            
            
            
            1,059Selling
      and marketing
            
            
            -
            
            
            
            -
            
            
            
            1,055General
      and administrative
            
            
            272
            
            
            
            601
            
            
            
            526Impairment
      and other charges
            
            
            -
            
            
            
            -
            
            
            
            24,647Total
      operating expenses
            
            
            272
            
            
            
            601
            
            
            
            27,287LOSS
      FROM OPERATIONS:
            
            
            (272
            )
            
            
            (601
            )
            
            
            (27,287
            )OTHER
      INCOME (EXPENSE):Interest
      expense
            
            
            -
            
            
            
            (738
            )
            
            
            (675
            )Gain
      on settlement of accrued liabilities
            
            
            -
            
            
            
            602
            
            
            
            -Financing
      expense
            
            
            -
            
            
            
            -
            
            
            
            (10,325
            )Derivative
      financial instrument income
            
            
            -
            
            
            
            -
            
            
            
            5,140Other
      income (loss), net
            
            
            39
            
            
            
            147
            
            
            
            (58
            )LOSS
      FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS
            
            
            (233
            )
            
            
            (590
            )
            
            
            (33,205
            )Bankruptcy
      expenses
            
            
            (116
            )
            
            
            (255
            )
            
            
            -Gain
      on settlement of liabilities subject to compromise and
      recapitalization
            
            
            -
            
            
            
            6,207
            
            
            
            -Gain
      from fresh start accounting adjustments
            
            
            -
            
            
            
            243
            
            
            
            -INCOME
      (LOSS) FROM CONTINUING OPERATIONS
            
            
            (349
            )
            
            
            5,605
            
            
            
            (33,205
            )Gain
      (loss) from discontinued operations
            
            
            (22
            )
            
            
            691
            
            
            
            380Net
      loss
            
            
            (371
            )
            
            
            6,296
            
            
            
            (32,825
            )Preferred
      stock accretions
            
            
            -
            
            
            
            -
            
            
            
            (1,199
            )Net
      income (loss) attributable to common stockholders
            
            $
            (371
            )
            
            $
            6,296
            
            
            $
            (34,024
            )Basic
      and diluted income (loss) per common share:Income
      (loss) from continuing operations
            
            $
            (3.49
            )
            
            $
            0.08
            
            
            $
            (0.53
            )Income
      (loss) from discontinued operations
            
            $
            (0.22
            )
            
            $
            0.00
            
            
            $
            (0.01
            )Basic
      and diluted loss per common share
            
            $
            (3.71
            )
            
            $
            0.08
            
            
            $
            (0.55
            )Shares
      used in basic and diluted per share computation(1)
            
            
            100
            
            
            
            75,111
            
            
            
            62,224




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





(1)
            On
      June 28, 2007, the Joint Plan (see Note 1) was declared
      effective.  The Company is reporting the periods ended June 30,
      2007, as the Predecessor Company.  The Company determined that
      the days following June 28, 2007 were non-business days, and accordingly,
      results of operations through June 28, 2007 are identical to those through
      June 30, 2007.


-17-


AZZURRA
HOLDING CORPORATION AND SUBSIDIARIES


STATEMENTS
STOCKHOLDERS' EQUITY (DEFICIT)


YEARS
ENDED DECEMBER 31, 2006 AND 2007


(In
thousands, except per share data)





Preferred
      Stock
              (Note
      6)
            
            
            Common
      Shares
            
            
            Common
      Stock
            
            
            Additional
      Paid-in Capital
            
            
            Treasury
      Stock
            
            
            Accumulated
      Deficit
            
            
            TotalBalance
      at January 1, 2006
            
            $
            4,337
            
            
            
            22,162
            
            
            $
            2
            
            
            $
            383,778
            
            
            $
            (74
            )
            
            $
            (383,835
            )
            
            $
            4,208Preferred
      stock converted to common stock
            
            
            (781
            )
            
            
            4,347
            
            
            
            1
            
            
            
            780
            
            
            
            -
            
            
            
            -
            
            
            
            -Acquisition
      of WaveRider
            
            
            5,663
            
            
            
            48,362
            
            
            
            5
            
            
            
            8,282
            
            
            
            -
            
            
            
            -
            
            
            
            13,950Preferred
      stock issued in exchange for notes
            
            
            8,086
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            8,086Warrants
      issued in connection with notes exchanged  for preferred
      stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,426
            
            
            
            -
            
            
            
            -
            
            
            
            2,426Preferred
      stock issued to consultants
            
            
            568
            
            
            
            -
            
            
            
            -
            
            
            
            167
            
            
            
            -
            
            
            
            -
            
            
            
            735Sale
      of preferred stock
            
            
            1,308
            
            
            
            -
            
            
            
            -
            
            
            
            917
            
            
            
            -
            
            
            
            -
            
            
            
            2,225Accretion
      of constructive dividend in connection with the sale of preferred
      stock
            
            
            1,199
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            (1,199
            )
            
            
            -Warrants
      and beneficial conversion feature of convertible notes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            479
            
            
            
            -
            
            
            
            -
            
            
            
            479Common
      stock issued to consultants
            
            
            -
            
            
            
            240
            
            
            
            -
            
            
            
            1
            
            
            
            -
            
            
            
            -
            
            
            
            1Derivative
      liability reclassification
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (5,170
            )
            
            
            -
            
            
            
            -
            
            
            
            (5,170
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (32,825
            )
            
            
            (32,825
            )Balance
      at December 31, 2006
            
            
            20,380
            
            
            
            75,111
            
            
            
            8
            
            
            
            391,660
            
            
            
            (74
            )
            
            
            (417,859
            )
            
            
            (5,885
            )Net
      income (Predecessor)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            6,296
            
            
            
            6,296Reorganization
      pursuant to Joint Plan (Note 2)
            
            
            (20,380
            )
            
            
            (75,111
            )
            
            
            (8
            )
            
            
            (391,249
            )
            
            
            74
            
            
            
            411,563
            
            
            
            -Issuance
      of new common stock
            
            
            -
            
            
            
            100
            
            
            
            1
            
            
            
            29
            
            
            
            -
            
            
            
            -
            
            
            
            30Balance
      at June 30, 2007 (1)
            
            
            -
            
            
            
            100
            
            
            
            1
            
            
            
            440
            
            
            
            -
            
            
            
            -
            
            
            
            441Net
      loss (Successor)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (371
            )
            
            
            (371
            )Balance
      at December 31, 2007
            
            $
            -
            
            
            
            100
            
            
            $
            1
            
            
            $
            440
            
            
            $
            -
            
            
            $
            (371
            )
            
            $
            70





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





(1)
            On
      June 28, 2007, the Joint Plan (see Note 1) was declared
      effective.  The Company is reporting the periods ended June 30,
      2007, as the Predecessor Company.  The Company determined that
      the days following June 28, 2007 were non-business days, and accordingly,
      stockholders' equity at June 28 is identical to that at June 30,
      2007.


-18-


AZZURRA
HOLDING CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(In
thousands, except per share data)





SUCCESSOR
            
            
            PREDECESSORJuly
      1, 2007
              to
      December 31, 2007
            
            
            January
      1, 2007
              to
      June 30, 2007(1)
            
            
            Year
      Ended
              December
      31, 2006Cash
      flows from operating activities:Net
      income (loss)
            
            $
            (371
            )
            
            $
            6,296
            
            
            $
            (32,825
            )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Depreciation
            
            
            -
            
            
            
            -
            
            
            
            85Depreciation
      in discontinued operations
            
            
            -
            
            
            
            -
            
            
            
            108(Gain)
      loss on sale of equipment
            
            
            -
            
            
            
            (13
            )
            
            
            366Non-cash
      impairment charges
            
            
            -
            
            
            
            -
            
            
            
            24,647Gain
      on settlement of accrued liabilities
            
            
            -
            
            
            
            (602
            )
            
            
            -Gain
      on settlement of liabilities subject to compromise and
      recapitalization
            
            
            -
            
            
            
            (6,207
            )
            
            
            -Gain
      from fresh start accounting adjustments
            
            
            -
            
            
            
            (243
            )
            
            
            -Gain
      on debt extinguishments
            
            
            -
            
            
            
            -
            
            
            
            (26
            )(Gain)
      loss on disposal of discontinued operations
            
            
            22
            
            
            
            (438
            )
            
            
            (1,008
            )Loss
      on conversion of promissory notes
            
            
            -
            
            
            
            -
            
            
            
            7,643Derivative
      financial instrument income
            
            
            -
            
            
            
            -
            
            
            
            (5,140
            )Amortization
      of discounts on promissory notes
            
            
            -
            
            
            
            -
            
            
            
            1,017Preferred
      stock and warrants issued to consultants
            
            
            -
            
            
            
            -
            
            
            
            735Gain
      on sale of patent
            
            
            -
            
            
            
            -
            
            
            
            (30
            )Bad
      debt expense
            
            
            -
            
            
            
            -
            
            
            
            1,031Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            26
            
            
            
            364
            
            
            
            (719
            )Inventory
            
            
            -
            
            
            
            4
            
            
            
            75Prepaid
      expenses and other assets
            
            
            -
            
            
            
            -
            
            
            
            423Accounts
      payable
            
            
            26
            
            
            
            133
            
            
            
            252Other
      accrued liabilities
            
            
            -
            
            
            
            -
            
            
            
            (264
            )Deferred
      revenue
            
            
            -
            
            
            
            -
            
            
            
            465Net
      cash provided by (used in) operating activities
            
            
            (297
            )
            
            
            (706
            )
            
            
            (3,165
            )Cash
      flows from investing activities:Proceeds
      from the sale of property and equipment
            
            
            -
            
            
            
            29
            
            
            
            123Proceeds
      from the sale of discontinued operations
            
            
            70
            
            
            
            864
            
            
            
            2,163Proceeds
      from sale of patents
            
            
            -
            
            
            
            -
            
            
            
            30Net
      cash received on acquisition of WaveRider
            
            
            -
            
            
            
            -
            
            
            
            174Net
      cash provided by investing activities
            
            
            70
            
            
            
            893
            
            
            
            2,490Cash
      flows from financing activities:Proceeds from the sale of
      preferred shares
            
            
            -
            
            
            
            -
            
            
            
            2,225Proceeds from the sale of common
      stock
            
            
            -
            
            
            
            30
            
            
            
            -Proceeds from debt financing,
      net
            
            
            -
            
            
            
            -
            
            
            
            989Payments on bank
      loan
            
            
            -
            
            
            
            -
            
            
            
            (771
            )Payments under note payable
      obligations
            
            
            -
            
            
            
            -
            
            
            
            (299
            )Repayment of debt pursuant to
      the Joint Plan
            
            
            -
            
            
            
            (1,700
            )
            
            
            -Net
      cash provided by (used in) financing activities
            
            
            -
            
            
            
            (1,670
            )
            
            
            2,144Net
      increase (decrease) in cash
            
            
            (227
            )
            
            
            (1,483
            )
            
            
            1,469Cash
      at beginning of the period
            
            
            366
            
            
            
            1,849
            
            
            
            380Cash
      at end of the period
            
            $
            139
            
            
            $
            366
            
            
            $
            1,849





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





(1)
            On
      June 28, 2007, the Joint Plan (see Note 1) was declared
      effective.  The Company is reporting the periods ended June 30,
      2007, as the Predecessor Company.  The Company determined that
      the days following June 28, 2007 were non-business days, and accordingly,
      cash flows through June 28, 2007 are identical to those through June 30,
      2007.




-19-


AZZURRA HOLDING CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


1.
            BACKGROUND
      AND ORGANIZATION





Azzurra
Holding Corporation, formerly known as Wave Wireless Corporation (“Old AHC”),
became Azzurra Holding Corporation (“New AHC”), as a result of the consummation
of the transactions contemplated by the Joint Plan of Reorganization, as amended
(the “Joint Plan”) of Old AHC, pursuant to Chapter 11 of Title 11 of the United
States Code (the “Bankruptcy Code”) on June 28, 2007.  Since the days
following June 28, 2007 through the end of that quarter were non-business days,
the “Effective Date” of June 30, 2007 is used throughout these consolidated
financial statements.  In these notes to the consolidated financial
statements, references to the “Company” in respect to time periods preceding the
Effective Date are references to Old AHC and its consolidated subsidiaries
(collectively, the “Predecessor”), while such references in respect to time
periods commencing with the Effective Date shall refer to New AHC and its
consolidated subsidiaries (collectively, the “Successor”).





Bankruptcy
Proceedings under Chapter 11 of the Bankruptcy Code and
Reorganization





On
October 31, 2006 (“Petition Date”), Old AHC filed a voluntary petition for
reorganization under Chapter 11 of the Code in the United States Bankruptcy
Court for the District of Delaware (“Court”) (the “Bankruptcy Petition”).
 The Company’s significant operating losses, working capital deficit,
defaults on certain outstanding debentures, together with the significant cash
required to maintain operations, delays in commercializing next-generation
products, and the loss of a key executive, precipitated the need to seek
protection under Chapter 11 of the Code.





On April
5, 2007, the Company and the Committee of Unsecured Creditors (“Creditors
Committee”) filed a Joint Plan of Reorganization, which Joint Plan was amended
and restated and filed with the Court on May 2, 2007.  The Joint Plan
was confirmed by the Court on June 14, 2007 and became effective June 28,
2007.  Under the terms and conditions of the Joint Plan, as confirmed
by the Court, holders of our equity interests as of the effective date of the
Joint Plan, have terminated.  The Joint Plan contained the following
additional major provisions:





SDS
Capital Group SPC, Ltd. ("SDS"), the secured creditor, became the owner of 80%
of the issued and outstanding shares of common stock, which includes 70%
received under the terms of the Joint Plan, and an additional 10% as a result of
SDS’s participation in the Equity Financing, described
below.   In addition, all priority unsecured claims and
administrative claims were paid in full, through either: (i) payment on the
effective date of the Joint Plan; (ii) payment through an escrow account
established with a Plan Administration Trust (“Trust”); or (iii) payment from
the reorganized Company following the allowance of a claim. The initial funding
for the Trust was $250,000.00 less certain professional fees and other charges
set forth in more detail in the Joint Plan. The payment to the Trust was
recorded as a reduction of gain on settlement of liabilities subject to
compromise and recapitalization in the accompanying 2007 Predecessor statement
of operations. This initial funding was provided from funds that were otherwise
distributable to SDS. The Trust is responsible for, among other things,
objecting to general unsecured claims and making distributions, as appropriate,
to holders of general unsecured claims. The Company has no future rights to any
Trust assets.  The Joint Plan also permitted general unsecured
claimants and preferred shareholders to participate in an equity financing
("Equity Financing"), pursuant to which each party was permitted to purchase a
portion of 30,000 shares of new common stock at $1.00 per share, based upon the
terms and conditions set forth in the Joint Plan. As a result of the Equity
Financing, three preferred shareholders each acquired 10,000 shares of common
stock.





The Joint
Plan required that the Company issue a Contingent Promissory Note in favor of
the trust (“Contingent Note”). The Contingent Note provides for a further
recovery to the Trust under the terms of the Joint Plan in the event SDS
receives a distribution under the Joint Plan that exceeds $2,476,658, plus all
fees and expenses accrued under the Contingent Note (the “Maximum Amount”).
Under the terms of the Contingent Note, if SDS receives an amount in excess of
the Maximum Amount, the Company will pay to the Trust an amount equal to 50% of
any cash that remains or has accrued after (i) satisfying the Maximum Amount and
all other distributions or dividends required under the Joint Plan, (ii)
reserving cash sufficient to satisfy, in full, all obligations of, and claims
against, the Company that have accrued during the one year period following the
effective date of the Joint Plan, and (iii) reserving reasonably sufficient
cash, in the Company's sole discretion, to fund ongoing business operations. No
amounts became payable under the Contingent Note and the Contingent Note
terminated on June 28, 2008.  On June 28, 2007, SDS received $1.7
million under the terms of the Joint Plan.  No further payments have
been made to SDS, and no payments are currently contemplated.





In
connection with the confirmation of the Joint Plan, the Company and
SDS executed a Secured Promissory Note payable by the Company to SDS in the
amount of $100,000 (the “SDS Note”). The SDS Note is held by the Company and
will only be issued in the event the Company deems it necessary to provide for
its working capital requirements. Any amounts due and payable to SDS would be
secured by all assets of the Company under the terms of a Security
Agreement.  No amounts have been drawn or are outstanding on the SDS
Note at December 31, 2007.





2.
            BASIS
      OF PRESENTATION SIGNIFICANT ACCOUNTING
POLICIES





SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES





Management's
Use of Estimates and Assumptions





The
preparation of financial statements in accordance 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 disclosures 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.





Basis
of Presentation





As
discussed in Notes 1 and 3, the Company filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code and, accordingly, the accompanying
consolidated financial statements of the Predecessor have also been prepared in
accordance with Statement of Position 90-7, Financial Reporting by Entities in
Reorganization under the Bankruptcy Code("SOP 90-7") which requires an
entity to distinguish pre-petition liabilities subject to compromise from
post-petition liabilities on its balance sheet.  In the accompanying
consolidated June 28, 2007 balance sheet presented in Note 3, the caption
"liabilities subject to compromise" reflected the amount of pre-petition claims
that were restructured.  In addition, SOP 90-7 requires that charges
and credits resulting from the reorganization and restructuring of the
organization be reported separately in the statements of operations as
reorganization items, except those required to be reported as discontinued
operations.


-20-


The
Company's emergence from bankruptcy resulted in a new reporting entity with no
retained earnings or accumulated losses as of June 28, 2007 (for presentation
purposes, June 30, 2007).  Accordingly, the Company's consolidated
financial statements for periods prior to June 30, 2007 are not comparable to
financial statements presented subsequent to June 30, 2007.


Going
Concern





The
Company currently has no operations and intends to locate and combine with an
existing, privately-held company that is profitable or which, in management's
view, has growth potential, irrespective of the industry in which it is
engaged.  However, the Company does not intend to combine with a
private company, which may be deemed to be an investment company subject to the
Investment Company Act of 1940. A combination may be structured as a merger,
consolidation, exchange of the Company's common stock for stock or assets or any
other form which will result in the combined enterprise's becoming a
publicly-held corporation.




Pending
negotiation and consummation of a combination the Company anticipates that it
will have, aside from carrying on its search for a combination partner, no
business activities, and, thus, will have no source of revenue.  To
continue as a going concern, pending consummation of a transaction, the Company
intends to either seek additional equity or debt financing.  No
assurances can be given that such equity or debt financing will be available to
the Company nor can there be any assurance that a combination transaction will
be consummated.  Should the Company need to incur any significant
liabilities prior to a combination transaction, including those associated with
the current minimal level of general and administrative expenses, it may not be
able to satisfy those liabilities in the event it was unable to obtain
additional equity or debt financing.




Consolidation





The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries.  All significant inter-company accounts and
transactions have been eliminated.





Foreign
Currency





The value
of the United States dollar rises and falls day-to-day on foreign currency
exchanges. Since the Company conducted business in foreign countries, these
fluctuations affect the Company’s financial position and results of operations.
Assets and liabilities of our foreign subsidiaries were translated from their
local currencies into United States dollars at exchange rates in effect at the
respective balance sheet date. Income and expense accounts were translated
from their local currencies into United States dollars at average exchange rates
for the respective period. At December 31, 2006, the Company no longer had any
active subsidiaries outside the United States.





Fair
Value of Financial Instruments





The
estimated fair values of cash, accounts receivable and payable and other accrued
liabilities at December 31, 2007 approximated their respective historical cost
due to the short-term maturities.





Accounts
Receivable





The
Company records an allowance for doubtful accounts receivable based on our
general collection history and specifically identified amounts that management
believes to be uncollectible. The Company has a limited number of customers with
individually large amounts due at any given balance sheet date. However, any
unanticipated change in one of these customers’ credit worthiness could have a
material adverse effect on the Company’s results of operations in the period in
which such changes or events occur and losses become estimable. After all
attempts to collect a receivable have failed, the receivable is written off
against the allowance.  At December 31, 2007, the Company did not
record an allowance for doubtful accounts, as management determined an
allowance was not necessary.





Revenue
Recognition





Revenue
from product sales (all associated with discontinued operations discussed in
Note 5) is recognized upon transfer of title and risk of loss, which is upon
shipment of the product provided no significant obligations remain and
collection is probable. Shipping and handling costs related to our product sales
are included as a component of cost of sales. The Company has not experienced
material returns of products. The Company warrants its products and provides
parts and labor to repair any manufacturing defects on its equipment for a
period of one year to three years. Provisions for estimated warranty repairs,
returns and other allowances are recorded at the time revenue is
recognized.





Property
and Equipment





Depreciation
(all associated with discontinued operations discussed in Note 5) was computed
using the straight-line method based upon the useful lives of the assets ranging
from three to seven years. Leasehold improvements were amortized using the
straight-line method based upon the shorter of the estimated useful lives of the
respective improvements or the lease term.





Research
and Development





Research
and development costs (all associated with discontinued operations discussed in
Note 5) were expensed as incurred.


-21-


Net
Income (Loss) per Share





Basic and
diluted income (loss) per common share are computed by dividing the net income
(loss) by the weighted average common shares outstanding.  No options
or warrants with an exercise price below market were outstanding for any period.
As such, shares issuable subject to those option and warrant agreements were not
considered in the determination of net income or loss per share because their
effect would have been antidilutive.  All options were cancelled in
2006 and warrants were cancelled upon the effective date of the Joint
Plan.





Discontinued
Operations





As a
result of the sale by of all of the Company’s operating businesses in 2007 and
2006, no continuing operations exist other than on-going continuing general and
administrative expenses.  As such, all operations other than on-going
general and administrative expenses are presented as discontinued operations in
the accompanying statements of operations.





Derivative
Liability Accounting





Derivative
instrument accounting arises when certain financial instruments, such as
warrants to acquire common stock, are classified as liabilities due to either
(a) the holder possesses rights to net-cash settlement or (b) physical or net
share settlement is not within the control of the Company.  In such
instances, net-cash settlement is assumed for financial accounting and
reporting, even when the terms of the underlying contracts do not provide for
net-cash settlement.  Such derivative financial instruments are
initially recorded at fair value with subsequent changes in the fair value
charged or credited to operations each reporting period. With the issuance
of the Company’s Series J and Series J-1 Convertible Preferred Stock in 2006,
the Company determined that the warrants associated therewith should be
accounted for as a derivative liability.





Additionally,
as a result of the issuance of the Company’s series J and series J-1 Convertible
Preferred Stock, the Company did not have enough authorized common stock to
issue if all of the existing preferred shares and other convertible instruments
were converted to common stock.  As a result thereof, the Company
reclassified approximately $5.2 million from additional paid-in capital to
derivative liability.  Fair value for financial instruments was
determined using the closing price of our common stock at the close of each
reporting period.  Reductions in the remaining life of unexercised
warrants and declines in the price of our common stock reduced the fair value of
the preferred stock and warrants resulting in additional credits to our
consolidated statements of operations.





Under the
terms and conditions of the Joint Plan, holders of the Company's common stock
and preferred stock did not receive any distribution and all their rights as
well as any outstanding warrants were terminated.





Recent
Accounting Pronouncements





The
Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainties in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48), on January 1, 2007.  Adoption of FIN 48 did not have any impact
on the Company’s financial statements.  While there were no such items
during the year ended December 31, 2007, the Company’s policy would be to
include any accrued interest or penalties with respect to uncertain tax
positions as a component of income tax expense.  The Company's tax
filings (Federal and California) subject to examination are for the years 2005
through 2007.





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 157 (“FAS 157”), Fair Value
Measurements.  FAS 157 defines fair value, establishes a
framework and gives guidance regarding the methods used for measuring fair
value, and expands disclosures about fair value measurements.  FAS 157
is effective  for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years.  The adoption of FAS 157 is not expected to have any impact on
the Company.  FASB Staff Position (FAS 157-2) Effective Date of FASB Statement No.
157 delays the effective date of FAS 157 for nonfinancial assets and
nonfinancial liabilities.





In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), The Fair Value Option for Financial
Assets and Financial Liabilities which permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value.  SFAS 159 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007.  The Company is currently evaluating the impact of
adopting SFAS 159 on its consolidated financial statements.





The FASB
issued SFAS No. 141 (revised 2007), Business Combinations(FAS
141(R)) and No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51 (FAS
160).  FAS 141(R) and FAS 160 are effective for both public and
private companies for fiscal years beginning on or after December 15, 2008
(January 1, 2009 for companies with calendar year-ends).  FAS 141(R)
will be applied prospectively.  FAS 160 requires retroactive adoption
of the presentation and disclosure requirements for existing minority
interests.  All other requirements of FAS 160 shall be applied
prospectively.  Early adoption is prohibited for both
standards.  The adoption of FAS 160 is not expected to have any effect
on the Company's financial statements.





In March
2008, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No.
161, “Disclosures about Derivative Instruments and Hedging Activities - an
amendment of FASB No. 133,” which requires enhanced disclosures about an
entity’s derivative and hedging activities and thereby improves the transparency
of financial reporting.  SFAS No. 161 is effective for fiscal years
and interim periods beginning after November 15, 2008, with early application
encouraged.  This statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
adoption of SFAS 161 will not have a material impact on the Company’s financial
statements.





In April
2008, FASB Staff Position No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3) was issued.  This standard amends
the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under FASB Statement No. 142, Goodwill and Other Intangible
Assets.  FASP 142-3 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years.  Early adoption is prohibited.  Adoption of
this standard is not expected to have any impact on the financial
statements.


-22-





3.
            FRESH
      START ACCOUNTING





The
Company implemented “fresh start” accounting and reporting in accordance with
SOP 90-7 upon its emergence from bankruptcy on the Effective Date as the result
of the change in voting control which occurred on that date.  Assets
and liabilities existing on the Effective Date were adjusted, as necessary, to
their fair values. The determination of fair values of assets and liabilities is
subject to significant estimation and assumptions.





The
following table reflects the debt and equity restructuring, reorganization
adjustments and the adoption of fresh start accounting to the Company’s
consolidated balance sheet as of the Effective Date (in
thousands).




Predecessor
            
            
            
            
            
            
            
            
            
            
            
            SuccessorJune
      28, 2007
            
            
            Debt
      and Equity Restructuring
            
            
            Reorganization
      Adjustments
            
            
            Fresh
      Start Adjustments
            
            
            June
      28, 2007ASSETSCurrent
      assets:Cash and cash
      equivalents
            
            $
            2,036
            
            
            $
            -
            
            
            $
            (1,670
            )(a)
            
            $
            -
            
            
            $
            366Accounts
    receivable
            
            
            27
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            27Prepaid taxes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Total current
      assets
            
            
            2,063
            
            
            
            -
            
            
            
            (1,670
            )
            
            
            -
            
            
            
            393Goodwill
            
            
            100
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            100Total assets
            
            $
            2,163
            
            
            $
            -
            
            
            $
            (1,670
            )
            
            $
            -
            
            
            $
            493LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities (subject to compromise):Accounts payable
            
            $
            864
            
            
            $
            (834
            )(b)
            
            
            -
            
            
            $
            -
            
            
            $
            30Other accrued
      liabilities
            
            
            2,607
            
            
            
            (2,342
            )(b)
            
            
            -
            
            
            
            (243
            )(e)
            
            
            22Deferred revenue
            
            
            1,322
            
            
            
            (1,322
            )(b)
            
            
            -
            
            
            
            -
            
            
            
            -Derivative liability for excess
      shares
            
            
            30
            
            
            
            (30
            )(b)
            
            
            -
            
            
            
            -
            
            
            
            -Current maturities of long-term
      debt
            
            
            3,379
            
            
            
            (1,679
            )(b)
            
            
            (1,700
            )(a)
            
            
            -
            
            
            
            -Total current liabilities and
      total liabilities
            
            
            8,202
            
            
            
            (6,207
            )
            
            
            (1,700
            )
            
            
            (243
            )
            
            
            52Stockholders'
      equity (deficit):Preferred
      Stock
            
            
            20,380
            
            
            
            (20,380
            )(c)(1)
            
            
            -
            
            
            
            -
            
            
            
            -Common
      Stock
            
            
            8
            
            
            
            (7
            )(c)
            
            
            -
            (d)
            
            
            
            
            
            
            1Treasury
      Stock
            
            
            (74
            )
            
            
            74
            (c)
            
            
            -
            
            
            
            -
            
            
            
            -Additional
      paid-in capital
            
            
            391,660
            
            
            
            20,313
            (b)(c)
            
            
            30
            (a)(d)
            
            
            (411,563
            )(f)
            
            
            440Accumulated
      deficit
            
            
            (418,013
            )
            
            
            6,207
            
            
            
            -
            
            
            
            411,806
            (e)(f)
            
            
            -Total stockholders' equity
      (deficit)
            
            
            (6,039
            )
            
            
            6,207
            
            
            
            30
            
            
            
            243
            
            
            
            441Total liabilities and
      stockholders' equity (deficit)
            
            $
            2,163
            
            
            $
            -
            
            
            $
            (1,670
            )
            
            $
            -
            
            
            $
            493





Debt and equity restructuring, reorganization
adjustments, and fresh start accounting adjustments consist primarily of the
following:





(a)
            To
      record payment of $1,700,000 to SDS on June 28, 2007, subject to the Joint
      Plan, and receipt of $30,000 from the Equity
  Financing.


(b)
            To
      record the discharge of subject to compromise liabilities as described in
      the Joint Plan.


(c)
            To
      record the discharge/termination of all outstanding Series E, Series G,
      Series J and Series J-1 Preferred Stock. Common Stock, and Treasury Stock
      of Old AHC in accordance with the Joint
Plan.


(d)
            To
      record issuance of 30,000 shares of common stock, $0.01 par value, under
      the Equity Financing valued at $1.00 per
share.


(e)
            During
      prior periods management had recorded estimated liabilities for inventory
      and other services for which they estimated the Company was obligated but
      for which the Company was never invoiced.  In connection with
      fresh start accounting, the Company’s management evaluated certain of
      these estimates and has adjusted the accrual to estimated fair
      value.


(f)
            To
      close out the remaining equity balances of Old AHC in accordance with the
      recapitalization provisions of fresh start
  accounting.





-23-


4.
            PURCHASE OF WAVE
      RIDER





Effective
March 28, 2006, the Company consummated the WaveRider Merger.  In
connection with the WaveRider Merger, the Company issued 48,362,446 shares of
common stock, 1,326.446 shares of Series H Preferred Stock, 132.6446 shares of
Series I Preferred Stock, 60 shares of Series J Preferred Stock and 8,842,089
common stock purchase warrants in exchange for all of the issued and outstanding
shares of WaveRider Communications, Inc. ("Waverider"), and assumption of all
outstanding liabilities.  The warrants were exercisable at $0.20 per
share for a five-year period and include a net share settlement
feature.  In addition, the Company issued to the employees of
WaveRider 2,125,545 employee stock options, with an average exercise price of
$1.02 and to the warrant holders of WaveRider 2,125,613 common share purchase
warrants, with an average exercise price of $1.84.





The
WaveRider Merger was accounted for as a purchase and is summarized as follows
(in thousands $):





Cash
      on hand (including cash from loans made by the Company prior to the
      acquisition which were forgiven on acquisition)
            
            $
            413Other
      current assets
            
            
            2,241Fixed
      assets
            
            
            200Current
      liabilities
            
            
            (2,787
            )Net
      assets received
            
            
            67Goodwill
            
            
            14,745Net
      assets acquired
            
            $
            14,812Common
      stock issued on closing
            
            $
            6,432Preferred
      stock issued on closing
            
            
            5,663Warrants
      issued on closing at fair value
            
            
            1,773WaveRider
      shares forfeited on merger
            
            
            450Employee
      stock options issued on closing at fair value
            
            
            81Expenses
      incurred on acquisition
            
            
            413Total
      consideration given
            
            $
            14,812The
      cash effect of this transaction is summarized as
      follows:Cash
      acquired on closing
            
            $
            413


-24-


The
Company determined that the goodwill created upon the WaveRider Merger be
allocated to the individual units acquired as follows (in thousands
$):





WaveRider
      Communications Inc.
            $
            12,679WaveRider
      Communications (Australia) Pty Ltd.
            
            1,150WaveRider
      Communications (Canada) Inc.
            
            916$
            14,745





5.
            DISCONTINUED
      OPERATIONS





On June
19, 2006, the Company’s Board of Directors approved the disposal of WaveRider’s
interest in WaveRider Communications (Australia) Pty Ltd. for cash consideration
of $370,000 plus contingent consideration of 15% of the trailing 12 months
revenue, payable quarterly in arrears.  The sale was completed on June
30, 2006.  In October, WaveRider  received the first payment
of the contingent consideration in the amount of $143,000.  WaveRider
received a lump-sum of $438,000 in 2007,in settlement of all further payment
obligations of WaveRider Communications (Australia) Pty Ltd. to
WaveRider.





On July
1, 2006, the Company disposed of its interests in WaveRider Communications
(Canada) Inc., including its wholly owned subsidiary JetStream Internet Services
Inc. (“JetStream”), WaveRider Communications (USA) Inc. and Avendo Wireless Inc.
for proceeds of $1,773,000, of which $1,388,000 was received in cash on that
date, and a $385,000 hold back which was to be paid, subject to satisfaction of
certain conditions (the"VCom Transaction").  Subsequent to closing, it
was determined that an adjustment of $385,000 was required, reducing the total
purchase price to the cash paid.





On
October 17, 2006, the Company sold WaveRider’s remaining operating business and
related assets associated with its 900 MHz product line to VCom, for the amount
of $1,250,000.  The purchase price was determined based on the
acquisition of trade accounts receivable, in the amount of $592,000, inventory
in the amount of $467,000, capital assets valued at $191,000, and goodwill and
other intangibles at $1.  The purchase price was subsequently reduced
for the change in the value of the accounts receivable and the inventory from
the original valuation date in the amount of $377,000.  VCom also
assumed responsibility for the cost of warranty support of WaveRider’s existing
900 MHz customer base and for certain WaveRider employees, related to the
business.  The purchase price was paid and satisfied first in
repayment to VCom of all amounts owing by the Company or its affiliates pursuant
to the supply agreement between VCom and WaveRider, which amount was
approximately $1.6 million.  As a result of this payment, and other
reconciliations in connection with the VCom Transaction, WaveRider received
net cash of $426,000, which amount was received in 2007.





On
November 2, 2006, the Court ordered the conduct of an auction to sell the
Company’s RMA Business.  As a result of the auction, which was held on
November 13, 2006, we sold the RMA Business was sold for approximately $405,000
in cash, plus the assumption of certain liabilities.





On August
10, 2007, the Company sold its remaining business, consisting of the SPEEDLAN
product line, for and in consideration for $100,000 (only $73,000 ultimately
collected), plus the assumption of all warranty obligations associated with the
product line.  The Company elected to sell its SPEEDLAN product line
since sales of the product line had decreased substantially since confirmation
of the Joint Plan, and since the cost to maintain, support and satisfy warranty
obligations did not justify the continued sale of SPEEDLAN products by the
Company.  In addition, sales were not anticipated to increase due to
the fact that the SPEEDLAN product was not competitive, in terms of price or
features, with other product offered by more established, and financially
stronger competitors.  As a result of this sale, the Company has no
further operating business.





Discontinued
operations consist of the following for the six months ended December 31, 2007
(Successor), the six months ended June 30, 2007 (Predecessor) and year ended
December 31, 2006 (Predecessor), (in thousands):





SUCCESSOR
            
            
            PREDECESSORSix
      Months Ended December 31, 2007
            
            
            Six
      Months Ended
              June
      30,
              2007
            
            
            Year
      Ended December 31, 2006Revenues
            
            $
            -
            
            
            $
            343
            
            
            $
            8,466Cost
      of sales
            
            
            -
            
            
            
            90
            
            
            
            6,009Gross
      profit
            
            
            -
            
            
            
            253
            
            
            
            2,457Operating
      expenses
            
            
            -
            
            
            
            -
            
            
            
            (3,085
            )Gain
      (loss) on disposal of assets
            
            
            (22
            )
            
            
            438
            
            
            
            1,008(Gain)
      loss from discontinued operations
            
            $
            (22
            )
            
            $
            691
            
            
            $
            380





The
Company received $438,000 on the settlement of a royalty agreement with
WaveRider Australia, which was sold during 2006.


-25-





Discontinued
operations in 2007 consists only of the SPEEDLAN product line. The components of
discontinued operations in 2006 are as follows:





Wave               
      Wireless Repair & Maintenance
            
            
            WaveRider              
      Australia
            
            
            WaveRider               
      Canada
            
            
            SPEEDLAN
            
            
            TotalRevenues
            
            $
            2,667
            
            
            $
            1,243
            
            
            $
            3,145
            
            
            $
            1,411
            
            
            $
            8,466Cost
      of goods sold
            
            
            2,468
            
            
            
            654
            
            
            
            2,175
            
            
            
            712
            
            
            
            6,009Gross
      profit
            
            
            199
            
            
            
            589
            
            
            
            970
            
            
            
            699
            
            
            
            2,457Operating
      expenses
            
            
            -
            
            
            
            (380
            )
            
            
            (2,705
            )
            
            
            -
            
            
            
            (3,085
            )Gain/(loss)
      on operations during 2006
            
            
            199
            
            
            
            209
            
            
            
            (1,735
            )
            
            
            699
            
            
            
            (628
            )Sales
      price
            
            
            405
            
            
            
            370
            
            
            
            1,814
            
            
            
            -
            
            
            
            2,589Net
      book value of assets sold
            
            
            -
            
            
            
            (1,305
            )
            
            
            (276
            )
            
            
            -
            
            
            
            (1,581
            )Gain/(loss)
      on disposal of assets
            
            
            405
            
            
            
            (935
            )
            
            
            1,538
            
            
            
            -
            
            
            
            1,008Gain/(loss)
      from discontinued operations
            
            $
            604
            
            
            $
            (726
            )
            
            $
            (197
            )
            
            $
            699
            
            
            $
            380





6.
            NOTES
      PAYABLE





At June
28, 2007, all pre-petition debt had been discharged or paid under the Joint
Plan..





Debenture
Financing.On November 10, 2005, the Company entered into an
agreement with a purchaser of notes issued under an existing Debenture Agreement
which exchanged all issued and outstanding notes for and in consideration for
the issuance to the purchaser of a new promissory note, in the principal amount
of $4,153,649 (the “New Note”), which amount represented unpaid principal and
accrued interest due under the terms of the old notes as of the date of the New
Note. Under the terms of the New Note, interest accrued on such debt at an
annual interest rate of 8%, and this rate increased to 10% on April 1,
2006.  The Company’s obligations under the Debenture Agreement were
covered by a Security Agreement covering all of the assets of the
Company.





On March
27, 2006, the Company and the purchaser entered into an Exchange Agreement,
pursuant to which the purchaser agreed to convert $1,230,475 of principal and
accrued interest due to purchaser on the date thereof into 260.3183 shares of
our Series J Convertible Preferred Stock and warrants to purchase 7,809,548
shares of our common stock, at an exercise price of $0.12 per share, (the “Note
Exchange”).  Such conversion was in lieu of the quarterly payments due
March 31, 2006 and June 30, 2006.  The Series J Convertible Preferred
Stock was convertible into 26,031,827 shares of the Company's common
stock.  The Company recorded a loss on conversion in the amount of
$3.507 million, included in finance expense in the 2006 consolidated
statement of operations.  The fair value of the financial instruments
issued was allocated to the Series J Convertible Preferred Stock and the
warrants, in the amount of $3,644,000 and $1,094,000, respectively.





As a
result of the Note Exchange, the total amount due to the debenture holder on the
Petition Date, which amount was in default, was approximately $2.4
million.





Convertible
Notes.During 2005, the
Company issued convertible promissory notes to certain purchasers in the
principal amount of $850,000, payable on or before March 31, 2006 (the
“Convertible Notes”).  Interest accrued on the Convertible Notes at an
annual interest rate of 10%.  As additional consideration for the
loans evidenced by the Convertible Notes, the holders were issued warrants for
the issuance of 2,125,000 shares of common stock of the Company, exercisable
for five years, at an exercise price of $0.20 per share.  The
Convertible Notes were discounted for the relative fair value of the warrants
issued and the intrinsic value of the beneficial conversion features associated
with these Convertible Notes.





From
January 1, 2006 through March 31, 2006, the Company issued additional
Convertible Notes to certain purchasers in the principal amount of $1.09
million.  As additional consideration for the loans evidenced by the
Convertible Notes, the holders were issued warrants for the issuance of
2,725,000 shares of common stock of the Company, exercisable for five years, at
an exercise price of $0.20 per share.   The Convertible Notes
were discounted for the relative fair value of the warrants issued and the
intrinsic value of the beneficial conversion features associated with these
Convertible Notes ($479,000).


-26-





Under the
terms of the Convertible Notes, as amended by the terms of the Amendment to
Promissory Note dated as of March 27, 2006 (the “Amendment Agreement”), the
outstanding principal amounts and all accrued but unpaid interest under the
terms of all issued and outstanding Convertible Notes automatically converted
into shares of Series J Convertible Preferred Stock and warrants to purchase
shares of common stock, at an exercise price of $0.12 per share, on March 31,
2006 (the “Series J Equity Securities”).  For purposes of determining
the number of Series J Equity Securities that each holder received upon
conversion, the holders were deemed to have tendered 120% of the outstanding
balance of the Convertible Notes as payment of the purchase price for the Series
J Equity Securities.  As a result of the foregoing, the Company issued
260.318 shares of Series J  Convertible Preferred Stock (convertible into
26,031,800 shares of common stock) and warrants to purchase 7,809,548 shares of
common stock.  As consideration for entering into the Amendment Agreement
the Company reduced the exercise price of the Warrants issued in conjunction
with Convertible Notes from $0.20 to $0.12 per share.  The Company
recorded a loss on conversion in the amount of $3.835 million, included in
finance expense in the 2006 consolidated statement of operations.





The
Series J Convertible Preferred Stock and warrants issued in connection with the
conversion of all outstanding Convertible Notes was convertible or exercisable,
as the case may be, into 31,728,719 and 9,518,616 shares of common stock,
respectively.   The fair value of the financial instruments
issued was allocated to the Series J Convertible Preferred Stock and the
warrants, in the amount of $4,442,000 and $1,332,000, respectively.





7.
            STOCKHOLDERS’
      EQUITY





At
December 31, 2007, the authorized shares of Azzurra Holding Corporation consist
of 250,000 shares of common stock, $0.01 par value and 100,000 shares were
issued and outstanding.





Under the
terms and conditions of the Joint Plan, as approved by the Court effective June
28, 2007, holders of the Company’s common stock will not receive any
distribution, and all of the rights of the then common and preferred
stockholders were terminated.





At
December 31, 2006, the authorized capital stock of the Company consisted of 250
million shares of common stock, $0.0001 par value, and 2.0 million shares of
preferred stock, $0.0001 par value, including 500,000 shares of which were
designated Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock") pursuant to the Stockholder Rights Agreement (see discussion
below), 2,000 shares of Series E Preferred Convertible Preferred Stock (the
"Series E Preferred Stock"), 250 shares of Series F Convertible Preferred Stock
(the "Series F Preferred Stock"), 10,000 shares of Series G Convertible
Preferred Stock (the "Series G Preferred Stock"), 2,000 shares of Series H
Convertible Preferred Stock (the “Series H Preferred Stock”), 200 shares of
Series I Convertible Preferred Stock (the “Series I Preferred Stock”), 1,250
shares of Series J Convertible Preferred Stock (the “Series J Preferred Stock”),
and 300 shares of Series J-1 Convertible Preferred Stock.





Activity
with respect to the various series of preferred stock for the year ended
December 31, 2006 and the period from January 1, 2007 through June 28, 2007 is
as follows:


-27-





Preferred
      Stock
              (In
      thousands)E
            
            
            
            F
            
            
            
            G
            
            
            
            H
            
            
            
            I
            
            
            
            J / J-1
            
            
            TotalBalance
      at January 1, 2006
            
            $
            332
            
            
            $
            661
            
            
            $
            3,344
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            4,337Preferred
      stock converted to common stock
            
            
            -
            
            
            
            (661
            )
            
            
            (120
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (781
            )Acquisition
      of WaveRider
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,882
            
            
            
            2,823
            
            
            
            958
            
            
            
            5,663Preferred
      stock issued in exchange for notes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            8,086
            
            
            
            8,086Series
      J Preferred issued to redeem Series H and I
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,882
            )
            
            
            (2,823
            )
            
            
            4,705
            
            
            
            -Preferred
      stock issued to consultants
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            568
            
            
            
            568Sale
      of preferred stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,308
            
            
            
            1,308Accretion
      of constructive dividend in connection with the sale of preferred
      stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,199
            
            
            
            1,199Balance
      at December 31, 2006
            
            
            332
            
            
            
            -
            
            
            
            3,224
            
            
            
            -
            
            
            
            -
            
            
            
            16,824
            
            
            
            20,380Reorganization
      pursuant to Joint Plan (Note 3)
            
            
            (332
            )
            
            
            -
            
            
            
            (3,224
            )
            
            
            -
            
            
            
            -
            
            
            
            (16,824
            )
            
            
            (20,380
            )Balance
      at June 28, 2008
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -








Preferred
      Stock Shares
              (In
      Thousands)E
            
            
            
            F
            
            
            
            G
            
            
            
            H
            
            
            
            I
            
            
            
            J / J-1Balance
      at January 1, 2006
            
            $
            0.9
            
            
            $
            0.3
            
            
            $
            6.6
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Preferred
      stock converted to common stock
            
            
            -
            
            
            
            (0.3
            )
            
            
            (0.3
            )
            
            
            -
            
            
            
            -
            
            
            
            -Acquisition
      of WaveRider
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1.3
            
            
            
            0.1
            
            
            
            0.10Preferred
      stock issued in exchange for notes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            0.6Series
      J Preferred issued to redeem Series H and I
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1.3
            )
            
            
            (0.1
            )
            
            
            0.3Preferred
      stock issued to consultants
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            0.1Sale
      of preferred stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            .3Balance
      at December 31, 2006
            
            
            0.9
            
            
            
            -
            
            
            
            6.3
            
            
            
            -
            
            
            
            -
            
            
            
            1.4Reorganization
      pursuant to Joint Plan
            
            
            (0.9
            )
            
            
            -
            
            
            
            (6.3
            )
            
            
            -
            
            
            
            -
            
            
            
            (1.4
            )Balance
      at June 28, 2008
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -





Series
E Convertible Preferred Stock





The
Company designated 2,000 shares of its Preferred Stock as Series E Convertible
Preferred Stock. The Series E Preferred Stock had a liquidation preference
amount equal to $1,000 per share. Each share of Series E Preferred Stock was
convertible into a number of shares of common stock equal to the liquidation
preference amount divided by the conversion price of $0.50.


-28-





As of
December 31, 2006, all outstanding Series E Preferred Stock
were convertible into approximately 1,846,262 shares of common
stock.





Series
G Convertible Preferred Stock





The
Company designated 10,000 shares of its preferred stock as Series G Convertible
Preferred Stock, of which 6,292 shares were issued and outstanding as of
December 31, 2006.





The
Series G Preferred Stock had a liquidation preference amount equal to $1,000 per
share. Each share of Series G Preferred Stock was convertible into a number of
shares of common stock equal to the liquidation preference amount divided by the
conversion price of $0.50.  During 2006, 233.58 shares of Series G
Preferred Stock were converted into 467,160 shares of common stock.





As of
December 31, 2006, all outstanding shares of Series G Preferred Stock were
convertible into approximately 12.6 million shares of common
stock.




Series
H and I Convertible Preferred Stock





The
Company designated 2,000 shares of its preferred stock as Series H Convertible
Preferred Stock (the "Series H Preferred Stock") and 200 shares of its preferred
stock as Series I Convertible Preferred Stock (the “Series I Preferred
Stock”).  In conjunction with the WaveRider Merger, the Company issued
1,326.446 shares of Series H Preferred Stock and 132.6446 shares of Series I
Preferred Stock as part of the consideration for that transaction, along with
warrants to purchase 8,842,089 shares of common stock, at an exercise price of
$0.20.





The
Series H Preferred Stock had a liquidation preference amount equal to $1,000 per
share. Each share of Series H Preferred Stock was convertible into a number of
shares of common stock equal to the liquidation preference amount divided by the
conversion price of $0.15.  The Series I Preferred Stock had a
liquidation preference amount equal to $1,000 per share. Each share of Series I
Preferred Stock was convertible into a number of shares of common stock equal to
the liquidation preference amount divided by the conversion price of
$0.01.





In
connection with the closing of the WaveRider Merger, all of the issued and
outstanding shares of the Series H and I Convertible Preferred Stock and the
related warrants were exchanged for 353.7333 shares of Series J Convertible
Preferred Stock and Series J Warrants to purchase 10,612,000 shares of common
stock.





The
Company, after consideration of several valuation models, determined the fair
value of the preferred stock issued in 2006 as an amount equal to the fair value
of the number of shares of common stock into which the resulting Series J
Preferred Stock was convertible using the trading market price on the date of
the WaveRider Merger.





Series
J Convertible Preferred Stock





The
Company designated 1,250 shares of its preferred stock as Series J Convertible
Preferred Stock (the "Series J Preferred Stock"), of which 1,247 shares were
issued and outstanding as of December 31, 2006.  The Series J
Preferred Stock had a liquidation preference amount equal to $7,500 per share.
Each share of Series J Preferred Stock was convertible into a number of shares
of common stock equal to the liquidation preference amount divided by the
conversion price of $0.075.


-29-


The
Company, after consideration of several valuation models, determined the fair
value of the preferred stock issued during 2006 as an amount equal to the fair
value of the number of shares of common stock into which the Series J Preferred
Stock was convertible into using the trading market price on the date the Series
J Preferred Stock was issued.





Series
J-1 Convertible Preferred Stock





The
Company designated 300 shares of its preferred stock as Series J-1 Convertible
Preferred Stock, of which 121 shares were issued and outstanding as of December
31, 2006.  The Series J-1 Preferred Stock had a liquidation preference
amount equal to $7,500 per share. Each share of Series J-1 Preferred Stock was
convertible into a number of shares of common stock equal to the liquidation
preference amount divided by the conversion price of $0.075.





The
Company, after consideration of several valuation models, determined the fair
value of the preferred stock as an amount equal to the fair value of the number
of common shares into which the Series J-1 Preferred Stock was convertible using
the trading market price on the date the Series J-1 Preferred Stock was
issued.





Common
Stock Warrants





The
following table summarizes common stock warrant activity for the year ended
December 31, 2006 and the period from January 1, 2007 through June 28, 2007 (in
thousands, except per share amounts):





2007
            
            
            2006Shares
            
            
            Price Range
            
            
            Shares
            
            
            Price RangeOutstanding
      at beginning of year
            
            
            51,351
            
            
            $
            0.0001
      - $1,275.00
            
            
            
            20,686
            
            
            $
            0.0001
      - $1,275.00Issued
            
            
            -
            
            
            
            -
            
            
            
            39,507
            
            
            $
            0.12
      - $0.20Exercised
            
            
            -
            
            
            
            -
            
            
            
            -Cancelled
            
            
            (51,351
            )
            
            $
            0.0001
      - $1,275.00
            
            
            
            (8,842
            )
            
            $
            0.20Outstanding
      at end of year
            
            
            -
            
            
            
            
            
            
            
            51,351Warrants
      exercisable at end of year
            
            
            -
            
            
            
            
            
            
            
            51,351Weighted
      average exercise price of warrants issued during the year
            
            $
            -
            
            
            
            
            
            
            $
            0.18





Common
stock warrants issued in 2006 were in connection with the business combination
and notes payable transactions discussed in Notes 4 and 6 as well as consultant
compensation of $167,000.  The warrants were terminated in 2007 in
connection with the confirmation of the Joint Plan.





Common
Stock Options





The
following table summarizes stock option activity under the Company's 2004 Stock
Option Plan for the year ended December 31, 2006 (in thousands, except per share
amounts):





Shares
            
            
            Weighted
      Average PriceOutstanding
      at January 1, 2006
            
            
            3,033
            
            
            $
            6.85Granted
            
            
            -
            
            
            $
            -Exercised
            
            
            -
            
            
            $
            -Cancelled
            
            
            (3,033
            )
            
            $
            6.85Outstanding
      at December 31, 2006
            
            
            -
            
            
            $
            -Options
      exercisable December 31, 2006
            
            
            -
            
            
            $
            -


During
2007 and 2006, no stock options were granted.





-30-





Stockholder
Rights Agreement





On
September 26, 1997, the Board of Directors of the Company adopted a Stockholder
Rights Agreement (the "Rights Agreement"). Pursuant to the Rights Agreement,
Rights (the "Rights") were distributed as a dividend on each outstanding share
of its Common Stock held by stockholders of record as of the close of business
on November 3, 1997. Each Right entitled stockholders to buy Series A Preferred
at an exercise price of $125.00 upon certain events. The Rights were to expire
ten years from the date of the Rights Agreement.  This agreement was
canceled under the Joint Plan.





8.
            ASSET IMPAIRMENT
      CHARGES





In light
of the softness in telecommunications equipment markets, disappointing results
in the Company's principal business units, a working capital deficit, and
management’s assessment regarding future operating results, at June 30, 2006,
the Company determined that an impairment charge was required on the basis that
the carrying value of goodwill exceeded its fair value.  Goodwill was
created by the excess of the purchase price over the fair values of net assets
acquired in connection with the acquisition of substantially all of the
operating assets and certain liabilities of SPEEDCOM Wireless Corporation
(“SPEEDCOM”), on December 10, 2003, and the WaveRider Merger, which was
consummated on March 27, 2006.





The
goodwill related to the acquisition of SPEEDCOM amounted to
$11,990,552.  After review of the potential proceeds on the sale of
the remaining assets associated with the SPEEDCOM product line, the Company
determined that an impairment charge of $11,740,552 was required on the basis
that the carrying value of goodwill exceeded its fair value.  On
December 31, 2006, the Company further impaired goodwill related to SPEEDCOM by
$150,000 because we determined the value of our SPEEDLAN product line to be
$100,000.





Goodwill
of approximately $12.8 million related to the WaveRider Merger was impaired at
June 30, 2006.





9.
            INCOME
      TAXES





Deferred
tax assets consist of the following (in thousands):





December
      31,2007
      (Successor)Net
      operating loss carry-forwards
            
            $
            134,721Credit
      carry-forwards
            
            
            4,028Reserves
      and other
            
            
            82Total
      deferred tax assets
            
            $
            138,831Valuation
      allowance
            
            
            (138,831)Net
      deferred tax asset
            
            $
            --





The
Federal and state net operating loss carryforward for tax purposes is
approximately $362.0 million and $138.0 million, respectively, at December 31,
2007, which begin to expire in 2012.  The Company's ability to utilize
these carryforwards may be severely limited or lost pursuant to Section 382 of
the Internal Revenue Code as a result of the change in control of the Company
under the Joint Plan confirmed by the Court on June 14, 2007.  Other
limitations may apply as well.  The Company has made no determination as to
what these limitations may be.





Deferred
income taxes reflect the tax consequences on future years of differences between
the tax bases of assets and liabilities and their bases for financial reporting
purposes. In addition, future tax benefits, such as net operating loss
carry-forwards, are recognized to the extent that realization of such benefits
is more likely than not. The Company has assessed its ability to realize future
tax benefits and concluded that, as a result of the history of losses and the
significant uncertainty regarding limitation or loss of net operating losses as
previously discussed, it was more likely than not that such benefits would not
be realized. Accordingly, the Company has recorded a full valuation allowance
against future deferred tax benefits.


-31-




Reconciliation
of the statutory Federal income tax rate to its effective tax rate is as
follows:





Year
      Ended December 31,2007
            
            2006Income
      tax benefit at federal statutory rate
            
            
            -35.0
            %
            -35.0
            %State
      income taxes net of federal benefit
            
            
            -5.8
            %
            -5.8
            %Expiring
      credits and other
            
            
            -5.8
            
            0.0Change
      in valuation allowance
            
            
            -46.6
              46.6
            %
            -40.8
              40.8
            %Total
            
            
            0.0
            %
            0.0
            %





10.
            SUPPLEMENTAL CASH FLOW
      INFORMATION





The
following provides additional information concerning supplemental disclosure of
cash flow activities (in thousands).









Year
      Ended December 31,2007
            
            
            2006Cash
      paid for income taxes
            
            $
            -
            
            
            $
            -Cash
      paid for interest
            
            $
            -
            
            
            $
            12Warrants
      issued in connection with convertible promissory
    notes
            
            $
            -
            
            
            $
            261Conversion
      of debt into preferred stock
            
            $
            -
            
            
            $
            10,512





Non-Cash
Investing and Financing Transactions





2007





On June
28, 2007, in accordance with the Joint Plan, the Company issued 70,000 shares of
new AHC common stock, $0.01 par value, to SDS in consideration for relief of
debt obligations (see Note 1).





2006




As
discussed in Note 6, on March 27, 2006 the Company issued Series J Convertible
Preferred stock and common stock warrants with a fair value of $4.738 million as
consideration for the liquidation/conversion of $1.230 million of debentures and
accrual interest.  Additionally, as discussed in Note 6, on March 27,
2006 the Company issued Series J Preferred stock and common stock warrants with
a fair value of $5.774 million as consideration for the liquidation/conversion
$1.939 million of convertible notes.  The fair value of the securities
issued in connection with both these transactions were recorded as derivative
liabilities.




As
discussed in Note 4, the Company issued preferred and common stock and common
stock warrants and options and forfeited certain investments with an aggregate
fair value of $14.399 million as the majority of consideration paid for the
WaveRider Communications, Inc. purchase/merger.


-32-










SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




Date:
      August 14, 2008
            By:
            /s/ 
      Daniel W.
      RumseyDaniel
      W. RumseyChief
      Executive Officer




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








Signature
            
            Title
            
            Date/s/
      Daniel W. Rumsey
            
            Chief
      Executive OfficerDaniel
      W. Rumsey
            
            (Principal
      Executive Officer)
            
            August
      14, 2008/s/
      Daniel W. Rumsey
            
            (Principal
      Financial Officer andDaniel
      W. Rumsey
            
            Principal
      Accounting Officer)
            
            August
      14, 2008/s/
      Richard Reiss
            
            Director
      of the Company
            
            August
      14, 2008Richard
      Reiss/s/
      Mark Shaftlein
            
            Director
      of the Company
            
            August
      14, 2008Mark
      Shaftlein
















-33-










INDEX OF EXHIBITS




2.3(1)
            Joint
      Plan of Reorganization3.1
      (1)
            Amended
      and Restated Articles of Incorporation3.2(1)
            Amended
      and Restated Bylaws10.5(1)
            Contingent
      Unsecured Promissory Note of the Registrant in Favor of the Plan
      Trust.10.6(1)
            Secured
      Promissory Note in Favor of SDS Capital Group SPC, Ltd.10.7(1)
            Security
      Agreement in Favor of SDS Capital Group SPC, Ltd.14.1
            Code
      of Ethics31.1
            Rule
      13a-14(a)/15d-14(a) Certification31.2
            Rule
      13a-14(a)/15d-14(a) Certification32.1
            Section
      1350 Certification32.2
            Section
      1350 Certification





(1)
            Incorporated
      by reference to Exhibits 3.1 and 3.2 of the Company’s Current Report on
      Form 8-K filed with the Securities and Exchange Commission on July 5,
      2007.
















-34-