##### Table of Contents



United States Securities and Exchange Commission
 Washington, D. C. 20549
 Form 10-KSB
 þ
    
    Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 for the Fiscal Year Ended December 31, 2006.
 or
 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 001-12565
 Champion Communication Services, Inc.
 Delaware
    
    76-0448005(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)1610 Woodstead Court, Suite 330The Woodlands, Texas
    
    77380(Address of Principal Offices)
    
    (Zip Code)
 (281) 362-0144
  Title of Each ClassNone
    
    Name of Exchange on which RegisteredNone
  Title of Each Class
    
    Name of Exchange on which RegisteredCommon Stock, par value $.01 per share
    
    None
 þ o
 þ
 o þ
    o þ




---



##### 



Champion Communication Services, Inc. and Subsidiaries
 INDEX
    
    Page NumberGlossary of Terms
    
    
    iPART IItem 1. Description of Business
    
    
    1Item 2. Description of Property
    
    
    9Item 3. Legal Proceedings
    
    
    9Item 4. Submission of Matters to a Vote of Security Holders
    
    
    9PART IIItem 5. Market for Common Equity, Related Stockholder Matters and Small
Business Issuer Purchases of Equity Securities
    
    
    10Item 6. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    11Item 7. Financial Statements
    
    
    14Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    14Item 8A. Control and Procedures
    
    
    14PART IIIItem 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with
Section 16 (a) of the Exchange Act
    
    
    15Item 10. Executive Compensation
    
    
    16Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    19Item 12. Certain Relationships and Related Transactions
    
    
    19Item 13. Exhibits and Reports on Form 8-K
    
    
    20Item 14. Principal Accountant Fees and Services
    
    
    22Signatures
    
    
    23Certification by Albert F. Richmond Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002Certification by Pamela R. Cooper Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002Lease AgreementCommission Agreement AmendmentCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO and CFO Pursuant to Section 906




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##### Table of Contents



Glossary of Terms
  Airtime Charges
    
    Charges to users of wireless
communications services based on
the actual minutes of use.Analog
    
    A transmission method employing a
continuous (rather than pulsed or
digital) electrical signal that
varies in amplitude or frequency
in response to changes in sound
or other input impressed on a
transducer in the sending device.
Current SMR technology primarily
uses analog transmission.Bandwidth
    
    The relative range of frequencies
that can be passed through a
transmission medium between two
defined limits without
distortion. The greater the
bandwidth, the more information
the medium can carry. Bandwidth
is measured in Hertz.Base Station
    
    A station located at a specified
site authorized to communicate
with mobile stations.Basic Trading Area (BTA)
    
    As defined by Rand McNally, one
of 492 rural areas used for PCS
licensing.Channel
    
    A pathway for the transmission of
information between a sending
point and a receiving point; also
referred to as frequency. In
SMR, a channel refers to a set of
paired send and receive
frequencies. Thus, a
five-channel 800 MHz SMR actually
has 10-25 kHz channels: five
send channels and five receive
channels.Co-channel
    
    Relates to the authorization or
operation of two transmitters on
the same frequency, normally
separated by some defined
distance. Co-channel operators
may not interfere with each other
unless separated by sufficient
distance or operated in a
coordinated manner.Commercial Mobile Radio Service (CMRS)
    
    Mobile services licensed by the
FCC that are provided for profit,
are interconnected to the PSN and
are available to the general
public on a non-discriminatory
basis. These CMRS providers
historically have been referred
to as common carriers.Community Repeater (CR)
    
    Conventional two-way radio
systems licensed by the FCC that
consist of a control station, a
repeater station and mobile
and/or portable radios. The
repeater is shared by otherwise
unrelated users.Conventional System
    
    A method of operation in which
one or more radio frequency
channels are assigned to mobile
and base stations but are not
employed as a trunked group. A
conventional system allows an end
user the use of only a single
channel. If someone else already
is using that end users assigned
channel, the end user must wait
until the channel is available.Digital
    
    A method of storing, processing
and transmitting information
through the use of distinct
electronic or optical pulses.
Digital transmission and
switching technologies employ a
sequence of discrete, distinct
pulses to represent information,
as opposed to the continuously
variable analog signal.




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##### Table of Contents



Dispatch
    
    A service provided to customers who want to
transmit and receive short messages to and
from a fleet of vehicles operating within
range of the systems repeater.800 MHz (SMR)
    
    As a group, the 280 channels of trunked SMR
frequencies in the 800 MHz band with 25 kHz
channel bandwidth. Some cellular radio
frequencies are also in the 800 MHz band.
Radio equipment used for 800 MHz SMRs is not
compatible with radio equipment used for 900
MHz SMRs.Enhanced Specialized Mobile
Radio (ESMR)
    
    SMR multi-site digital networks, which are
designed to provide integrated
telecommunications services, including
wireless, telephone, paging, data
transmission and dispatch services. ESMR
generally is used as a dispatch technology,
although it also may be interconnected with
the PSN to provide mobile telephone services.
Champion does not provide ESMR services.FCC
    
    Federal Communications Commission.450-512 MHz Band
    
    450-470 MHz  A group of frequencies
operating with a narrow channel bandwidth,
which is shared with an unlimited number of
users (co-channel operation) utilizing an
unlimited number of units. Thus, user
exclusivity on a particular frequency during
a call is currently not achievable in this
band.470-512 MHz  A group of frequencies
operating with a narrow channel bandwidth, an
unlimited number of users, and a limited
number of units. Thus, user exclusivity on a
particular frequency during a call is
currently achievable in this band.Global Positioning System
(GPS)
    
    A worldwide radio-navigation system of
satellites. GPS uses these satellites as
reference points to calculate accurate
physical positions.Hertz
    
    The unit for measuring the frequency with
which an electromagnetic signal cycles
through the zero-value state between lowest
and highest state. One Hertz (abbreviated
Hz) equals one cycle per second; kHz
(kilohertz) stands for thousands of Hertz;
MHz (megahertz) stands for millions of Hertz.Loading
    
    The capacity utilization of a land mobile
communications system. The FCC requires
licensees of PMRS systems to load a specified
number of units per channel within a certain
time frame or before certain actions can be
taken. If a licensee does not meet this
loading requirement, the FCC may take back a
proportionate number of the licensees
unloaded channels.Logic Trunked Radios (LTR)
    
    A technology commonly used in Trunked Systems.Major Metropolitan Areas
    
    Metropolitan areas (as defined by the U.S.
Office of Management and Budget) with a
population of 1,000,000 or more.




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##### Table of Contents



Major Trading Areas (MTAs)
    
    Service areas based on the 47 areas
contained in Rand McNallys 1992
Commercial Atlas and Marketing
Guide, 123rd Edition, except that: (1) Alaska is separate from Seattle,
(2) Guam and Northern Mariana
Islands are licensed as a single
area, (3) Puerto Rico and the United
States Virgin Islands are licensed
as a single area, and (4) American
Samoa is licensed as a single
MTA-like area. These modifications
by the FCC resulted in a total of 51
MTAs. A MTA license authorizes a
specific block of SMR Spectrum in
one (1) of 51 MTAs.900 MHz SMR
    
    As a group, the 200 channels of
trunked SMR frequencies in the 900
MHz band with 12.5 kHz channel
bandwidth. The FCC initially
licensed these channels only in the
top 50 markets. The FCC has
auctioned all 900 MHz SMR channels
for every MTA.Paging
    
    A one-way communications service
licensed by the FCC that operates
from a base station to mobile or
fixed receivers and that provides
signaling or information transfer by
such means as tone, tone-voice,
tactile or optical readout. Paging
services are provided on several
bands, including the 450-512 MHz and
900 MHz bands.Personal Communication Services
(PCS)
    
    A wireless communication technology
licensed by the FCC. It operates
on the 900 MHz (narrowband) and on
the 2 GHz (broadband) frequency
bands. PCS is a radio
communications service using mobile
and ancillary fixed communication
technologies to provide services for
industry and business. This service
can be integrated with a variety of
competing networks. A broadband
PCS, with a wider channel bandwidth,
provides a greater variety of
services than narrowband PCS (e.g.,
broadband PCS can provide full voice
and data transmission, but
narrowband PCS generally is limited
to one-way services).Private Mobile Radio Service (PMRS)
    
    Two-way radio operations licensed by
the FCC that offer dispatch and
other wireless communications
services. These services generally
cannot be interconnected to the PSN.
An operator may provide such
services on a discriminatory basis.
Operators that provide dispatch
services in the bands below 800 MHz
are regulated as PMRS licensees.
These PMRS licensees historically
have been referred to as private
carriers.Public Switched Network (PSN)
    
    Historically referred to as the
Public Switched Telephone Network
or PSTN.Repeater
    
    A device which automatically
retransmits received signals on an
outbound circuit, generally in an
amplified form.Roam(ing)
    
    A service offered by mobile
communications providers which
allows a subscriber to use a mobile
phone while in the service area of
another carrier.Site
    
    The location of a base station or
repeater in a radio communications
system.




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##### Table of Contents



Specialized Mobile Radio
(SMR)
    
    A radio system authorized by the FCC in which
licensees provide mobile communications services
(other than radio location services) in the 800 MHz
and 900 MHz bands on a commercial basis to eligible
entities, federal government entities and individuals.
It is generally used as a dispatch technology, but
also can be used to provide data and facsimile
services. SMR may be interconnected with the PSN to
provide telephone interconnect services. SMR is
offered typically as a Trunked System but also may be
offered as a Conventional System.Spectrum
    
    A term generally applied to the range of
electromagnetic radio frequencies used in the
transmission of sound, data, and television.Switch
    
    A device that opens or closes circuits or selects the
paths or circuits to be used for transmission of
information. Switching is the process of
interconnecting circuits to form a transmission path
between users.Talk N Track
    
    Champions service providing both voice and vehicle
tracking of the units of subscribers on Champions LTR
systems.T-Band
    
    The group of channels operating at 470-512 MHz
previously assigned to the UHF band.Telephone Interconnect
    
    Connection of a telecommunications device or service
to the PSN. In SMR, Telephone Interconnect refers to
the service provided to a customer, which allows
specified customer units to have the capability to
connect directly to the PSN and thereby communicate
with any other party that can be reached over the PSN.Trunked System
    
    A system that combines multiple channels with
unrestricted access in such a manner that user demands
for channels are automatically queued and then
allocated to the first available channel. Compared to
a Conventional System, this method allows for the use
of frequencies by a greater number of users and
provides faster access, thereby reducing the
likelihood of network congestion.UHF
    
    An ultra high frequency in the 450  512 MHz bandwidth.Unit
    
    A base, mobile or hand held radio.Universal Licensing 
Service (ULS)
    
    The FCCs electronic system for filing PMRS and other
wireless applications, coordination data, and other
accessory information.Vehicle Tracking
    
    The use of GPS and radio equipment to identify the
physical location of fleet vehicles.Wireless Local Loop (WLL)
    
    A radio system providing communication from subscriber
to provider without wires. This technology is
especially useful in sparsely populated areas and in
areas with difficult terrain. Champions is a high
site, high power format.




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##### Table of Contents



PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS
  RECENT EVENTS  ASSET SALE
   THE COMPANY
    1




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##### Table of Contents



THE DISPATCH INDUSTRY
 OVERVIEW
    2




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##### Table of Contents



CURRENT BUSINESS
 GENERAL
   450-512 MHz Repeater Operations.
   800 MHz Repeater Operations.
 International. TM
 3




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##### Table of Contents



BUSINESS STRATEGY
  COMPETITION
  Other 470-512 MHz Band CR Operators.
  Cellular Telephone Systems.
 800 MHz Band SMR Operators.
 900 MHz Band SMR Operators.
 PCS Operators.
 4




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##### Table of Contents



Wireless Local Loop
   REGULATION
   5




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##### Table of Contents



i.e. i.e.
 Regulatory Developments.
 OPERATIONS
     EMPLOYEES
  RISK FACTORS
  6




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If our proposed acquisition by FleetTALK is not completed, our business could be materially and
adversely affected and our stock price could decline.
  We have a lack of accumulated earnings, and we may not become profitable in the future.
  Our market is characterized by rapid technological advances, and we cannot assure you that we will
be able to develop services or products to meet these technological advances.
  We face intense competition from a variety of competitors, many with significantly greater
resources.
  7




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##### Table of Contents



Departures of our key personnel may impair our operations.
  Our officers and directors have significant control over us.
  We do not anticipate paying any dividends, but could make a distribution to stockholders if we
close the Asset Sale with FleetTALK.
  We are a highly regulated business, and any regulatory changes could affect our business adversely.
   We may not be able to acquire and maintain the required FCC licenses.
  8




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##### Table of Contents



Provisions in our charter documents limit your ability to approve or deny matters affecting our
operations and could delay or prevent a change in corporate control.
   
 ITEM 2. DESCRIPTION OF PROPERTY
   Location
    
    Lease ExpirationVarious in TX, CA, MD
    
    August 2007Willis, TX
    
    July 2007Dallas, TX
    
    April 2007San Francisco, CA
    
    February 2007McKinney, TX
    
    December 2007Houston, TX
    
    May 2009Washington, DC
    
    July 2009Baltimore, MD
    
    March 2010
 
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  9




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PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
  U. S. OTC Bulletin Board
    
    TSX Venture Exchange(All amounts are in U.S. $)
    
    (All amounts are in CDN $)Date
    
    High
    
    Low
    
    High
    
    LowMarch 31, 2005
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.15
    
    
    $
    0.15June 30, 2005
    
    $
    0.33
    
    
    $
    0.33
    
    
    $
    0.15
    
    
    $
    0.15September 30, 2005
    
    $
    0.25
    
    
    $
    0.25
    
    
    $
    0.15
    
    
    $
    0.15December 31, 2005
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.15
    
    
    $
    0.15March 31, 2006
    
    $
    0.27
    
    
    $
    0.27
    
    
    $
    0.07
    
    
    $
    0.07June 30, 2006
    
    $
    0.38
    
    
    $
    0.38
    
    
    $
    0.05
    
    
    $
    0.05September 30, 2006
    
    $
    0.28
    
    
    $
    0.28
    
    
    $
    0.09
    
    
    $
    0.09December 31, 2006
    
    $
    0.23
    
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.13
     No. of Options
    
    ExerciseDate of Grant
    
    Granted
    
    PriceApril 22, 2005
    
    
    20,000
    
    
    $
    0.18July 25, 2005
    
    
    20,000
    
    
    $
    0.38
 10




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##### Table of Contents



(C)Number of SharesRemaining Available for(A)
    
    (B)
    
    Future Issuance UnderNumber of Shares to be
    
    Weighted Average
    
    Equity CompensationIssued Upon Exercise of
    
    Exercise Price of
    
    Plans (Excluding SharesPlan Category
    
    Outstanding Options
    
    Outstanding Options
    
    Reflected in Column A)Equity compensation
plans approved by
shareholders
    
    
    425,500
    
    
    
    $0.58
    
    
    NoneEquity
compensation plans
not approved by
shareholders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    425,500
    
    
    
    $0.58
    
    
    None
 
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 The following discussion should be read in conjunction with our consolidated financial
statements and the notes thereto included elsewhere in this Report on Form 10-KSB . The discussion
in this section of this Report on Form 10-KSB contains forward-looking statements that involve
risks and uncertainties. If the sale of assets is not consummated, we will need to raise capital or
negotiate a new sale of the assets in order to generate cash flow required to continue operations.
Our actual results could differ materially from those discussed herein. Factors that could cause
or contribute to such differences include, but are not limited to, those discussed in this section,
those discussed in Risk Factors and those discussed elsewhere in this Report on Form 10-KSB .
 INTRODUCTORY STATEMENT  PROPOSED ASSET SALE
  RESULTS OF OPERATIONS
  11




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##### Table of Contents



December 31, 2006 Compared to December 31, 2005
    12




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LIQUIDITY AND CAPITAL RESOURCES
       SUMMARY OF CRITICAL ACCOUNTING POLICIES
 Communications Equipment and Related Assets
  13




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##### Table of Contents



Other Assets
  NEW ACCOUNTING PRONOUNCEMENTS
  EFFECTS OF INFLATION
  
 ITEM 7. FINANCIAL STATEMENTS
  
 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 8A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  14




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##### Table of Contents



PART III
 
 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT.
  Name
    
    Age
    
    PositionAlbert F. Richmond (1)(2)
Houston, Texas
    
    
    65
    
    
    Chairman of the Board, Chief Executive Officer and PresidentPamela R. Cooper
Spring, Texas
    
    
    54
    
    
    Chief Financial Officer, Treasurer, Secretary and ControllerPeter F. Dicks (1)(2)(3)
London, England
    
    
    64
    
    
    DirectorJames H. Grossman (1)(2)(3)
San Francisco, California
    
    
    67
    
    
    Director
 
 (1)
    
    Member of Audit Committee(2)
    
    Member of Compensation Committee(3)
    
    Resigned their positions effective February 22, 2006  ALBERT F. RICHMOND
 PETER F. DICKS
 JAMES H. GROSSMAN
 15




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##### Table of Contents



Audit Committee Financial Expert
  Compliance with Section 16(a) of the Exchange Act
  Code of Ethics
  
 ITEM 10. EXECUTIVE COMPENSATION
 Compensation of Directors
  Compensation of Executive Officers
  SUMMARY COMPENSATION TABLE
 Non-Equity
    
    NonqualifiedName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    Incentive Plan
    
    Deferred
    
    All OtherPrincipal
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards
    
    Awards
    
    Compensation
    
    Compensation
    
    CompensationPosition
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    ($)
    
    ($)
    
    ($)
    
    Earnings ($)
    
    ($)
    
    Total ($)Albert F. Richmond
    
    
    2006
    
    
    $
    36,000
    (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    23,735
    
    
    
    
    
    
    $
    59,735Chief Executive
Officer
    
    
    2005
    
    
    $
    19,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,521
    
    
    
    
    
    
    $
    24,012Pamela R. Cooper
    
    
    2006
    
    
    $
    108,325
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    108,325Chief Financial
Officer
    
    
    2005
    
    
    $
    100,225
    
    
    $
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12,528
    
    
    
    
    
    
    $
    117,753
 16




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##### Table of Contents



(1)
    
    Does not include $217,500 paid as commission in 2005 to Richmond Holdings, Inc., earned
as a result of the sale of Illinois, Indiana and Florida. Mr. Richmond entered into a Deferred
Compensation Agreement with the Company effective October 4, 2006 allowing him to receive 50% of
his annual salary in the form of stock. Under this agreement he was granted deferred stock
compensation equivalent to $12,500 for 2006 and $11,235 for 2005. Employment and Other Agreements
   Equity Awards
  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
 Option Awards
    
    Stock AwardsEquityEquity
    
    IncentiveEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Incentive
    
    Plan Awards:Incentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan Awards:
    
    Market orPlan Awards:
    
    
    
    
    
    
    
    
    
    Number
    
    Market
    
    Number of
    
    Payout ValueNumber of
    
    
    
    
    
    
    
    
    
    of Shares
    
    Value of
    
    Unearned
    
    of UnearnedNumber of
    
    Number of
    
    Securities
    
    
    
    
    
    
    
    
    
    or Units
    
    Shares or
    
    Shares, Units
    
    Shares, UnitsSecurities
    
    Securities
    
    Underlying
    
    
    
    
    
    
    
    
    
    of Stock
    
    Units of
    
    or Other
    
    or OtherUnderlying
    
    Underlying
    
    Unexercised
    
    Option
    
    Option
    
    That
    
    Stock That
    
    Rights That
    
    Rights ThatUnexercised
    
    Unexercised
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have Not
    
    Have Not
    
    Have NotOptions (#)
    
    Options (#)
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($)
    
    Vested (#)
    
    Vested ($)Name
    
    Exercisable
    
    UnexercisableWalbert F.
Richmond
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pamela R.
Cooper
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    11/14/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pamela R. Cooper
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    0.875
    
    
    
    4/15/2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pamela R. Cooper
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    0.57
    
    
    
    4/03/2013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Director Compensation
  17




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DIRECTOR COMPENSATION
 FeesEarned orPaid
    
    Stock
    
    Option
    
    Non-Equity
    
    Nonqualified
    
    All OtherName
    
    in Cash ($)
    
    Awards ($)
    
    Awards ($)
    
    Incentive Plan
    
    Deferred
    
    Compensation ($)
    
    Total ($)Peter F. Dicks
    
    
    
    (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    James H.
Grossman
    
    
    
    (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Mr. Dicks and Mr. Grossman resigned from our Board of Directors, Audit and
Compensation Committees effective as of February 22, 2006. Our Directors were paid no compensation
for 2006, however; we extended the exercise date for options granted to the outside directors from
90 days to two years after termination of service. Limitation of Liability and Indemnification of Executive Officers
  any breach of the directors duty of loyalty to us or our stockholders;acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions; orany transaction from which the director derived an improper personal benefit.
     18




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##### Table of Contents



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  PercentBeneficiallyName of Beneficial Owner (1)
    
    Number of Shares
    
    OwnedAlbert F. Richmond
    
    
    2,286,550
    (2)
    
    
    51.00
    %Pamela R. Cooper
    
    
    205,900
    (3)
    
    
    4.26
    %All executive officers and directors as a group
    
    
    2,492,450
    
    
    
    52.56
    %
 
 (1)
    
    Except as otherwise noted, the address of each holder is 1610 Woodstead Court, Suite 330, The
Woodlands, Texas 77380.(2)
    
    Includes 199,900 shares held in Richmond Holdings, Inc. of which Albert F. Richmond is the
sole stockholder. Includes 7,500 shares held by Morgan Stanley D.W. Inc., as Custodian of IRA
for Linda L. Richmond and 37,500 shares held by Morgan Stanley D. W. Inc., Ttee. FBO for
Albert F. Richmond, IRA.(3)
    
    Includes 11,700 shares held by JP Morgan Securities, as Custodian of IRA and 172,000 shares
that Ms. Cooper may acquire upon the exercise of currently exercisable stock options. Equity Compensation Plan Information
  (C)Number of SharesRemaining Available for(A)
    
    (B)
    
    Future Issuance UnderNumber of Shares to be
    
    Weighted Average
    
    Equity Compensation PlansIssued Upon Exercise of
    
    Exercise Price of
    
    (Excluding SharesPlan Category
    
    Outstanding Options
    
    Outstanding Options
    
    Reflected in Column A)Equity compensation
plans approved by
shareholders
    
    
    425,500
    
    
    $
    0.58
    
    
    NoneEquity
compensation plans
not approved by
shareholders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Certain Relationships and Related Transactions
  19




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##### Table of Contents



Director Independence
  
 ITEM 13. EXHIBITS
 Incorporated byNumber
    
    Description
    
    Reference to3.1
    
    Certificate of Incorporation
filed September 29, 1994.
    
    Exhibit 3.1 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)3.2
    
    Certificate of Amendment to
Certificate of Incorporation
filed January 26, 1996.
    
    Exhibit 3.2 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)3.3
    
    Certificate of Amendment to
Certificate of Incorporation
filed April 23, 1996.
    
    Exhibit 3.3 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)3.4
    
    By-laws dated September 29, 1994.
    
    Exhibit 3.4 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)3.5
    
    Amended and Restated By-laws, as
adopted January 23, 2002.
    
    Exhibit 99.2 of the
Companys Current
Report on Form 8-K
filed February 6, 2002
(File No. 001-12565)4.1
    
    Specimen Common Stock share
certificate.
    
    Exhibit 4.1 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)4.2
    
    Pages from Certificate of
Incorporation and By-laws
defining rights of stockholders
- included in Exhibits 3.1, 3.2,
3.3 and 3.4.
    
    Exhibit 4.2 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)10.1
    
    Form of Indemnification
Agreement between officers and
director of the Company and the
Company.
    
    Exhibit 10.27 to the
Registration Statement
on Form 10-SB
effective February 13,
1997
(File No. 0-29032)10.3
    
    Lease Agreement dated January 1,
2000, between Woodlands office
Equities 95
Limited and the Company.
    
    Exhibit 10.30 to the
10-KSB filed March 30,
2000 (File No.
001-12565)
 20




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##### Table of Contents



Incorporated byNumber
    
    Description
    
    Reference to10.4*
    
    Lease Amendment dated November
10, 2005 between
Woodstead-Grogan Operating
Associates, L.P. and the Company10.5
    
    Master Antenna Site Lease No.
130 dated February 1, 1999
between Pinnacle Towers, Inc.
and the Company
    
    Exhibit 10.50 to the
10-KSB filed March 31,
2003 (File No.
001-12565)10.6**
    
    Commission Agreement dated July
1, 2004, between Richmond
Holdings, Inc. and the Company
    
    Exhibit 10.6 to the
10-KSB filed April 1,
2005 (File No.
001-12565)10.7
    
    Asset Purchase Agreement, dated
December 30, 2004 between ESP
Wireless Technology Group, Inc.
and the Company
    
    Exhibit 10.7 to the
10-KSB filed April 1,
2005 (File No.
001-12565)10.8
    
    Asset Purchase Agreement, dated
February 13, 2007, between
FleetTALK Partners, Ltd. and the
Company
    
    Exhibit 10.1 to the
8-K filed February 20,
200710.9
    
    Management Agreement, dated
February 13, 2007 between
FleetTALK Partners Ltd and the
Company
    
    Exhibit 10.2 to the
8-K filed February 20,
200710.10**
    
    Deferred Compensation Agreement,
dated October 4, 2006 between
Albert F. Richmond and the
Company
    
    Exhibit 10.1 to the
Form 10-QSB filed
November 14, 200610.11*
    
    Commission Agreement Amendment
dated July 1, 2006 between
Richmond Holdings, Inc. and the
Company21
    
    Subsidiaries
    
    Exhibit 21 to the
10-KSB filed April 1,
2005 (File No.
001-12565)24.1
    
    Power of Attorney (included on
signature page)31.1*
    
    Certification of the Chief
Executive Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of the Chief
Financial Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act of 200232.1*
    
    Certification of the Chief
Executive Officer and Chief
Financial Officer Pursuant to 18
U.S.C. Section 1350, Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith.**
    
    Management contract or executive compensation plan or arrangement. 21




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Fiscal year ended2006
    
    
    2005Audit Fees (1)
    
    $
    47,000
    
    
    $
    44,155Audit-Related Fees (2)
    
    
    3,785
    
    
    
    Total Audit and Audit-Related Fees
    
    $
    50,785
    
    
    $
    44,155
 
 (1)
    
    Of the total for fiscal year 2005, $38,000 in audit fees were billed to us by GLO CPAs, LLP
and $6,155 by Malone & Bailey, PC for its review of the condensed financial statements
included in our Quarterly Reports on Form 10-QSB. Audit fees represent fees for professional
services rendered in connection with the engagement to audit and report on the financial
statements, review of quarterly and annual financial statements.(2)
    
    Audit-related fees for assurance and related services that are reasonably related to the
performance or review of our financial statements and are not included above as Audit Fees.  22




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##### Table of Contents



SIGNATURES
  CHAMPION COMMUNICATION SERVICES, INC.By:
    /s/  Albert F. RichmondAlbert F. Richmond,Chairman of the Board,
Chief Executive Officer and President    Signature
    
    Title
    
    Date/s/ Albert F. Richmond

Albert F. Richmond
    
    Chairman of the Board, 
Chief Executive Officer and
President
    
    April 15, 2007/s/ Pamela R. Cooper

Pamela R. Cooper
    
    Chief Financial Officer, Treasurer,
and Controller
    
    April 15, 2007
 23




---



##### 



PageConsolidated Financial Statements:Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets, December 31, 2006 and 2005
    
    
    F-3Consolidated Statements of Operations, Years Ended December 31, 2006 and 2005
    
    
    F-4Consolidated Statements of Stockholders Equity, Years Ended
December 31, 2006 and 2005
    
    
    F-5Consolidated Statements of Cash Flows, Years Ended December 31, 2006 and 2005
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
  F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Accounting for Stock-Based
Compensation
  
 F-2




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##### Table of Contents



CHAMPION COMMUNICATION SERVICES, INC. and SUBSIDIARIES
 
 
 2006
    
    
    2005(Restated)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    100,849
    
    
    $
    708,616Accounts receivable, net of allowance for doubtful accounts of
$14,219 and $6,720, respectively (Note 2)
    
    
    47,145
    
    
    
    53,832Prepaid expenses and other
    
    
    33,667
    
    
    
    54,066Total Current Assets
    
    
    181,661
    
    
    
    816,514Communications equipment and related assets, net of accumulated
depreciation of $1,463,027 and $1,502,559, respectively
    
    
    220,397
    
    
    
    352,740Other assets, net of amortization of $976,794 and $951,634 respectively
    
    
    11,820
    
    
    
    36,543Other assets
    
    
    23,356
    
    
    
    27,828$
    437,234
    
    
    $
    1,233,625LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    46,181
    
    
    $
    39,716Accrued expenses
    
    
    115,326
    
    
    
    200,639Customer deposits
    
    
    400
    
    
    
    400Total Current Liabilities
    
    
    161,907
    
    
    
    240,755Deferred stock compensation
    
    
    23,735
    
    
    
    Commitments and Contingencies (Note 10)
    
    
    
    
    
    
    Stockholders EquityPreferred stock, $0.01 par value, 1,000,000 shares authorized,
none
Issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 20,000,000 shares authorized,
4,483,802 shares issued and outstanding at December 31,
2006 and 4,375,119 shares issued and outstanding at
December 31, 2005
    
    
    44,838
    
    
    
    43,751Additional paid-in capital
    
    
    3,686,922
    
    
    
    3,668,850Retained deficit
    
    
    (3,480,168
    )
    
    
    (2,719,731
    )Total Stockholders Equity
    
    
    251,592
    
    
    
    992,870$
    437,234
    
    
    $
    1,233,625
  F-3




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##### Table of Contents



CHAMPION COMMUNICATION SERVICES, INC. and SUBSIDIARIES
 
 
 2006
    
    
    2005(Restated)RevenuesDispatch communications
    
    $
    1,105,718
    
    
    $
    1,345,458Equipment sales and service
    
    
    69,206
    
    
    
    44,186Spectrum sales and fees
    
    
    11,405
    
    
    
    10,000Total Revenues
    
    
    1,186,329
    
    
    
    1,399,644Operating expenses:Cost of sales:Dispatch communications
    
    
    872,119
    
    
    
    857,937Equipment sales and service
    
    
    4,586
    
    
    
    32,812Spectrum sales and fees
    
    
    
    
    
    
    Total Cost of Sales
    
    
    876,705
    
    
    
    890,749Gross Margin
    
    
    309,624
    
    
    
    508,895Bad debt expense
    
    
    (281
    )
    
    
    19,200Depreciation and amortization
    
    
    162,562
    
    
    
    223,033General and administrative expenses
    
    
    912,421
    
    
    
    1,308,734Net (gain) loss on disposal/sale of fixed and other assets
    
    
    4,677
    
    
    
    (403
    )Operating income (loss)
    
    
    ( 769,755
    )
    
    
    (1,041,669
    )Other income (expenses):Interest income
    
    
    9,453
    
    
    
    23,212Interest expense
    
    
    (135
    )
    
    
    (874
    )Loss from continuing operations
    
    
    (760,437
    )
    
    
    (1,019,331
    )Gain on sale of discontinued operations
    
    
    
    
    
    
    1,144,529Income (loss) before income taxes
    
    
    (760,437
    )
    
    
    125,198Net income (loss)
    
    $
    (760,437
    )
    
    $
    125,198Weighted average common shares outstanding
    
    
    4,479,675
    
    
    
    4,384,214Diluted weighted average common shares outstanding
    
    
    4,496,339
    
    
    
    4,391,922Basic earnings (loss) per share:net income (loss)
    
    $
    (0.17
    )
    
    $
    0.03net income/gain on discontinued operations
    
    $
    
    
    
    $
    0.26net loss from continuing operations
    
    $
    (0.17
    )
    
    $
    (0.23
    )Diluted earnings (loss) per share:net income (loss)
    
    $
    (0.17
    )
    
    $
    0.03net income/gain on discontinued operations
    
    $
    
    
    
    $
    0.26net loss from continuing operations
    
    $
    (0.17
    )
    
    $
    (0.23
    )
  F-4




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##### Table of Contents



CHAMPION COMMUNICATION SERVICES, INC. and SUBSIDIARIES
 
 
 Additional
    
    
    Retained
    
    
    TotalCommon stock
    
    
    Common
    
    
    paid-in
    
    
    earnings
    
    
    stockholdersshares
    
    
    stock
    
    
    capital
    
    
    (deficit)
    
    
    equityBalance at December 31, 2004
    
    
    4,217,007
    
    
    $
    42,170
    
    
    $
    3,654,635
    
    
    $
    (2,844,929
    )
    
    $
    851,876Purchase of common stock
    
    
    (61,700
    )
    
    
    (617
    )
    
    
    (18,006
    )
    
    
    
    
    
    
    (18,623
    )Contribution of common stock
to Company 401(k) Plan
    
    
    370,411
    
    
    
    3,704
    
    
    
    70,378
    
    
    
    
    
    
    
    74,082Retirement of common stock to
Company 401(k) Plan
    
    
    (150,599
    )
    
    
    (1,506
    )
    
    
    (38,157
    )
    
    
    
    
    
    
    (39,663
    )Net income for 2005 (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,198
    
    
    
    125,198Balance at December 31, 2005
(restated)
    
    
    4,375,119
    
    
    
    43,751
    
    
    
    3,668,850
    
    
    
    (2,719,731
    )
    
    
    992,870Purchase of common stock
    
    
    (106,722
    )
    
    
    (1,067
    )
    
    
    (31,471
    )
    
    
    
    
    
    
    (32,538
    )Contribution of common stock
to Company 401(k) Plan
    
    
    215,405
    
    
    
    2,154
    
    
    
    49,543
    
    
    
    
    
    
    
    51,697Net loss for 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (760,437
    )
    
    
    (760,437
    )Balance at December 31, 2006
    
    
    4,483,802
    
    
    $
    44,838
    
    
    $
    3,686,922
    
    
    $
    (3,480,168
    )
    
    $
    251,592
  F-5




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##### Table of Contents



CHAMPION COMMUNICATION SERVICES, INC. and SUBSIDIARIES
 
 
 2006
    
    
    2005(Restated)Cash flows from operating activities:Net income (loss)
    
    $
    (760,437
    )
    
    $
    125,198Adjustments to reconcile net income (loss) to
net cash used in operating activities:Change in restricted cash
    
    
    
    
    
    
    Depreciation and amortization
    
    
    162,562
    
    
    
    223,033(Gain) loss on disposal/sale of fixed and other assets
    
    
    4,677
    
    
    
    (1,144,932
    )Bad debt expense
    
    
    14,800
    
    
    
    19,200Deposits
    
    
    
    
    
    
    2,848Loss on impairment of intangibles
    
    
    
    
    
    
    Change in assets and liabilities:Accounts receivable
    
    
    (8,113
    )
    
    
    (24,746
    )Note receivable
    
    
    
    
    
    
    Refundable income taxes
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    Prepaid expenses
    
    
    20,400
    
    
    
    8,390Accounts payable
    
    
    6,463
    
    
    
    (35,594
    )Accrued expenses
    
    
    (9,881
    )
    
    
    (3,479
    )License sales and customer deposits
    
    
    
    
    
    
    Other assets
    
    
    4,035
    
    
    
    (4,116
    )Net cash used in operating activities
    
    
    (565,494
    )
    
    
    (834,198
    )Cash flows from investing activities:Purchases of fixed and other assets
    
    
    (10,036
    )
    
    
    (16,071
    )Proceeds from sale of fixed and other assets
    
    
    301
    
    
    
    1,234,056Net cash provided by (used in) investing activities
    
    
    (9,735
    )
    
    
    1,217,985Cash flows from financing activities:Repayment of notes payable
    
    
    
    
    
    
    Purchase of treasury stock, net of issuances
    
    
    (32,538
    )
    
    
    (58,287
    )Net cash used in financing activities
    
    
    (32,538
    )
    
    
    (58,287
    )Increase (decrease) in cash and cash equivalents
    
    
    (607,767
    )
    
    
    325,500Cash and cash equivalents at beginning of year
    
    
    708,616
    
    
    
    383,116Cash and cash equivalents at end of year
    
    $
    100,849
    
    
    $
    708,616Supplemental disclosure of cash flow information:Cash paid (refunded) during the year for:Interest
    
    $
    135
    
    
    $
    874Non-cash transactions:Issuance of common stock for accrued expenses
    
    $
    51,697
    
    
    $
    74,082
  F-6




---



##### Table of Contents



Summary of Significant Accounting Policies
              F-7




---



##### Table of Contents



(1)
    
    Summary of Significant Accounting Policies, (continued)
               F-8




---



##### Table of Contents



Summary of Significant Accounting Policies
      Accounts Receivable and Allowance for Doubtful Accounts
   Concentration of Credit Risk
  Communication Equipment, Related Assets, Intangible Assets and Assets Held for Sale
  December 31, 2006Asset
    
    
    
    
    
    
    Accumulated
    
    
    NetLife
    
    
    Cost
    
    
    Depreciation
    
    
    BalanceCommunication
equipment and
related assets:Base station and
related equipment
    
    
    5 to 10 years
    
    
    $
    1,411,930
    
    
    $
    1,200,747
    
    
    $
    211,183Other furniture,
data processing and
communications
equipment
    
    
    2 to 5 years
    
    
    
    271,495
    
    
    
    262,281
    
    
    
    9,214$
    1,683,425
    
    
    $
    1,463,028
    
    
    $
    220,397
 F-9




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##### Table of Contents



Communication Equipment, Related Assets, Intangible Assets and Assets Held for Sale
(continued)
 December 31, 2005Asset
    
    
    
    
    
    
    Accumulated
    
    
    NetLife
    
    
    Cost
    
    
    Depreciation
    
    
    BalanceBase station and
related equipment
    
    
    5 to 10 years
    
    
    $
    1,517,349
    
    
    $
    1,188,174
    
    
    $
    329,175Other furniture,
data processing and
communications
equipment
    
    
    2 to 5 years
    
    
    
    337,950
    
    
    
    314,385
    
    
    
    23,565$
    1,855,299
    
    
    $
    1,502,559
    
    
    $
    352,740
 December 31, 2006Asset
    
    
    
    
    
    
    Accumulated
    
    
    NetLife
    
    
    Cost
    
    
    Amortization
    
    
    BalanceIntangible assets:Licenses and other
intangible assets
    
    
    5 to 10 years
    
    
    $
    988,613
    
    
    $
    976,794
    
    
    $
    11,819
 December 31, 2005Asset
    
    
    
    
    
    
    Accumulated
    
    
    NetLife
    
    
    Cost
    
    
    Amortization
    
    
    BalanceLicenses and other
intangible assets
    
    
    5 to 10 years
    
    
    $
    988,177
    
    
    $
    951,634
    
    
    $
    36,543
   Income Taxes
  2006
    
    
    2005Federal Income Tax Benefit
    
    $
    
    
    
    $
    State Income Tax Benefit
    
    
    
    
    
    
    Net Income Tax Benefit
    
    $
    
    
    
    $
    
  F-10




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##### Table of Contents



Income Taxes (continued)
   2006
    
    
    2005Deferred tax assets
    
    $
    260,000
    
    
    $
    260,000Less: valuation allowance
    
    
    260,000
    
    
    
    260,000Net deferred tax asset
    
    $
    
    
    
    $
    
 Stockholders Equity
   Stock Options
   2005Net income, as reported
    
    $
    140,291Add: Total stock-based employee compensation
expense determined under intrinsic value based
method for all awards
    
    
    Deduct: Total stock-based
employee compensation expense determined under fair value based method for all awards, net of
related tax effects
    
    
    (15,093
    )Restated net income
    
    $
    125,198Net income per share, basic and diluted
    
    $
    0.03As reportedRestated
    
    $
    0.03
 F-11




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##### Table of Contents



Stock Options (continued)
      WeightedAverageNumber
    
    Weighted
    
    Remaining
    
    Number
    
    WeightedRange of
    
    Outstanding
    
    Average
    
    Contracted
    
    Exercisable
    
    AverageExercise
    
    at
    
    Exercise
    
    Life
    
    at
    
    ExercisePrice
    
    12/31/06
    
    Price
    
    (Years)
    
    12/31/06
    
    Price$0.38
    
    
    20,000
    
    
    $
    0.38
    
    
    
    8.57
    
    
    
    20,000
    
    
    $
    0.380.18
    
    
    20,000
    
    
    
    0.18
    
    
    
    8.31
    
    
    
    20,000
    
    
    
    0.180.23
    
    
    56,000
    
    
    
    0.23
    
    
    
    7.76
    
    
    
    42,000
    
    
    
    0.230.29
    
    
    20,000
    
    
    
    0.29
    
    
    
    7.52
    
    
    
    20,000
    
    
    
    0.290.35
    
    
    6,000
    
    
    
    0.35
    
    
    
    6.79
    
    
    
    6,000
    
    
    
    0.350.38
    
    
    20,000
    
    
    
    0.38
    
    
    
    7.01
    
    
    
    20,000
    
    
    
    0.380.50
    
    
    1,500
    
    
    
    0.50
    
    
    
    3.00
    
    
    
    1,500
    
    
    
    0.500.51
    
    
    20,000
    
    
    
    0.51
    
    
    
    6.50
    
    
    
    20,000
    
    
    
    0.510.55
    
    
    25,000
    
    
    
    0.55
    
    
    
    5.07
    
    
    
    25,000
    
    
    
    0.55
 F-12




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##### Table of Contents



WeightedAverageNumber
    
    Weighted
    
    Remaining
    
    Number
    
    WeightedRange of
    
    Outstanding
    
    Average
    
    Contracted
    
    Exercisable
    
    AverageExercise
    
    at
    
    Exercise
    
    Life
    
    at
    
    ExercisePrice
    
    12/31/06
    
    Price
    
    (Years)
    
    12/31/06
    
    Price0.56
    
    
    2,000
    
    
    
    0.56
    
    
    
    4.01
    
    
    
    2,000
    
    
    
    0.560.57
    
    
    100,000
    
    
    
    0.57
    
    
    
    6.26
    
    
    
    100,000
    
    
    
    0.570.60
    
    
    20,000
    
    
    
    0.60
    
    
    
    6.01
    
    
    
    20,000
    
    
    
    0.600.63
    
    
    20,000
    
    
    
    0.63
    
    
    
    5.31
    
    
    
    20,000
    
    
    
    0.630.64
    
    
    10,000
    
    
    
    0.64
    
    
    
    5.00
    
    
    
    10,000
    
    
    
    0.640.88
    
    
    50,000
    
    
    
    0.88
    
    
    
    2.29
    
    
    
    50,000
    
    
    
    0.881.00
    
    
    1,500
    
    
    
    1.00
    
    
    
    2.00
    
    
    
    1,500
    
    
    
    1.001.00
    
    
    20,000
    
    
    
    1.00
    
    
    
    1.88
    
    
    
    20,000
    
    
    
    1.001.25
    
    
    1,500
    
    
    
    1.25
    
    
    
    1.00
    
    
    
    1,500
    
    
    
    1.252.22
    
    
    12,000
    
    
    
    2.22
    
    
    
    0.10
    
    
    
    12,000
    
    
    
    2.22$018-$2.22
    
    
    425,500
    
    
    
    $0.58
    
    
    
    4.97
    
    
    
    411,500
    
    
    
    $0.59
 Number of
    
    Weighted-averageOptions
    
    exercise priceBalance at December 2004
    
    
    430,000
    
    
    
    0.67Granted
    
    
    40,000
    
    
    
    0.28Forfeited
    
    
    (23,000
    )
    
    
    0.46Balance at December 2005
    
    
    447,000
    
    
    
    0.65Granted
    
    
    
    
    
    
    Forfeited
    
    
    (21,500
    )
    
    
    2.25Balance at December 2006
    
    
    425,500
    
    
    
    $0.58
 401(k) Plan
  Related Party Transactions
  F-13




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##### Table of Contents



Commitments and Contingencies
 Lease Commitments
  2007
    
    
    489,3502008
    
    
    278,8662009
    
    
    79,9492010
    
    
    5,559$
    853,724
  Legal Proceedings
  Segment Reporting
   United States
    
    
    International
    
    
    ConsolidatedDecember 31, 2006Revenues
    
    $
    1,123,270
    
    
    $
    63,059
    
    
    $
    1,186,329Pretax (loss)
    
    
    (642,754
    )
    
    
    (117,683
    )
    
    
    (760,437
    )Depreciation /Amortization
    
    
    157,939
    
    
    
    4,623
    
    
    
    162,562InterestRevenue
    
    
    9,453
    
    
    
    
    
    
    
    9,453Expense
    
    
    (135
    )
    
    
    
    
    
    
    (135
    )Net
    
    
    9,318
    
    
    
    
    
    
    
    9,318Total assets
    
    
    413,095
    
    
    
    24,139
    
    
    
    437,234December 31, 2005Revenues
    
    $
    1,363,731
    
    
    $
    35,913
    
    
    $
    1,399,644Pretax income (loss) (restated)
    
    
    441,190
    
    
    
    (315,992
    )
    
    
    125,198Depreciation /Amortization
    
    
    211,599
    
    
    
    11,434
    
    
    
    223,033Discontinued operations
    
    
    
    
    
    
    
    
    
    
    InterestRevenue
    
    
    23,212
    
    
    
    
    
    
    
    23,212Expense
    
    
    (874
    )
    
    
    
    
    
    
    (874
    )Net
    
    
    22,338
    
    
    
    
    
    
    
    22,338Total assets
    
    
    1,195,520
    
    
    
    38,105
    
    
    
    1,233,625
 F-14




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##### Table of Contents



Major Vendors
  Going Concern
   Subsequent Events
   2006Base station and related
equipment
    
    $
    199,046Licenses
    
    
    11,819Other intangibles
    
    
    Total assets held for sale
    
    $
    210,865
  F-15




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##### Table of Contents



Exhibit Index
 Incorporated byNumber
    
    Description
    
    Reference to3.1
    
    Certificate of Incorporation filed
September 29, 1994.
    
    Exhibit 3.1 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)3.2
    
    Certificate of Amendment to
Certificate of Incorporation filed
January 26, 1996.
    
    Exhibit 3.2 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)3.3
    
    Certificate of Amendment to
Certificate of Incorporation filed
April 23, 1996.
    
    Exhibit 3.3 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)3.4
    
    By-laws dated September 29, 1994.
    
    Exhibit 3.4 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)3.5
    
    Amended and Restated By-laws, as
adopted January 23, 2002.
    
    Exhibit 99.2 of the
Companys Current
Report on Form 8-K
filed February 6,
2002 (File No.
001-12565)4.1
    
    Specimen Common Stock share
certificate.
    
    Exhibit 4.1 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)4.2
    
    Pages from Certificate of
Incorporation and By-laws defining
rights of stockholders -included in
Exhibits 3.1, 3.2, 3.3 and 3.4.
    
    Exhibit 4.2 to the
Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)10.1
    
    Form of Indemnification Agreement
between officers and director of the
Company and the Company.
    
    Exhibit 10.27 to
the Registration
Statement on Form
10-SB effective
February 13, 1997
(File No. 0-29032)10.3
    
    Lease Agreement dated January 1,
2000, between Woodlands office
Equities 95 Limited and the Company.
    
    Exhibit 10.30 to
the 10-KSB filed
March 30, 2000
(File No. 001
-12565)




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##### Table of Contents



Incorporated byNumber
    
    Description
    
    Reference to10.4*
    
    Lease Amendment
dated November 10,
2005 between
Woodstead-Grogan
Operating
Associates, L.P.
and the Company10.5
    
    Master Antenna Site
Lease No. 130 dated
February 1 , 1999
between Pinnacle
Towers, Inc. and
the Company
    
    Exhibit 10.50 to the 10-KSB
filed March 31,
2003 (File No. 001-12565)10.6**
    
    Commission
Agreement dated
July 1, 2004,
between Richmond
Holdings, Inc. and
the Company
    
    Exhibit 10.6 to the 10-KSB filed April 1, 2005
(File No. 001-12565)10.7
    
    Asset Purchase
Agreement, dated
December 30, 2004
between ESP
Wireless Technology
Group, Inc. and the
Company
    
    Exhibit 10.7 to the 10-KSB filed April 1, 2005
(File No. 001-12565)10.8
    
    Asset Purchase
Agreement, dated
February 13, 2007,
between Fleet TALK
Partners, Ltd. and
the Company
    
    Exhibit 10.1 to the 8-K filed February 20, 200710.9
    
    Management
Agreement, dated
February 13, 2007
between Fleet TALK
Partners Ltd and
the Company
    
    Exhibit 10.2 to the 8-K filed February 20, 200710.10**
    
    Deferred
Compensation
Agreement, dated
October 4, 2006
between Albert F.
Richmond and the
Company
    
    Exhibit 10.1 to the Form 10-QSB
filed November 14, 200610.11*
    
    Commission
Agreement Amendment
dated July 1, 2006
between Richmond
Holdings, Inc. and
the Company21
    
    Subsidiaries
    
    Exhibit 21 to the 10-KSB filed April 1, 2005
(File No. 001-12565)24.1
    
    Power of Attorney
(included on
signature page)31.1*
    
    Certification of
the Chief Executive
Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act
of 2002.31.2*
    
    Certification of
the Chief Financial
Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act of 200232.1*
    
    Certification of
the Chief Executive
Officer and Chief
Financial Officer
Pursuant to 1 8
U.S.C. Section
1350, Adopted
Pursuant to Section
906 of the
Sarbanes-Oxley Act
of 2002
 
 *
    
    Filed herewith.**
    
    Management contract or executive compensation plan or arrangement.