**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





**x**  **ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE**  **SECURITIES
      EXCHANGE ACT OF 1934**




**For
      the fiscal year ended** **December
      31, 2006**




**o**  **TRANSITION
      REPORT UNDER SECTION 13 OR 15(D) OF THE**  **SECURITIES
      EXCHANGE ACT OF 1934**




**For
      the Transition Period from __________ to __________**





**Commission
      File No. 0-21931**





**Wi-Tron,
      Inc.**


**(Name
      of Small Business Issuer in Its Charter)**





**Delaware**
            **22-3440510****(State
                or Other
                Jurisdiction**
              **of
                Incorporation or
                Organization)z**
            **(I.R.S.
                Employer**
              **Identification
                No.)****59
                LaGrange Street**,**Raritan,
                New Jersey**
            **08869****(Address
                of Principal Executive
                Offices)**
            **(Zip
                Code)**




**Issuer’s
      telephone number, including area code: (908) 253-6870**




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




**Securities
      registered pursuant to Section 12 (g) of the Act:** **Common
      Stock**




**(Title
      of Class)**




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.   o




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




Check
      if
      there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
      S-B contained in this form, and no disclosure will be contained, to the best
      of
      registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB.  o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule12b-2
      of the Exchange Act). o




Issuer’s
      revenues for its most recent fiscal year were $154,309




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of computed by reference to the closing price of such stock
      as of
      March 31, 2007, was approximately $2,276,006.




The
      number of shares outstanding of the issuer's common stock as of May 16, 2007
      was
      50,028,293




Documents
      Incorporated by Reference: None




Transitional
      Small Business Disclosure Format   Yes
o  No
x










**FORWARD
      LOOKING STATEMENTS**





This
      Annual Report and any documents incorporated herein by reference, if any,
      contain forward-looking statements that have been made within the meaning of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
      Securities Exchange Act of 1934, as amended. These forward-looking statements
      refer to our business, financial condition and prospects that reflect our
      management’s assumptions and beliefs based on information currently available.
      We can give no assurance that the expectations indicated by such forward-looking
      statements will be realized. If any of our assumptions should prove incorrect,
      or if any of the risks and uncertainties underlying such expectations should
      materialize, our actual results may differ materially from those indicated
      by
      the forward-looking statements.





There
      may
      be other risks and circumstances that management may be unable to predict.
      When
      used in this Report, words such as, *“believes,”
      “expects,” “intends,” “plans,” “anticipates,” “estimates”* and
      similar expressions are intended to identify and qualify forward-looking
      statements, although there may be certain forward-looking statements not
      accompanied by such expressions.




**PART
      I**





**Item
      1.**   **Description
      of Business**





GENERAL
      INFORMATION ABOUT WI-TRON





Wi-Tron’s
      Mission is to become a world leader in ultra-linear, high-value power amplifier
      technology products for wireless telecommunication infrastructure providers
      by
      anticipating and exceeding their needs and expectations, while providing high
      profit margins to the Company.





Background:
      The Company was incorporated on December 14, 1995 as Amplidyne Inc. and renamed
      Wi-Tron, Inc in August 2005. Since that time Wi-Tron has been reorganizing
      its
      operational structure and making management changes. The company is led by
      its
      CEO and Chairman John Lee. The company has retained Joe Nordgaard as a Business
      Development Consultant.





Wi-Tron
      has 15 proven product designs for Radio Frequency Amplifiers, Wi-Max Amplifiers,
      Wi-Fi Solutions and Wireless Repeaters; patents in Analog Pre-Distortion
      techniques and 15 years experience in custom RF amplifier design and
      manufacturing.





HISTORY
      OF THE RF AMPLIFIER INDUSTRY




Until
      about 2003, large telecom equipment manufacturers such as Ericsson, Motorola,
      Nortel and Lucent Technologies maintained comprehensive R&D departments to
      design and manufactured their own RF amplifiers. This was effective, but
      expensive and consequently they cut back much of their R&D capabilities to
      streamline operations and reduce costs. As a result, the industry became more
      standardized, but telecom service providers now have increased their reliance
      on
      outsourced design, manufacturing and solutions.





This
      outsourcing shift, coupled with the rapid growth in the cellular industry,
      caused rapid growth of the RF amplifier industry. The two largest US
      manufacturers, Powerwave Inc. and Andrews Corp., dominate the RF amplifier
      industry’s cutting-edge technologies development, which represents the highest
      profit margins in the industry. The rest of the industry is serviced by dozens
      of small companies around the world, who tend to focus on lower technology
      solutions and lower profit margins. Companies of any size that show R&D
      prowess are quickly acquired by the industry giants so they retain the most
      advanced technologies available.




2





***This*** outsourcing and acquisition trend has led amplifier and component designs toward
      increased complexity and technical sophistication in the form of complete RF
      Subsystems. However, there are still major problems in the form of power and
      signal inefficiencies that the major companies are not solving sufficiently.
      Much of Wi-Tron’s future success is based on solving these problems.





PLANS
      FOR
      IMPROVING RESULTS OF OPERATIONS




At
      Wi-Tron, Inc., we are taking advantage of many opportunities in the wireless
      industry by developing state-of-the-art RF amplifier technology for the second,
      third and fourth generation wireless telecommunications systems. We are
      developing advanced RF amplifier designs that significantly increase power
      and
      frequency efficiency and resolve key issues relating to the ever increasing
      need
      for more complex broadband, multi-channel solutions. We continue to build our
      R&D team to capitalize on these opportunities, where both the greatest
      demand and the greatest opportunity to gain market-share with high margin
      solutions exist.





Initially,
      Wi Tron will work to increase sales of RF amplifiers while simultaneously
      developing cutting edge technological designs for near and long term sales
      growth. Wi-Tron intends to build partnership and marketing strengths from a
      series of design platforms, some of which have already have been developed,
      in
      order to expand our market opportunities across technologies, frequency bands
      and power ranges.





Our
      strategy is to develop, manufacture and sell the most advanced amplifier
      products in the world, which could give Wi-Tron a lead time to market advantage
      against the largest names in the industry. Wi Tron’s new amplifiers are energy
      efficient, have wide bandwidth and digital clarity, with embedded intellectual
      property protection. These products are in great demand by wireless service
      providers and equipment vendors around the world. Wi-Tron’s products will save
      energy costs, while providing high speed data, video and streaming video
      transmissions, with high voice quality to wireless customers around the world.
      There are additional savings to service providers each Wi-Tron amplifier can
      do
      the workload of several older amplifiers.





We
      have
      developed new amplifier products for the wireless communications market. Our
      sales and marketing efforts are focused on Latin America, Asia, Europe and
      U.S.
      markets. We plan to establish “Wi-Tron China” to accelerate our penetration of
      the Chinese market and to manage our outsourced manufacturing operations in
      China





We
      intend
      to refine our products as needed and in a timely fashion in order to obtain
      market share.





*High
      Quality, Reliability and Customer Support.* We
      believe that the power amplifier in cell sites historically has been the single
      most common point of equipment failure in wireless telecommunications networks.
      Increasingly reliable power amplifiers, therefore, will improve the level of
      service offered by wireless service providers, while reducing their operating
      costs. In addition, MCLPA eliminate the need for high-maintenance; tunable
      cavity filters that should further reduce costs.





We
      work
      closely with our customers throughout the design process in refining and
      developing their amplifier specifications. We use the latest equipment and
      computer aided design and modeling, solid-state device physics, advanced digital
      signal processing, and digital control systems, in developing our products.
      The
      integration of our design and production is a factor in our ability to provide
      our customers with high reliability, low distortion and low maintenance
      amplifiers.




3





**Technology**





*Wireless
      Transmit Technology* .
      A
      typical wireless communications system comprises a geographic region containing
      a number of cells, each with a base station, which are networked to form a
      service provider's coverage area. Each base station or cell site houses the
      equipment that transmits and receives telephone calls to and from the cellular
      subscriber within the cell and the switching office of the local wire line
      telephone system. Such equipment includes a series of transceivers, power
      amplifiers, tunable cavity filters and an antenna. In a single channel system,
      each channel requires a separate transceiver, power amplifier and tunable cavity
      filter. The power amplifier within the base station receives a relatively weak
      signal from the transceiver and significantly boosts the power of the outgoing
      wireless signal so that it can be broadcast throughout the cell. The radio
      power
      levels necessary to transmit the signal over the required range must be achieved
      without distorting the modulation characteristics of the signal. The signal
      must
      also be amplified with linearity in order to remain in the assigned channel
      with
      low distortion or interference with adjacent channels.





Because
      cellular operators are allocated a small RF spectrum and certain channels,
      it is
      necessary to make efficient use of the spectrum to enable optimum system
      capacity. By amplifying all channels with minimum distortion at the same time,
      rather than inefficient use of single channel amplification, one obtains better
      system capacity. A MCLPA combines the performance capabilities of many single
      carrier amplifiers into one unit, eliminating the need for numerous single
      carrier amplifiers and their corresponding tunable cavity filters. These MCLPA
      require less space than multiple single channel amplifiers and their
      corresponding tunable cavity filters, which reduce the size and cost of a base
      station.





MCLPA
      create distortion products, which can cause adjacent channel interference.
      The
      minimization of these distortion products requires sophisticated technology.
      This is accomplished through interference cancellation techniques such as "pre
      distortion" and "feed forward" accompanied by highly advanced control and
      processing technology. We have developed certain proprietary technology and
      methods to achieve minimal distortion in our amplifiers, technically called
      pre
      distortion and feed- forward correction. We use three distinct technologies
      (1)
      linear class A and AB amplifiers, (2) pre distorted class A and AB amplifiers
      and (3) pre distortion feed-forward amplifiers. Our proprietary leading edge
      products contain patented pre distortion and proprietary feed-forward technology
      combined in a proprietary automatic correction technique.





All
      amplifiers create distortion when they are run at a high power level. In an
      ideal case the output of the amplifier would faithfully reproduce the input
      signal without any distortion. In real life, however, distortion characteristics
      are produced. These distortion products can cause interference with another
      caller’s channel, which in turn produces poor call quality. By using a simple,
      patented technology, we recreate the distortion for the amplifier in such a
      manner to cancel the interference signals.





Feed-forward
      cancellation involves taking the distortion created by the amplifier and
      processing it in such a way that when it is added back into the amplifier having
      been pre-distorted and combined with the feed forward technology, distortion
      cancellation occurs. We believe that our patented technology has the most unique
      and potent technology for distortion cancellation. Furthermore, we have selected
      linear class AB technology for our base amplifier which we believe also has
      superior distortion characteristics compared to other competitors because it
      is
      easier to pre-distort. Thus the three key ingredients (1) linear class A and
      AB
      amplifiers, (2) pre distortion technology and (c) feed-forward technology enable
      us to produce MCLPA for our major OEM customers.





**Markets**





The
      market for wireless communications services has grown substantially during
      the
      past decade as cellular wireless local loop, 3G and other new and emerging
      applications (such as W-CDMA) have become increasingly accessible and affordable
      to growing numbers of consumers.




4




*Cellular
      Market.* The
      market for cellular communications still accounts for a fairly large portion
      of
      the wireless services. The general downturn in this segment decreased demand
      for
      amplifier products during 2004 and 2005.





*Wireless
      Local Loop* */W-Max* *.* Wireless
      local loop and Wi-Max systems are increasingly being adopted in developing
      markets to more quickly implement telephone and Data communication services.
      In
      certain developing countries, wireless local loop and Wi-Max systems provide
      an
      attractive alternative to copper and fiber optic cable based systems, with
      the
      potential to be implemented more quickly and at lower cost than wire line
      telephone systems. The Company designs, manufactures and markets MCLPA and
      single channel amplifiers for infrastructure equipment systems in the wireless
      local loop and Wi-Max market in the 2 and 3.5 GHz bands.




*Custom
      Communications and Other Markets* .
      The
      custom communications market consists of small niche segments within the larger
      communications market:long-haul radio communications, land mobile
      communications, surveillance communications, ground-to-air communications,
      microwave communications, broadband communications and telemetry tracking.
      The
      Company sells custom amplifiers and related products to these
      segments.





**Products**





We
      design
      and sell multi-carrier transmit amplifiers and low noise receive amplifiers
      for
      the cellular communications market, as well as the PCS and wireless local loop
      segments of the wireless communications industry. We also provide a large number
      of catalog and custom amplifiers to OEMs and to other customers in the
      communications market in general.





**Multicarrier
      Linear Power Amplifiers (MCLPA).** When a
      cellular or PCS user places a call, the call is processed through a base
      station, amplified, and then transmitted on to the person receiving the call.
      Therefore, all base stations require amplifiers (MCLPA) whether they are being
      used for cellular, PCS or 3G (third generation) local loop applications. We
      design and manufacture these amplifiers. The objective is to provide a quality
      product at a good price and to have exemplary reliability. Management believes
      that our products with patented pre-distortion technology, core linear amplifier
      technology, and proprietary feed-forward technology, achieve all of the
      objectives mentioned above. Our MCLPA are a unique line of ultra linear devices,
      which utilize a proprietary pre-distortion and phase locked feed forward
      architecture.





**High
      Power Linear Amplifiers.** Our
      product line of linear amplifiers have a high third-order intercept point,
      which
      translates to better call quality. These high power amplifiers are supplied
      as
      modules or plug in enclosures. The communication bands available are NMT-450,
      AMPS, TACS, ETACS, 3G and PCS. The output power ranges from 1 to 200 Watts.
      These amplifiers can be used in instances where service providers only need
      a
      single transmit channel.





**W-CDMA
      Amplifier Development.** In
      2005/6, we completed the development of a wide band 80W MCLPA with Digital
      Signal Processing technology and Wi-Max Products.





**Local
      Loop and Wi-Max Amplifiers** .
      Local
      loop and Wi-Max amplifiers are designed with a proprietary circuit to achieve
      a
      high linearity, which translates to better call quality through the mini cell.
      These amplifiers can be ordered as modules or in a rack
      configuration.





**Low
      Noise Amplifiers, Cellular, PCS, GSM, W-CDMA and WI-MAX** amplifiers are manufactured with a mix of silicon, LDMOS and GaAsFET devices.
      These amplifiers offer the user the lowest noise and the highest intercept
      point, while maintaining good efficiency. Received calls at a base station
      are
      low in level due to the fact that hand held cellular phones typically operate
      at
      half a watt power level. This weak signal has to be amplified clearly which
      is
      done by using our low noise amplifier. All amplifiers undergo a 72-hour burn-in
      period to ensure reliable filed operation.




5





**Communication
      Amplifiers** .
      These
      amplifiers are designed for cellular and PCN/PCS applications and use GaAs
      or
      Silicon Bipolar FET devices. The transmit amplifiers are optimized for low
      distortion products. Custom configurations are available for all communication
      amplifiers. This line of products is aimed at the single channel base station
      users employing the digital cellular standards (CDMA, 3G and TDMA).





Our
      wireless telecommunications amplifiers can be configured as modules separate
      plug-in amplifier units or integrated subsystems. Our products are integrated
      into systems by OEM customers, and therefore must be engineered to be compatible
      with industry standards and with certain customer specifications, such as
      frequency, power, linearity and built-in test (BIT) for automatic fault
      diagnostics.





***Product
      Warranty***





We
      warranty new products against defects in materials and workmanship generally
      for
      a period of one (1) year from the date of shipment. To date, we have not
      experienced a material amount of warranty claims.





***Backlog/Future
      Orders***





We
      regularly review our backlog (which includes projected future orders from
      customers) that we expect to ship over the next 12 months. We have had to change
      schedules and delay orders depending on customer needs. Customer schedules
      or
      requirements may frequently change and in some cases result in cancellation
      of
      orders, in response to which the Company has to change its production schedule.
      Changes and cancellations exist since, among other matters, the wireless
      communications industry is characterized by rapid technological change, new
      product development, product obsolescence and evolving industry standards.
      In
      addition, restructuring of the company resulted in low activity during most
      of
      2005 and 2006. This uncertainty may lead to postponement or cancellation of
      future or current orders. In addition, as technology changes, corporations
      are
      frequently requested to update and provide new prototypes in accordance with new
      specifications if products become obsolete or inferior. Therefore, we have
      been
      focusing on strategic partnerships to provide better quality solutions to our
      partners with higher margin sales opportunities.





The
      Company has no significant backlog of orders. In the present state of the
      telecommunications industry there is a reluctance of companies to commit to
      large blanket orders. We expect to see this trend, of just in time orders,
      to
      continue during 2007. The Company would like to stress, although useful for
      scheduling production, backlog as of any particular date may not be a reliable
      indicator of sales for any future period.





***Customers,
      Sales & Marketing***





*Customers.* The
      Company markets its products worldwide generally to wireless communications
      manufacturers (OEMs) and communications system operators. The table below
      indicates net revenues derived from customers in the Company’s markets in 2006
      and 2005.




6





**Net
      Revenues By Market Categories**


**(In
      thousands)**




**Year
                Ended**
              ******December 31,********Amplifier
                Markets**
            
            **2006**
            
            **2005**Wireless
                Telephony
            
            $
            154
            
            $
            471Satellite
                Communications, Custom and other Products





*  *Wireless
      Telephony.* Sales to
      the wireless telephone segments of the wireless communications industry
      decreased from approximately $471,000 in 2005 to $154,000 in 2006.





*  *Wireless
      Internet and Broadband solutions.* The
      Company decided not to pursue this business in 2005





*  *International
      Sales.* Sales
      of
      wireless products outside the United States accounted for 88% of sales in 2006.





*  *Sales
      and Marketing.* The
      Company’s officers and sales and marketing consultants maintain significant
      contact with potential prospects and key customers, ensuring close technical
      liaison with customer engineers and purchasing managers.





**Competition**





***Amplifier
      Products***





Our
      ability to compete successfully and operate profitably depends in part upon
      the
      rate of which OEM customers incorporate our products into their systems. We
      believe that a substantial majority of the present worldwide production of
      power
      amplifiers is captive within the manufacturing operations of a small number
      of
      wireless telecommunications OEMs and offered for sale as part of their wireless
      telecommunications systems. Our future success is dependent upon the extent
      to
      which these OEMs elect to purchase from outside sources rather than manufacture
      their own amplification products. There can be no assurance that OEM customers
      will incorporate our products into their systems or that in general OEM
      customers will continue to rely, or expand their reliance, on external sources
      of supply for their power amplification products. Since each OEM product
      involves a separate proposal by the amplifier supplier, there can be no
      assurance that our current OEM customers will not rely upon internal production
      capabilities or a non-captive competitor for future amplifier product needs.
      Our
      OEM customers continuously evaluate whether to manufacture their own
      amplification products or purchase them from outside sources. These OEM
      customers are large manufacturers of wireless telecommunications equipment
      who
      could elect to enter the non-captive market and compete directly with us. Such
      increased competition could materially adversely affect our business, financial
      condition and results of operations.





Certain
      of our competitors have substantially greater technical, financial, sales and
      marketing, distribution and other resources, and have greater name recognition
      and market acceptance of their products and technologies. In addition, certain
      of these competitors are already established in the wireless amplification
      market, but we believe we can compete with them effectively. No assurance can
      be
      given that our competitors will not develop new technologies or enhancements
      to
      existing products or introduce new products that will offer superior price
      or
      performance features. To the extent that OEMs increase their reliance on
      external sources for their power amplification needs more competitors could
      be
      attracted to the market.




7





We
      expect
      our competitors to offer new and existing products at prices necessary to gain
      or retain market share. We expect to experience significant price competition,
      which could have a materially adverse effect on gross margins. Certain of our
      competitors have substantial financial resources, which may enable them to
      withstand sustained price competition or downturns in the power amplification
      market. Currently, we compete primarily with non-captive suppliers of power
      amplification products. We believe that our competition, and ultimately our
      success, will be based primarily upon service, pricing, reputation and the
      ability to meet the delivery schedules of our customers. During 2005, we
      operated under severe cash flow circumstances, which restricted our sales and
      marketing efforts.





**Manufacturing**





We
      assemble, test, package, and ship products at our manufacturing facilities
      located in Raritan, New Jersey. This facility includes a separate assembly
      and
      test facility for various custom products.





Our
      manufacturing process consists of purchasing components, assembling and testing
      components and subassemblies, integrating the subassemblies into a final product
      and testing the product. Our amplifiers consist of a variety of subassemblies
      and components which we designed or specified, including housings, harnesses,
      cables, packaged RF power transistors, integrated circuits and printed circuit
      boards. Most of these components are manufactured by others and are shipped
      to
      us for final assembly. Each of our products receives extensive in process and
      final quality inspections and tests.





Our
      devices, components and other electrical and mechanical subcomponents are
      generally purchased from multiple suppliers. We do not have any written
      agreement with any of our suppliers. We have followed a general policy of
      multiple sourcing for most of our suppliers in order to assure a continuous
      flow
      of such supplies. However, we purchase certain transistors produced by a single
      manufacturer because of the high quality of its components. We believe it is
      unlikely that such transistors would become unavailable, however, if that were
      to occur, there are multiple manufacturers of generally comparable transistors.
      We believe that the distributors of such transistors maintain adequate inventory
      levels, which would mitigate any adverse effect on our production in the event
      unavailability or shortage of such transistors. If for any reason, we could
      not
      obtain comparable replacement transistors or could not return its products
      to
      operate with the replacement transistors, our business, financial condition
      and
      results of operations could be adversely affected.





We
      currently utilize discrete circuit technology on printed circuit boards that
      we
      design and are provided by suppliers to our specifications. All transistors
      and
      other semiconductor devices are purchased in sealed packages ready for assembly
      and testing. Others also manufacture other components such as resistors,
      capacitors, connectors or mechanical supported subassemblies. Components are
      ordered from suppliers under master purchase orders with deliveries timed to
      meet our production schedules. As a result, we maintain a low inventory of
      components, which could result in delay in production in the event of delays
      in
      such deliveries.





We
      purchased automated surface mount machinery to enhance our manufacturing ability
      for amplifiers as well as wireless internet products, which was installed during
      the first quarter of 2000. The equipment has provided improved efficiency in
      production and faster turn around for certain products.





**Research,
      Engineering and Development**





We
      research, engineering and development efforts are focused on the design of
      amplifiers for new protocols, the improvement of existing product performance,
      cost reductions and improvements in the manufacturability of existing products.





We
      have
      historically devoted a significant portion of its resources to research,
      engineering and development programs. Our research, engineering and development
      expenses in fiscal 2006 and 2005 were approximately $338,000 and $552,000,
      respectively, and represented approximately 219% and 117% respectively, of
      net
      revenues. These efforts were primarily dedicated to the development of the
      linear feed forward, high power, low distortion amplifiers, resulting in our
      models for 3G W-CDMA  and
      Wi-Max.




8





During
      most of 2006, we spent substantial sums to refine our 3G 80W W-CDMA amplifier
      and develop Wi-Max RF amplifier products..





We
      use
      the latest equipment and computer aided design and modeling, solid-state device
      physics, advanced digital signal processing and digital control systems, in
      the
      development of our products in the specialized engineering and research
      departments.





We
      use a
      CAD environment employing networked workstations to model and test new circuits.
      This design environment, together with our experience in interference
      cancellation technology and modular product architecture, allows us to rapidly
      define, develop and deliver new and enhanced products and subsystems sought
      by
      our customers.





The
      markets in which the Company and OEM customers compete are characterized by
      rapidly changing technology, evolving industry standards and continuous
      improvements in products and services.





**Patents,
      Proprietary Technology and Other Intellectual Property**





Our
      ability to compete successfully and achieve future revenue growth will depend,
      in part, on our ability to protect proprietary technology and operate without
      infringing the rights of others. We have a policy of seeking patents, when
      appropriate, on inventions resulting from its ongoing research and development
      and manufacturing activities.





Presently,
      we have been granted a patent (No. 5,606,286) by the United States Patent and
      Trademark Office with respect to its Pre-Distortion and Pre-Distortion
      Linearization technology which, we believe, is more effective in reducing
      distortion then other currently available technology. There can be no assurance
      that our patent will not be challenged or circumvented by competitors.





Notwithstanding
      our active pursuit of patent protection, we believe that the success of our
      amplifier business depends more on its specifications, CAE/CAD design and
      modeling tools, technical processes and employee expertise than on patent
      protection. We generally enter into confidentiality and non-disclosure
      agreements with its employees and limits access to and distribution of its
      proprietary technology. We may in the future be notified that it is infringing
      certain patent and/or other intellectual property rights of others. Although
      there are no such pending lawsuits against us or unresolved notices that we
      are
      infringing intellectual property rights of others, there can be no assurance
      that litigation or infringement claims will not occur in the future.





**Governmental
      Regulations**





Our
      customers must obtain regulatory approval to operate their base stations. The
      United States Federal Communications Commission ("FCC") has regulations that
      impose more stringent RF and microwave emissions standards on the
      telecommunications industry. There can be no assurance that our customers will
      comply with such regulations, which could materially adversely affect our
      business, financial condition and results of operations. We manufacture our
      products according to specifications provided by our customers, which
      specifications are given to comply with applicable regulations. We do not
      believe that costs involved with manufacturing to meet specifications will
      have
      a material impact on its operations. There can be no assurances that the
      adoption of future regulations would not have a material adverse affect on
      us.





**Employees**





As
      of May
      16, 2007, we had a total of 12 full-time employees: 2 in operations, 7 in
      engineering and 3 in administration. We employ one consultant in sales and
      marketing and one in engineering. We believe our future performance will depend
      in large part on our ability to retain highly skilled employees. None of our
      employees are represented by a labor union and we have not experienced any
      work
      stoppages. We consider our employee relations to be good. ****




9





**Environmental
      Regulations**





We
      are
      subject to Federal, state and local governmental regulations relating to the
      storage, discharge, handling, emissions, generation, manufacture and disposal
      of
      toxic or other hazardous substances used to manufacture our products. We believe
      that we are currently in compliance in all material respects with such
      regulations. Failure to comply with current or future regulations could result
      in the imposition of substantial fines, suspension of production, alteration
      of
      its manufacturing process, cessation of operations or other actions which could
      materially and adversely affect our business, financial condition and results
      of
      operations.




10


**In
      addition to other information in this Annual Report, the following important
      factors should be carefully considered in evaluating us and our business,
      because such factors currently have a significant impact on the Company’s
      business, prospects, financial condition and results of
      operations.**





**RISK
      FACTORS**





You
      should carefully consider the risks described below before investing in our
      company. The risks and uncertainties described below are not the only ones
      facing our company. Other risks and uncertainties that we have not predicted
      or
      assessed may also adversely affect our company.





Some
      of
      the information in this Annual Report contains forward-looking statements that
      involve substantial risks and uncertainties. You can identify these statements
      by forward-looking words such as “may,” “will,” “expect,” “anticipate,”
“believe,’ “intend,” “estimate,” and “continue” or other similar words. You
      should read statements that contain these words carefully for the following
      reasons:





·
            the
                statements may discuss our future
                expectations;





·
            the
                statements may contain projections of our future earnings or of our
                financial condition; and





·
            the
                statements may state other “forward-looking”
                information.




We
      believe it is important to communicate our expectations to our investors. There
      may be events in the future, however, that we are not accurately able to predict
      or over which we have no control. The risk factors listed below, as well as
      any
      cautionary language in or incorporated by reference into this Annual Report,
      provide examples of risks, uncertainties and events that may cause our actual
      results to differ materially from the expectations we describe in our
      forward-looking statements. Before you invest in our company, you should be
      aware that the occurrence of any of the events described in the risk factors
      below, elsewhere in or incorporated by reference into this Annual Report and
      other events that we have not predicted or assessed could have a material
      adverse effect on our earnings, financial condition or business. In such case,
      the trading price of our securities could decline and you may lose all or part
      of your investment.





**We
      have a recent history of losses and expect losses to
      continue.**





We
      have
      incurred net losses of $1,891,235 and $1,318,735 for the years ended December
      31, 2006 and 2005, respectively. These losses were due primarily to
      substantially reduced sales, against which our cost-cutting efforts have yielded
      minimal results. We are expecting increased sales for amplifier products to
      compensate for the expenses, however we have reduced staff levels, therefore
      there is no guarantee that this will happen. Reduced demand for our products
      by
      our key customer has reduced our sales significantly. With our reduced staff
      levels, we may not be able to compete. Further, we have not generated sufficient
      sales volume to cover our overhead costs and generate profits. We have minimized
      losses by staff reduction; this could result in loss of market share from which
      we may not be able to recover. We expect that our losses will increase and
      will
      continue until such time, if ever, as we are able to successfully manufacture
      and market our products on a larger scale and therefore generate higher profit
      margins. We will need to generate a substantial increase in revenues to become
      profitable. Accordingly, we cannot assure you that we will ever become or remain
      profitable. In addition, we had an accumulated deficit of $ 26,838,959 as of
      December 31, 2006.





**We
      have limited cash available, and may not have sufficient cash to continue our
      business operations without the additional financing.**





To
      date,
      we have financed our operations principally through the private placement of
      shares of common stock. Our current burn rate is approximately $150,000 per
      month, and we will require substantial additional financing at various intervals
      for manufacturing, marketing and sales capabilities, our research and
      development programs, and for operating expenses including intellectual property
      protection and enforcement. We may seek additional funding from public or
      private financings, but there is no assurance that such additional funding
      will
      be available on terms acceptable to us, or at all. Accordingly, we may not
      be
      able to secure the significant funding which is required to maintain and
      continue development programs at their current levels or at levels that may
      be
      required in the future. If we cannot secure adequate financing, we may be
      required to delay, scale back or eliminate one or more of its development
      programs or to enter into license or other arrangements with third parties
      to
      commercialize products or technologies. Our auditors have included an
“uncertainty paragraph” in their audit report on our financial statements
      regarding our ability to continue as a going concern.




11





**The
      report from our independent auditors includes an explanatory paragraph regarding
      the doubt that we can continue as a going concern.**





The
      auditors’ report on our financial statements for the year ended December 31,
      2006 and 2005 both include an explanatory paragraph stating that our losses,
      lack of cash and otherwise limited financial resources raise substantial doubt
      about our ability to continue as a going concern. Our ability to continue as
      a
      going concern is subject to our ability to realize a profit and/or obtain
      funding from outside sources. Our plan to address our ability to continue as
      a
      going concern, include: (1) obtaining additional funding from the sale of
      securities; (2) increasing revenues from the sales of our products; and (3)
      obtaining loans and grants from various financial and/or governmental
      institutions, where possible. Although we believe that we will be able to obtain
      the necessary funding to allow us to remain a going concern through the methods
      discussed above, there can be no assurances that such methods will prove
      successful.





**We
      will continue to incur losses and may never achieve
      profitability.**





We
      will
      continue to incur losses as we engage in the development of our products. There
      can be no assurance that we will ever be able to achieve or sustain market
      acceptance, profitability or positive cash flow. Our ultimate success will
      depend on many factors, including whether our amplifier products will be
      successfully marketed and accepted by the marketplace. Even with additional
      capital, we may not be able to execute our current business plan and fund
      business operations long enough to achieve positive cash flow. Furthermore,
      we
      may be forced to reduce our expenses and cash expenditures to a material extent,
      which would impair our ability to execute our business plan.





**Our
      success relies upon the growth of wireless telecommunications services.**





The
      demand for our products will depend in large part upon continued and growing
      demand within the wireless telecommunications industry for power amplifiers.
      During 2006 restructuring of our business resulted in low activity and recovery
      of our business has been slow, therefore the demand for our products will remain
      subject to great uncertainty from quarter to quarter.





**Our
      lack of automated manufacturing processes and our dependence on third party
      manufacturers could adversely affect our business.**





We
      have
      consistently reviewed our automated manufacturing needs in order to control
      our
      production schedule. To date, we have not established a fully automated
      manufacturing facility although we have purchased an automated surface mount
      machine and reflow process oven. Our wireless internet products are manufactured
      at offshore facilities, which are our sole suppliers. Until such time as we
      are
      able to establish such facilities, we expect to be dependent on third party
      manufacturers. We cannot be sure that these third party manufacturers will
      be
      able to fulfill our production commitment. Furthermore, we do not have written
      agreements with these manufacturers. Our inability to obtain timely deliveries
      of acceptable assemblies could delay our ability to deliver products to our
      customers, and would have a material adverse effect on our business, financial
      condition and results of operations. In addition, if these manufacturers
      increase their production costs, we may not be able to recover such cost
      increases under the fixed price commitments with our customers.




**Our
      limited number of suppliers could adversely affect our
      business.**





Power
      transistors and certain other key components used in our products for our
      amplifiers are currently available from only a limited number of suppliers.
      Certain of our suppliers have limited operating histories and limited financial
      and other resources. Our suppliers may prove to be unreliable sources of certain
      components. Furthermore, we have no written agreements with our suppliers.
      In
      the past, we have not purchased key components in large volumes but anticipate
      that our need for component parts will increase. If we are unable to obtain
      sufficient quantities of components, particularly power transistors, we could
      experience delays or reductions in product shipments. Such delays or reductions
      could have a material adverse effect on our business, financial condition and
      results of operations. Additionally, such delays or reductions may have a
      material adverse effect on our relationships with customers and result in the
      termination of existing orders and/or a permanent loss in our future sales.
      Our
      wireless internet products are manufactured at offshore facilities. The lack
      of
      supply from this source due to any reason could adversely impact our business.




12





**Our
      success will rely on our ability to enter into strategic
      partnerships.**





We
      are
      currently developing and expect to continue to develop strategic partnerships
      and other relationships in order to expand our business. The failure to
      successfully develop such relationships could have a material adverse effect
      on
      our business, financial condition and result of operations.





**Our
      success relies on a small number of customers.**





In
      2006,
      4 customers accounted for 96% of our sales and 3 customers accounted for 100%
      of
      our accounts receivable. We anticipate that sales of our products to relatively
      few customers will account for a majority of our 2007 revenues. The reduction,
      delay or cancellation of orders from one or more of our significant customers
      would materially and adversely affect our financial condition and results of
      operation. Moreover, we may experience significant fluctuations in net sales,
      gross margins and operating results in the future as a result of the uncertainty
      of such sales.





**Our
      limited marketing experience may adversely affect our
      business.**





We
      are
      not sure whether our marketing efforts will be successful or that we will be
      able to maintain competitive sales and distribution capabilities.





**Our
      management owns a significant amount of our outstanding common
      stock.**





Our
      officers, directors and persons who may be deemed our affiliates beneficially
      own, in the aggregate, and have the right to vote approximately 58% of our
      issued and outstanding common stock, not including common stock options they
      may
      own. In 2005, control shifted to John Chase Lee, our president and CEO, who
      loaned us $650,000 in connection with a Note Purchase Agreement. In settlement
      of these loans, Mr. Lee was issued 131,000 shares of our Series C Convertible
      Preferred Stock, which is convertible at any time into 13,100,000 shares of
      common stock. As of May 16, 2007, Mr. Lee had converted all of his preferred
      shares into common stock. As a result, Mr. Lee holds approximately 28% of our
      outstanding voting stock on a fully diluted basis. Accordingly, Mr. Lee and
      other affiliates may be in a position to affect the election of all of our
      directors and control the company.





**Our
      compliance with the Sarbanes-Oxley Act and SEC rules concerning internal
      controls may be time consuming, difficult and costly.**





It
      may be
      costly, difficult, and time consuming for us to develop and implement the
      internal controls and reporting procedures required by the Sarbanes-Oxley Act.
      We may need to hire additional financial reporting, internal controls and other
      finance personnel in order to develop and implement appropriate internal
      controls and reporting procedures. If we are unable to comply with the internal
      controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain
      the independent accountant certifications required by the Sarbanes-Oxley
      Act.




13





**Our
      success depends on our ability to manage the size of our
      operations.**





We
      downsized some of our operations in order to maintain competitiveness and reduce
      our operating losses. We have also explored joint ventures and mergers in order
      to achieve these results, but have not consummated any such transaction. If
      we
      do not increase our sales, decrease overhead expenditure or do not adequately
      manage the size of our operations, our results of operations will be materially
      adversely affected.





**Declining
      average sales prices could adversely affect our business.**





If
      wireless internet and telecommunications customers come under increasing price
      pressure from service providers, we could expect to experience downward pricing
      pressure on our products. In addition, competition among non-captive amplifier
      suppliers could increase the downward pricing pressure on our amplifier
      products. To date, we have not experienced such pressure. As our customers
      frequently negotiate supply arrangements with us far in advance of product
      delivery dates, we often must commit to price reductions before we can determine
      whether cost reductions can be obtained. If we are unable to achieve cost
      reductions, our gross margins will decline and our business, financial condition
      and results of operations could be materially and adversely
      affected.





**Rapid
      technological change and intense competition could adversely affect our
      business.**





The
      wireless telecommunications equipment industry is extremely competitive and
      is
      characterized by rapid technological change, new product development, product
      obsolescence and evolving industry standards. In addition, price competition
      in
      this market is intense and characterized by significant price erosion over
      the
      life of a product. Currently, we compete primarily with non-captive suppliers
      of
      power amplification products. We believe that our success will be based
      primarily upon service, pricing, reputation, and our ability to meet product
      delivery schedules. Our existing and potential customers continuously evaluate
      whether to manufacture their own amplification products or to purchase such
      products from outside sources. These customers and other large manufacturers
      of
      wireless telecommunications equipment could elect to enter the market and
      compete directly with us. Many of our competitors have significantly greater
      financial, technical, manufacturing, sales and marketing capabilities and
      research and development personnel and other resources than us and have achieved
      greater name recognition of their existing products and technologies. In order
      for us to successfully compete, we must continue to develop new products, keep
      pace with advancing technologies and competitive innovations and successfully
      market our products. Our inability to successfully compete against our larger
      competitors will have a materially adverse affect on our business, financial
      condition and operations.





In
      addition, we are not sure whether new products or alternative technology will
      render our current or planned products obsolete or inferior. Rapid technological
      development by others may result in our products becoming obsolete before we
      recover a significant portion of the research, development and commercialization
      expenses we incurred with respect to those products.





**Our
      business will be adversely affected if we do not keep up with the rapid
      technological change, evolving industry standards and changing user
      requirements.**





To
      be
      successful, we must adapt to our rapidly changing market by continually
      enhancing the technologies used for communications. If we are unable, for
      technical, legal, financial or other reasons, to adapt in a timely manner in
      response to changing market conditions or user requirements, our business could
      be materially adversely affected. Significant issues concerning the commercial
      use of communication technologies, including security, reliability, cost, ease
      of use and quality of service, remain unresolved and may inhibit the growth
      of
      businesses relying on the Internet. Our future success will depend, in part,
      on
      our ability to meet these challenges. Among the most important challenges facing
      us is the need to:





·  effectively
      use established technologies;




·  continue
      to develop our technical expertise; and




·  respond
      to emerging industry standards and other technical changes.




14





All
      of
      these changes must be met in a timely and cost-effective manner. We cannot
      assure you that we will succeed in effectively meeting these challenges and
      our
      failure to do so could materially and adversely affect our
      business.





**Risks
      associated with sales outside of the United States may adversely affect our
      business.**





International
      sales represented approximately 88% and 100% of our net revenues for the years
      ended December 31, 2006 and 2005, respectively. We expect that international
      sales will continue to account for a significant portion of our net revenues
      in
      the future. To the extent that we do not achieve and maintain substantial
      international sales, our business, results of operations and financial condition
      could be materially and adversely affected.





Sales
      of
      our products outside of the United States are denominated in U.S. dollars.
      An
      increase in the value of the U.S. dollar relative to foreign currencies would
      make our products more expensive and, therefore, potentially less competitive
      outside the United States. Additional risks inherent in our sales abroad
      include:





· the
      impact of recessionary environments in economies outside the United
      States;




·  generally
      longer receivables collection periods;




·  unexpected
      changes in regulatory requirements;




·  tariffs
      and other trade barriers;




·  potentially
      adverse tax consequences;




·  reduced
      protection for intellectual property rights in some countries;




·  the
      burdens of complying with a wide variety of foreign laws.





These
      factors may have an adverse effect on our future international sales and,
      consequently, on our business, financial condition and results of
      operations.





**Our
      operating results may vary from quarter to quarter in future periods, and as
      a
      result, our stock price may fluctuate or decline.**





Our
      quarterly operating results may fluctuate significantly in the future due to
      a
      variety of factors that could affect our revenues or our expenses in any
      particular quarter. Factors that may affect our quarterly results
      include:





·  our
      ability to attract and retain customers;




·  development
      of competitive products;




·  the
      short
      term nature of manufacturing and engineering orders to date;




·  unforeseen
      changes in operating expenses;




·  the
      loss
      of key employees; and




·  unexpected
      revenue shortfalls.





A
      substantial portion of our operating expenses is related to personnel costs
      and
      overhead, which we cannot adjust quickly and are therefore relatively fixed
      in
      the short term. Our operating expense levels are based, in significant part,
      on
      our expectations of future revenues on a quarterly basis. If actual revenues
      are
      below our expectations, our results of operations and financial condition would
      be materially and adversely affected because a relatively small amount of our
      costs and expenses are proportionate with revenues in the short
      term.





Due
      to
      all of the foregoing factors and the other risks discussed in this Annual
      Report, it is possible that in some future periods our results of operations
      may
      be below the expectations of investors and public market analysts which may
      cause our stock price to fluctuate or decline.





**We
      are dependent upon management and technical personnel.**





Due
      to
      the specialized nature of our business, we are highly dependent on the continued
      service of, and on our ability to attract and retain, qualified technical and
      marketing personnel, particularly those involved in the development of new
      products and processes and the manufacture and enhancement of our existing
      products. In addition, as part of our team-based sales approach, we dedicate
      specific design engineers to service the requirements of individual customers.
      The loss of any such engineer could adversely affect our ability to obtain
      future purchase orders from the customers to which such engineer was dedicated.
      We have employment or non-competition agreements with most of our current design
      engineers and test technicians. The competition for such personnel is intense,
      and the loss of any such persons, as well as the failure to recruit additional
      key technical personnel in a timely manner, could have a material adverse effect
      on our business, financial condition and results of operations.




15





**We
      rely on the ability to protect proprietary technology; risk of third party
      claims of infringement may affect our business.**





Our
      ability to compete successfully and achieve future revenue growth will depend,
      in part, on our ability to protect proprietary technology and operate without
      infringing upon the rights of others. Although there are no pending lawsuits
      regarding our technology or notices that we are infringing upon intellectual
      property rights of others, litigation or infringement claims may occur in the
      future. Such litigation or claims could result in substantial costs, and
      diversion of resources and could have a material adverse effect on our business,
      financial condition, and results of operations. We generally enter into
      confidentiality and non-disclosure agreements with our employees and limit
      access to and distribution of proprietary information. However, we cannot be
      sure whether such measures will provide adequate protection for our trade
      secrets or other proprietary information, or whether our trade secrets or
      proprietary technology will otherwise become known or independently developed
      by
      our competitors. Our failure to protect proprietary technology could have a
      material adverse effect on our business, financial condition and results of
      operations.





**We
      do not plan to pay dividends on our common stock** .





We
      have
      never paid any dividends on our common stock and do not intend to pay dividends
      on our common stock in the foreseeable future. Any earnings that we may realize
      in the foreseeable future will be retained to finance our growth.





**Governmental
      regulations and environmental regulations can have a large impact on our
      business.**





Our
      customers must obtain regulatory approval to operate their base stations. The
      United States Federal Communications Commission has regulations that impose
      stringent radio frequency and microwave emissions standards on the
      telecommunications industry. Our customers are required to comply with such
      regulations. The failure of our customers to comply with these regulations
      could
      materially adversely affect our business, financial condition and results of
      operations. We manufacture products according to specifications provided by
      our
      customers, which specifications are required to comply with applicable
      regulations. We do not believe that costs involved with manufacturing to meet
      specifications will have a material impact on our operations. We cannot be
      sure
      whether the adoption of future regulations would have a material adverse affect
      on our business.





We
      are
      subject to Federal, state and local governmental regulations relating to the
      storage, discharge, handling, emissions, generation, manufacture and disposal
      of
      toxic or other hazardous substances used to manufacture our products. We believe
      that we are currently in compliance in all material respects with such
      regulations. Failure to comply with current or future regulations could result
      in the imposition of substantial fines on our company, suspension of our
      production, alteration of our manufacturing process, cessation of our operations
      or other actions, which could materially and adversely affect our business,
      financial condition and results of operations.




**Our
      common stock may be considered "a penny stock."**





The
      SEC
      has adopted regulations that generally define "penny stock" to be an equity
      security that has a market price of less than $5.00 per share, subject to
      specific exemptions. This designation requires any broker or dealer selling
      these securities to disclose certain information concerning the transaction,
      obtain a written agreement from the purchaser and determine that the purchaser
      is reasonably suitable to purchase the securities. These rules may restrict
      the
      ability of brokers or dealers to sell our common stock and may affect the
      ability of investors hereunder to sell their shares. In addition, since our
      common stock is traded on the OTC Bulletin Board, investors may find it
      difficult to obtain accurate quotations of the stock and may experience a lack
      of buyers to purchase such stock or a lack of market makers to support the
      stock
      price.




16




**There
      are risks associated with our stock trading on the OTC Bulletin Board rather
      than a national exchange.**





There
      are
      significant consequences associated with our stock trading on the OTC Bulletin
      Board rather than a national exchange. The effects of not being able to list
      our
      securities on a national exchange include:





·
            Limited
                release of the market prices of our
                securities;





·
            Limited
                news coverage of us;





·
            Limited
                interest by investors in our
                securities;





·
            Volatility
                of our stock price due to low trading
                volume;





·
            Increased
                difficulty in selling our securities in certain states due to “blue sky”
                restrictions;





·
            Limited
                ability to issue additional securities or to secure
                financing.





**Anti-takeover
      provisions may adversely affect the value of our outstanding
      securities.**





In
      2005,
      we designated 500,000 shares of Series C Convertible Preferred Stock and issued
      140,000 shares of such stock in settlement of loans. Pursuant to our Certificate
      of Incorporation, our Board of Directors may designate up to 4,500,000
      additional shares of preferred stock in the future with such preferences,
      limitations and relative rights as they may determine without stockholder
      approval. The rights of the holders of our common stock will be subject to,
      and
      may be adversely affected by, the rights of the holders of any preferred stock
      outstanding or that may we may issue in the future. The issuance of preferred
      stock, while providing flexibility in connection with possible acquisitions
      and
      other corporate purposes, could have the effect of delaying or preventing a
      change in control of our company without further action by the stockholders.
      In
      addition, we are subject to the anti-takeover provisions of Section 203 of
      the
      Delaware General Corporation Law. Section 203 prohibits us from engaging in
      a
      "business combination" with an "interested stockholder" for a period of three
      years after the date of the transaction in which the persons became an
      interested stockholder, unless the business combination is approved in a
      prescribed manner. The application of Section 203 also could have the effect
      of
      delaying or preventing a change of control of our company.





**Additional
      authorized shares of common stock and preferred stock available for issuance,
      and shares of common stock issuable upon exercise or conversion of outstanding
      options and warrants may adversely affect the market.**





We
      are
      authorized to issue 100,000,000 shares of our common stock. As of December
      31,
      2006, there were 36,928,293 shares of our common stock issued and outstanding,
      which amount does not include:





(1)  20,000
      exercisable at $.20 through March 2010




(2)  600,000
      exercisable at $.20 through August 2009




(3)  750,000
      exercisable at $.20 through August 2009




(4)  75,000
      exercisable at $.96 through March 2007





As
      of
      December 31, 2006 we had at least 41,926,707 shares of authorized but unissued
      common stock available for issuance without further shareholder approval after
      taking into consideration the following: exercise of the above options and
      warrants totaling 1,445,000 shares, exercise of options granted to our
      securities lawyer of 1,000,000 shares, and conversion of 130,000 preferred
      shares into 13,000,000 common shares. Any issuance of additional shares of
      our
      common stock may cause our current shareholders to suffer significant dilution,
      which may adversely affect the market for our securities.




17





In
      addition, we have 5,000,000 shares of authorized preferred stock. While we
      have
      no present plans to issue any additional shares of preferred stock, our Board
      of
      Directors has the authority, without shareholder approval, to create and issue
      one or more series of such preferred stock and to determine the voting, dividend
      and other rights of holders of such preferred stock. At December 31, 2006,
      we
      had 130,000 shares of Series C Convertible preferred shares outstanding, which
      were issued in 2005 to John C. Lee and a business associate of Lee in full
      payment of convertible promissory notes of $650,000. Additional issuances of
      any
      of our preferred stock could have an adverse effect on the holders of our common
      stock.





**Limitation
      on director liability may adversely affect the value of our common
      stock.**





As
      permitted by Delaware law, our Certificate of Incorporation limits the liability
      of our directors for monetary damages for breach of their fiduciary duty except
      for liability in certain instances. As a result of our charter provision and
      Delaware law, you may have limited rights to recover against our directors
      for
      breach of their fiduciary duty.





**We
      may lose our eligibility for quotation on the OTC Bulletin Board (“OTCBB”) and
      our securities may be removed from the OTCBB.**





On
      April
      18, 2007, the National Association of Securities dealers (“NASD”) notified us
      that because we were delinquent in our filing of this Form 10-KSB for the year
      ended December 31, 2007; our securities would be removed from quotation on
      the
      OTCBB effective May 22, 2007 unless this form is filed by 5:30 p.m. E.S.T.
      on
      May 18, 2007. We also expect that our Form 10-QSB for the quarter ended March
      31, 2007 will be filed late. If our 10-QSB is filed late as expected we would
      have two delinquencies this year and within the past 24 month period. OTCBB
      rules provide that an OTCBB issuer that is delinquent three times in a 24 month
      period will be ineligible for OTCBB quotation for a period of one year.
      Accordingly, if we are delinquent again after this past quarter, we may become
      ineligible for OTCBB quotation for a period of one year which will severely
      limit the marketability of our common stock.




18


**Item
      2.**   **Description
      of Property** **.**





The
      Company leases from a Tek, Ltd., company wholly owned by John C. Lee,
      approximately 11,000 square feet, at 59 LaGrange Street, Raritan, NJ 08869,
      which serves as the Company's executive offices and manufacturing facility. On
      April
      22, 2005, concurrent with the closing of the purchase of the building by Tek,
      the Company entered into a non-cancelable operating lease with Tek which
      commenced on June 1, 2005 and expires on May 31, 2008. Tek is holding a security
      deposit of $5,500 in connection with this lease. The Company is obligated for
      minimum annual rental payments as follows:





Year
                ending December 312007
            
            $
            72,0002008
            
            
            30,000$
            102,000





**Item
      3.**  **Legal
      Proceedings.**





From
      time
      to time, the Company is party to what it believes are routine litigation and
      proceedings that may be considered as part of the ordinary course of its
      business. Except for the proceedings noted below, the Company is not aware
      of
      any pending litigation or proceedings that could have a material effect on
      the
      Company's results of operations or financial condition.





1.  A
      customer filed a complaint in the Circuit Court of the Eighteenth Judicial
      District of the State of Florida on January 23, 1997 alleging breach of
      contract. During 2000, the Company settled with that customer at a cost of
      $175,000; $25,000 is to be paid quarterly over two years. $95,000 remained
      unpaid at December 31, 2006.





2.  In
      April
      2004, a law firm filed a judgment against the Company in the amount of
      approximately $40,000 in connection with non-payment of legal fees owed to
      it.
      Inasmuch as this is a perfection of an already recorded liability, management
      does not believe that the judgment will have a material impact on the financial
      position of the Company. In March 2005, a settlement was reached whereby the
      Company made a down payment of $2,500 and agreed to pay the balance in 24 equal
      monthly installments of approximately $1,600. The last payment made was in
      November 2006 and the Company is in default of the settlement agreement. There
      is a remaing balance of $7,917 as of December 31, 2006.





3.  In
      June
      2004, the Company entered into a Settlement Agreement with Wayne Fogel, et
      al,
      before the United states District court in Tampa, Florida. The settlement
      provided for, among other obligations, issuance of 250,000 shares of restricted
      common stock by July 14, 2004. On November 8, 2005, 250,000 shares were issued
      in connection with this settlement.





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





None




19





**PART
      II**





**Item
      5.**  **Market
      For Common Equity, Related Stockholder Matters and Small Business**


**Issuer**  **Purchases
      of Equity Securities.**





The
      Company's common stock commenced trading on the NASDAQ Small Cap Market on
      January 22, 1997. The common stock was regularly quoted and traded on the NASDAQ
      Small Cap Market under the symbol AMPD, through January 13, 2003. The common
      stock currently trades on the OTC Bulletin Board under the symbol
      WTRO.OB.





The
      following table sets forth the range of high and low closing prices for the
      Company's common stock for fiscal years 2005 and 2004 and for the period of
      January 1, 2006 up to March 31, 2006 as reported by the OTCBB. The trading
      volume of the Company’s securities fluctuates and may be limited during certain
      periods. As a result, the liquidity of an investment in the common stock may
      be
      adversely affected.




Common
                  StockHigh
              
              LowJanuary
                  1 - March 31, 2007
              
              
              .24
              
              
              ..032006
                  Calendar YearJanuary
                  1 - March 31
              
              
              .18
              
              
              .10April
                  1-June 30
              
              
              .44
              
              
              .12July1-September
                  30
              
              
              .38
              
              
              .21October
                  1-December 31
              
              
              .44
              
              
              .262005
                  Calendar YearJanuary
                  1 - March 31
              
              
              .04
              
              
              .02April
                  1-June 30
              
              
              .27
              
              
              .02July1-September
                  30
              
              
              .30
              
              
              .18October
                  1-December 31
              
              
              .20
              
              
              .09


On
      April
      19, 2007, the closing price of the common stock as reported on OTCBB was $.05.
      On May 16, 2007, there were 50,028,293 shares
      of common stock outstanding, held of record by approximately 1,400 record
      holders (not including 5,816,043 shares held in street name).





*Dividends*




We
      have
      not declared or paid a cash dividend to stockholders since our incorporation,
      and have no intention to do so in the future.




*Recent
      Sales of Unregistered Securities*




Sales
      in
      2007 and 2006 not previously reported on a Current Report on Form 8-K, or on
      a
      Quarterly Report on Form 10-QSB.




In
      November 2006, Craig Bird, a holder of 5% of the outstanding common stock,
      and a
      former officer, purchased 200,000 shares of restricted common stock for an
      aggregate purchase price of $40,000.




In
      November 2006, pursuant to a subscription agreement dated September 26, 2006,
      the Company issued 200,000 shares of restricted common stock to Joseph Nordgaard
      (former CEO) for $.20 per share for aggregate gross proceeds of
      $40,000.




Neither
      we nor any person acting on our behalf offered or sold the foregoing securities
      by means of any form of general solicitation or general advertising. All
      purchasers represented in writing that they acquired the securities for their
      own accounts. A resale legend has been provided for the stock certificates
      stating that the securities have not been registered under the Securities Act
      of
      1933 and cannot be resold or otherwise transferred without registration or
      an
      exemption (such as that provided by Rule 144).




20




**Item
      6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF** **FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS.**





***Results
      of Operations - Fiscal Year ended December 31, 2006 compared to Fiscal Year
      ended December 31, 2005.***





Revenues
      for the fiscal year ended December 31, 2006 decreased by $317,177 from $471,487
      to $154,310, or 67% compared to the fiscal year ended December 31, 2005. This
      was due to build up of inventory during the previous year at our previously
      largest customer. The decline is largely represented by the decrease in sales
      to
      our previously largest European customer, which went down to approximately
      $41,000 in 2006 from approximately $354,000 in 2005, a decrease of approximately
      $313,000 or 88%.





The
      majority of the amplifier sales for the year ended December 31, 2006 were
      obtained from the Wireless Local Loop amplifier products to its European
      customer.





The
      Company has continued to develop and refine its amplifier products for the
      wireless communications market. Sales and marketing efforts have been focused
      on
      Asian markets.





Cost
      of
      sales  was
      $398,364 or 258% of sales (including an inventory write-down of $26,237) during
      the year ended December 31, 2006, compared to 133% during the same period for
      2005. Our fixed overhead costs are relatively high for our current sales volume.
      The decline in gross margin was principally due to the lowered production while
      staff levels were maintained in preparation for new product production. The
      Company is continuing to assess cost reduction of its products and sales volume
      increases to improve gross margins in 2006.





Selling,
      general and administrative expenses increased in 2006 by $681,173 to $1,284,384
      from $603,211 in 2005. Expressed as a percentage of sales, the selling, general
      and administrative expenses  (excluding
      stock based compensation) were 832% in 2006 and 128% in 2005. The principal
      factors contributing to the increase in selling, general and administrative
      expenses were related to settlements with an officer and a former officer,
      resulting in additional officer compensation of approximately $385,000.
      Additionally, we issued restricted common stock to our former secretary and
      public relations consultant as payment for approximately $266,000 consulting
      fees in 2006.




Research,
      engineering and development expenses were $337,799 representing 219% of net
      sales in 2006 compared to $552,076 representing 117% of net sales in 2005 Total
      research expendintures decreased $(214,277) or (39)%. In 2006 and 2005, the
      principal activity of the business related to the design and production of
      product for OEM manufacturers, particularly for the W-CDMA amplifier. The
      research, engineering and development expenses consist principally of salary
      cost for engineers and the expenses of equipment purchases specifically for
      the
      design and testing of the prototype products. The Company's research and
      development efforts are influenced by available funds and the level of effort
      required by the engineering staff on customer specific projects. The Company
      used much of the proceeds from private placements to increase its research
      spending to develop and refine its products.





The
      Company had other income in $3,292 in 2006. Other income in 2005 was of $NIL.





The
      Company also sold New Jersey Net operating loss carryforwards pursuant to the
      New Jersey Technology Certificate Transfer Program, receiving $NIL in 2006
      and
      $73,126 in 2005 .




21





Interest
      expense was $18,001 in 2006 and $8,092 in 2005, principally related to $300,000
      of convertible notes issued in private placements in 2005.





As
      a
      result of the foregoing, the Company incurred net losses of $1,891,235 or $0.06
      per share for the year ended December 31, 2006 compared with net
      losses  of
      $1,318,735 or $0.09 per share for the same period in 2005.





***Liquidity
      and Capital Resources***





Liquidity
      refers to our ability to generate adequate amounts of cash to meet our needs.
      We
      have been generating the cash necessary to fund our operations from continual
      loans from the John Lee. We have incurred a loss in each year since inception.
      It is possible that we will incur further losses, that the losses may fluctuate,
      and that such fluctuations may be substantial. As of December 31, 2006, we
      had
      an accumulated deficit  of
      $26,838,959. Potential immediate sources of liquidity are private placements
      of
      common stock.





As
      of
      December 31, 2006, our current liabilities  exceeded
      our cash and receivables by $949,776. Our current ratio was 0.12 to 1.00, but
      our ratio of accounts receivable to current liabilities was only 0.03 to 1.00.
      This indicates that we will have difficulty meeting our obligations as they
      come
      due. We are carrying $94,587 in inventory, of which $26,722 represents component
      parts. Based on last years usage, we are carrying 25 days worth of parts
      inventory **.** Because
      of the lead times in our manufacturing process, we replenish many items before
      we use everything we now have in stock. Accordingly, we will need more cash
      to
      replenish our component parts inventory before we are able realize cash from
      all
      of our existing inventories.





As
      of
      December 31, 2006, we had an overdraft of $(36,140) compared to cash in banks
      of
      $34,998 at December 31, 2005. Overall our cash position declined by $71,138
      during 2006. We have no cash and we are dependent on private placement funds
      to
      cover our working capital needs. Our cash used for operating
      activities  was
      $1,477,593. This year we repaid loans of to officers of
      $76,246.





Because
      of our small number of customers and low sales volume, accounts receivable
      balances and allowances for doubtful accounts do not reflect a consistent
      relationship to sales. We determine our allowance for doubtful accounts based
      on
      a specific customer-by-customer review of collectiblity. We had no allowance
      for
      doubtful accounts in 2006 of 2005.





Our
      inventories decreased by $14,004 to $94,587 in 2006 compared to $108,591 in
      2005, a decrease of 13% We believe that the reasons for the decreased
      inventories was largely due to the $26,237 of write-downs of obsolete parts
      and
      the fact that vendor relations have not allowed us to stock up on parts in
      advance because we are on C.O.D. terms with most vendors.





The
      Company has a lease obligation for its premises requiring minimum monthly
      payments of approximately $5,750 to $6,000 through 2008.





The
      Company continues to explore strategic relationships with customers and others,
      which could involve jointly developed products, revenue-sharing models,
      investments in or by the Company, or other arrangements. There can be no
      assurance that a strategic relationship can be consummated.




22





In
      the
      past, the officers of the Company have deferred a portion of their salaries
      or
      provided loans to the Company
      to meet short-term liquidity requirements. Where possible, the Company has
      issued stock or granted warrants to certain vendors in lieu of cash payments,
      and may do so in the future. There can be no assurance that any additional
      financing will be available to the Company on acceptable terms, or at all.
      If
      adequate funds are not available, the Company may be required to delay, scale
      back or eliminate its research, engineering and development or manufacturing
      programs or obtain funds through arrangements with partners or others that
      may
      require the Company to relinquish rights to certain of its technologies or
      potential products or other assets. Accordingly, the inability to obtain such
      financing could have a material adverse effect on the Company's business,
      financial condition and results of operations.





With
      insufficient cash reserves and reduced revenues, we believe that we will have
      great difficulty meeting our working capital needs over the next 12 months.
      The
      Company is presently dependent on cash flows generated from sales and financing
      from private placements. Our failure to enter into additional private placements
      of securities, consummate a merger with an appropriate partner or to
      substantially improve our revenues will have serious adverse consequences and,
      accordingly, there is substantial doubt in our ability to remain in business
      over the next 12 months. There can be no assurance that any financing will
      be
      available to the Company on acceptable terms, or at all. If adequate funds
      are
      not available, the Company may be required to delay, scale back or eliminate
      its
      research, engineering and development or manufacturing programs or obtain funds
      through arrangements with partners or others that may require the Company to
      relinquish rights to certain of its technologies or potential products or other
      assets. Accordingly, the inability to obtain such financing could have a
      material adverse effect on the Company's business, financial condition and
      results of operations.





***Controls
      and Procedures***





Under
      the
      supervision and with the participation of our management, including the former
      Chief Executive and Principal Accounting officer, we have evaluated the
      effectiveness of the design and operation of our disclosure controls pursuant
      to
      Exchange Act Rule 13a-14(c) as of the end of the period covered by this report.
      Based upon that evaluation, the Chief Executive and Principal Accounting Officer
      concluded that the Company's disclosure controls and procedures are not
      effective in timely alerting him to material information required to be included
      in the Company's periodic SEC filings relating to the Company. There were no
      significant changes in the Company's internal controls or in other factors
      that
      could significantly affect these internal controls subsequent to the date of
      my
      most recent evaluation, although management is working on
      improvements.





Our
      management does not expect that our disclosure controls and internal controls
      will prevent all error and all fraud. A control system, no matter how well
      conceived and operated, can provide only reasonable, not absolute, assurance
      that the objectives of the control system are met. Further, the design of a
      control system must reflect the fact that there are resource constraints, and
      the benefits of controls must be considered relative to their cost. Because
      of
      the inherent limitations in all control systems, no evaluation of controls
      can
      provide absolute assurance that all control issues and instances of fraud within
      the Company, if any, will be detected. These inherent limitations include the
      realities that judgments in decision-making can be faulty, and that a breakdown
      can occur because of a simple error. Additionally, controls can be circumvented
      by the individual acts of some persons, by collusion of two or more people,
      or
      by management override of the control.




23




***Critical
      Accounting Policies*** ******





1.
      REVENUE RECOGNITION





Revenue
      is recognized upon shipment of products to customers because our shipping terms
      are F.O.B. shipping point. And there are generally no rights of return, customer
      acceptance protocols, installation or any other post-shipment obligations.
      All
      of our products are custom built to customer specifications. We provide an
      industry standard one-year limited warranty under which the customer may return
      the defective product for repair or replacement.





Returns
      received under warranty are not material relative to sales, nor are the costs
      to
      repair. All sales are final, except for warranty repair/replacement and there
      is
      no price protection. In addition, the only company post-shipment obligation
      is
      for warranty repair and replacement. Finally, we do not install product or
      provide services for a fee.





2.
      INVENTORIES





Inventories
      are stated at the lower of cost or market; cost is determined using the
      first?in, first?out method. As virtually all of our products are made to
      customer specifications, we do not keep finished goods in stock except for
      completed customer orders that have not been shipped. Our work-in-progress
      generally consists of customer orders that are in the process of manufacture
      but
      are not yet complete at the period end date. We review all of our components
      for
      obsolescence and excess quantities on a periodic basis and make the necessary
      adjustments to net realizable value as deemed necessary.





3.
      ALLOWANCE FOR DOUBTFUL ACCOUNTS




Because
      of our small customer base, we determine our allowance for doubtful accounts
      based on a specific customer-by-customer review of collectiblity. Therefore,
      our
      allowance for doubtful accounts and our provision for doubtful accounts may
      not
      bear a consistent relationship to sales but we believe that this is the most
      accurate and conservative approach under our circumstances.





4.
      USE OF
      ESTIMATES





In
      preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management is required
      to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements and revenues and expenses during the reporting
      period. Actual results could differ from those estimates. The principal areas
      that we use estimates in are: allowance for doubtful accounts; work-in-process
      percentage of completion; accounting for stock based employee compensation;
      and
      inventory net realizable values.




5.
        STOCK-BASED EMPLOYEE COMPENSATION
 
 Effective
        January 1, 2006, the Company adopted the fair value recognition provisions
        of
        SFAS 123(R), using the modified-prospective-transition method. Under that
        transition method, compensation cost recognized in 2006 and beyond includes:
        (a)
        compensation cost for all share-based payments granted prior to, but not
        yet
        vested as of January 1, 2006, based on the grant date fair value estimated
        in
        accordance with the original provisions of SFAS No. 123, and (b) compensation
        cost for all stock-based payments granted subsequent to January 1, 2006,
        based
        on the grant-date fair value estimated in accordance with the provisions
        of SFAS
        123(R). Results for prior periods have not been restated and there is no
        cumulative effect upon adoption of SFAS 123(R).




24


Prior
      to
      adoption of SFAS 123(R) the Company used intrinsic-value method of accounting
      for stock based-awards granted to employees. No stock-based compensation cost
      is
      included in the net loss for the year ended December 31, 2005 as no options
      were
      granted to employees during that period. All stock-based compensation during
      the
      year ended December 31, 2006 was paid in the form of restricted common
      stock.





6.
      LOSS
      PER SHARE





Statement
      of Financial Accounting Standards No.128 (SFAS No. 128), Earnings per Share,
      specifies the computation, presentation and disclosure requirements for earnings
      per share for entities with publicly held common stock or potential common
      stock.





Net
      loss
      per common share - basic and diluted is determined by dividing the net loss
      by
      the weighted average number of shares of common stock outstanding. Net loss
      per
      common share - diluted does not include potential common shares derived from
      stock options and warrants because they are antidilutive.





7.
      SEGMENT INFORMATION





The
      Company commenced its wireless Internet connectivity business in the summer
      of
      2000. The Company does not measure its operating results, assets or liabilities
      by segment. We presented certain segment information representing sales and
      inventories for our amplifier and internet segments. However, this information
      is becoming less relevant as we begin to move away from the internet business
      and concentrate on our core competence, which is in the amplifier
      business.





25





**Item
      7.**  **Financial
      Statements** **.**





See
      financial statements following Item 13 of this Annual Report on Form
      10-KSB.





**Item
      8.**  **Changes
      in and Disagreement With Accountants On Accounting And Financial
      Disclosure** **.**




On
        January 17, 2007, the Registrant's independent auditor KBL, LLP (the "Former
        Accountant") advised the Registrant that it declined to stand for re-election.
        On the same date, the Registrant appointed Moore & Associates, Chartered, as
        its principal accountants.
 The
        decision to change accountants was approved by the Company's board of directors.
        The Company did not consult with Moore & Associates Chartered on any matters
        prior to retaining such firm as its principal accountants.
 
 The
        Former Accountant's audit reports on the financial statements of the Company
        for
        the fiscal years ended December 31, 2005 and December 31, 2004 contained
        no
        adverse opinion or disclaimer of opinion, nor were they qualified or modified
        as
        to uncertainty, audit scope or accounting principles.
 
 During
        the years ended December 31, 2005 and 2004, and through the interim period
        ended
        January 17, 2007, there were no disagreements with the Former Accountant
        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 the Former Accountant would have caused them to make reference
        thereto in their reports on the financial statements for such periods.
 
 During
        the years ended December 31, 2005 and 2004, and through the interim period
        ended
        January 17, 2007, the Former Accountant did not advise the Company with respect
        to any of the matters described in paragraphs (a)(1)(iv)(A) and (B) of Item
        304
        of Regulation S-B, except to advise the Registrant that its internal controls
        necessary to develop reliable financial statements were deficient. The subject
        matter of these reports from the Former Accountant was discussed in detail
        by
        the Board of Directors with the Former Accountant prior to the release of
        the
        financial statements for both of the aforementioned periods. The Registrant
        authorized the Former Accountant to respond fully to the inquiries of the
        successor accountant concerning the subject matter of the Former Accountants'
        comments on internal control deficiencies.





26


**Item
      8a:**  **Controls
      and Procedures** **.**




(a)  Evaluation
      of Disclosure Controls and Procedures:




Management
      is responsible for establishing and maintaining adequate disclosure controls
      and
      procedures.




WI-TRON,
      INC. carried out an evaluation, under the supervision and with the participation
      of the Company's management, including the Company's Chief Executive Officer
      and
      the Chief Financial Officer, of the effectiveness of the Company's disclosure
      controls and procedures pursuant to Exchange Act Rule 13a-15 and 15d-15. Based
      upon that evaluation, the chief Executive and Principal Accounting Officer
      concluded that the Company's disclosure controls and procedures were not
      effective both as of September 30, 2006 and the date of this filing, in timely
      alerting them to material information required to be included in the Company's
      periodic SEC filings relating to the Company. Our conclusions regarding the
      deficiencies appear in the next item.




Our
      controls relating to disclosure and related assertions in the financial
      statements, particularly in the area of non-routine and non-systematic
      transactions were not adequate.




*
            We
                had particular difficulty in recording transactions related to
                stockholders’ equity and tracking and recording related charges to
                operations.




*
            We
                found that our ability to track our inventory quantities and to correctly
                apply complex pricing calculations to finished goods and work-in-progress
                is inadequate and resulted in substantial additional adjustments.
                Furthermore, we discovered that lower of cost or market tests were
                not
                adequately applied.




*
            Although
                we produced our financial statements and Form 10-QSB without outside
                assistance for the current quarter, we believe that we may need to
                engage
                the assistance of a third party financial accounting consulting firm
                as
                our transactions, particularly in the area of stockholders' equity,
                become
                more complex.




(b)  Changes
      in Internal Controls Over Financial Reporting:




We
      have
      made no changes that have materially affected or are likely to materially affect
      our internal controls over financial reporting.




27


**PART
      III**





**Item
      9.**  **Directors,
      Executive Officers, Promoters And Control Persons; Compliance with Section
      16(a)
      of the Exchange Act** **.**





The
      names
      and ages of the directors and executive officers of the Company as of the date
      of this filing are set forth below:





**Name**
            
            **Age**
            
            **Position(s)
                with the Company**John
                Chase Lee*
            
            77
            
            Chief
                Executive Officer, President, and Director.Tarlochan
                Bains*
            
            57
            
            Vice
                President - Amp Division, and DirectorDevendar
                S. Bains
            
            56
            
            Chief
                Technology OfficerMikio
                Tajima
            
            73
            
            Director





*
      Member
      of the Compensation Committee and Audit Committee.





John
      Chase Lee is not related to Jessica Hye Lee or Joong Bin Lee. Jessica Hye Lee
      and Joong Bin Lee are husband and wife. Tarlochan Bains and Devendar S. Bains
      are brothers.




**Background
      of Executive Officers and Directors**





**John
      Chase Lee** has
      served as Chief Executive Officer, President, and a Director since June 2005.
      From September 2004 to June 2005, he served solely as a director. He has served
      as President of Tek, Ltd., a distribution company doing most of its business
      in
      South Korea. Mr. Lee has had many and diverse executive positions and business
      ownership experiences. Mr. Lee has three Masters (M. Div from Princeton
      Seminary, M.A. from U of Oregon, and MCRP from Rutgers University).





**Tarlochan
      Bains** has
      served as Vice President - Amp Division since June 2005. He has served as a
      Director since 1995. From September 2004 to June 2005, Mr. Bains served as
      Chief
      Executive Officer and Treasurer. From March 2000 to September 2004, he served
      as
      Vice President of Operations_. From 1991 through March 2000, he was the
      Company's Vice President of Sales and Marketing. Previously, Mr. Bains was
      Technical Manager at Land Rover in Solihull, England. He has a Higher National
      Diploma in Mechanical Engineering from Hatfield Polytechnic, England and a
      Masters Degree in Automotive Engineering from Cranfield Institute of Technology,
      England. Mr. Bains is the brother of Devendar S. Bains and the brother-in-law
      of
      Nirmal Bains.





**Devendar
      S. Bains** has
      served as Chief Technology Officer since June 2005. Since the Company’s
      inception in 1988, Mr. Bains served as Chairman of the Board, Chief Executive
      Officer, Treasurer and a Director. He was also President of the Company from
      inception through September 2001. From 1983 to 1988 Mr. Bains was Group Project
      Leader of Amplifier division of Microwave Semiconductor Corporation. Previously,
      Mr. Bains was employed at G.E.C. in Coventry, England. Mr. Bains received a
      Bachelors Degree in Electronic Engineering from Sheffield University, England,
      and a Masters Degree in Microwave Communications from the University of Leeds
      and Sheffield, England. Mr. Bains is the brother of Tarlochan Bains and the
      husband of Nirmal Bains.





**Mikio
      Tajima** has
      served as a Director since September 2005. Mr. Tajima held several positions
      with the United Nations, including his last position as Director of Economic
      Policy and Social Development. He received a degree in Economics and
      International Relations both in Japan and UC in Berkeley, CA, and a M.A. from
      Columbia University in International Administration and Organization.





28


***Audit
      Committee***




Mr.
      Lee
      and Tarlochan Bains serve on our audit committee. The committee reviews, among
      other matters, the professional services provided by the Company's independent
      auditors, the independence of such auditors from management of the Company,
      the
      annual financial statements of the Company and the Company's system of internal
      accounting controls. The audit committee also reviews such other matters with
      respect to the accounting, auditing and financial reporting practices and
      procedures of the Company as it may find appropriate or as may be brought to
      its
      attention. The audit committee adopted an audit committee charter in 2002 and
      intends to adopt a new charter, which conforms to the requirements of the
      Sarbanes-Oxley Act of 2002.





Since
      the
      resignation of our former Chief Financial Officer, Jessica Hye Lee, a certified
      public accountant with over 20 years of experience, we no longer have a
      financial expert on the audit committee. The Company is seeking a financial
      expert to replace Ms. Lee, but has not been successful thus far.





The
      audit
      committee has reviewed and discussed the audited financial statements included
      in the Company's Annual Report on Form 10-KSB for the fiscal year ended December
      31, 2006.





For
      the
      year ended December 31, 2006, the Company incurred professional fees to its
      auditors in the amount of $51,152, all of which related to auditing and
      quarterly review services. No non-audit services have been provided to the
      Company by its current auditor.





Each
      non-employee director of the Company is entitled to receive reasonable
      out-of-pocket expenses incurred in attending meetings of the Board of Directors
      of the Company. Directors who are employees of the Company are not paid any
      fees
      or other remuneration for service on the Board or any of the committees. Each
      non-employee director may receive options to purchase Common Stock or other
      remuneration. The members of the Board of Directors intend to meet at least
      quarterly during the Company's fiscal year, and at such other times duly called.





**Compliance
      with Section 16(a) of the Securities Exchange Act of 1934**





Section
      16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires
      the
      Company's directors and executive officers, and persons who own more than ten
      percent (10%) of a registered class of the Company's equity securities, to
      file
      with the Securities and Exchange Commission (the "SEC") initial reports of
      ownership and reports of changes in ownership of common stock and other equity
      securities of the Company. Officers, directors and greater than ten percent
      stockholders are required by SEC regulation to furnish the Company with copies
      of all Section 16(a) forms they file.





To
      the
      Company's knowledge, John Chase Lee and Jessica Hye Lee did not timely file
      reports under Section 16(a). All required reports have since been
      filed.





**Communications
      by Shareholders to Directors**





The
      Company does not have a formal process to handle communications from
      shareholders to directors.





29
 
  **Item
          10.**  **Executive
          Compensation**
 
 **Compensation
          of Directors and Executive Officers**


**Summary
      Compensation Table**





The
      following table sets forth the aggregate compensation paid by the Company for
      the years ended December 31, 2006, 2005and 2004 for its Chief Executive Officer
      and Vice President, respectively. Each non-employee director of the Company
      is
      entitled to receive reasonable out-of-pocket expenses incurred in attending
      meetings of the Board of Directors of the Company.




**Long-Term**
              **Compensation
                Awards****Annual
                Compensation****Name
                and Principal Position**
            
            **Year**
            
            **Salary
                ($)**
            
            **Bonus
                ($)**
            
            **Other
                Annual Compensation**
            
            **Restricted
                Stock Awards**
            
            **Securities
                Underlying Options/ SARS (#)**
            
            **Payouts**
              **LTIP
                Payout**
            
            **All
                Other Comp**John
                C. Lee
            
            
            2006
            
            $
            24,000
            
            
            -Chief
                Executive Officer
            
            
            2005
            
            $
            24,000
            
            
            -And
                DirectorDevendar
                S. Bains,
            
            
            2006
            
            $
            80,000
            
            
            -
            
            $
            15,000
            
            (1)
            
            
            
            
            750,000Chief
                Technology officer
            
            
            2005
            
            $
            121,000
            
            
            -
            
            $
            20,000
            
            (1)2004
            
            $
            140,250
            
            
            -
            
            $
            20,000
            
            (1)Tarlochan
                Bains,
            
            
            2006
            
            $
            80,000
            
            
            
            
            $
            15,000
            
            
            
            500,00
            
            
            500,000Vice
                President
            
            
            2005
            
            $
            90,000
            
            
            
            
            $
            15,000and
                Director
            
            
            2004
            
            $
            100,000
            
            
            
            
            $
            15,000Joseph
                Nordgard
            
            
            2006
            
            $
            70,000
            
            
            
            
            $
            -Former
                Chief Executive Officer




(1)
              Represents
                  payment for health insurance and automobile insurance/lease payments
                  on
                  behalf of such individual but does not include deferred compensation.




30





**Employment
      Agreements**





On
      June
      27, 2005, the Board of Directors resolved to enter into new employment
      agreements with Devendar S. Bains and Tarlochan S. Bains to settle the liability
      for unpaid salaries. In September 2006, that resolution was memorialized in
      employment agreements as follows:





(i)  Devendar
      S. Bains - (employment agreement dated September 1, 2006) in settlement of
      the
      liability for accrued and unpaid salaries, the Company agreed to:




a.
            issue
                a three year warrant for the purchase of 1,000,000 shares common
                stock
                exercisable at $.20 per share (the "Warrant"), with 750,000 remaining
                outstanding at December 31, 2006;


b.
            pay
                the amount of $200,000 in full settlement of the debt due him from
                the
                Company, payable in quarterly installments of $50,000 starting September
                30, 2006 through June 30, 2007, with $150,000 remaining outstanding
                at
                December 31, 2006;


c.
            cancel
                250,000 warrants for each $50,000 quarterly installment paid (250,000
                were
                canceled concurrent with the September 2006
                payment);


d.
            provide
                the right to exercise the warrants periodically in lieu of receiving
                the
                quarterly cash payments;


e.
            offer
                continued employment with the Company for a term of three (3) years
                at a
                salary of $80,000 per year; and


f.
            revert
                to a consulting agreement at a monthly amount of $5,000 for 12 months
                upon
                the payment in full of the $200,000 debt settlement (following the
                last
                $50,000 quarterly payment). As a consultant, the customary benefits
                allowed under his regular employment will be
                retained.





As
      a
      result of the employment agreement with Devendar S. Bains, the face amount
      of
      the loan balance of $345,843 immediately prior to the settlement exceeded the
      minimum cash settlement amount of $200,000 by $145,843. The excess was credited
      to additional paid-in capital. The current value of the warrants (based on
      the
      current trading prices of the underlying common stock) that secure this
      liability is less than the minimum cash settlement amount of $200,000.
      Accordingly, the contribution to additional paid-in capital was measured by
      the
      minimum cash settlement amount of $200,000.





Devendar
      S. Bains beneficially owns 1,050,000 stock options (50,000 of which are owned
      by
      his wife) that have been extended until May 2008, and are otherwise not affected
      by this settlement.





(ii)  Tarlochan
      S. Bains - (employment agreement dated July 1, 2005) in settlement of the
      liability for accrued and unpaid salaries, the Company agreed to (a) issue
      500,000 shares of restricted common stock valued at $185,000, (b) enter into
      an
      employment agreement at $80,000 per year, (c) issue 300,000 incentive stock
      options exercisable at $.20 per share pursuant to the 2005 Plan valued at
      $61,695, and (d) issue 200,000 non-qualified stock options which vest
      immediately and are exercisable at $.20 per share valued at $48,760, with an
      unspecified number of additional options to be issued over the next two years
      at
      exercise prices to be determined by the Board of Directors in accordance with
      the 2005 Plan at the time of issuance. Accordingly, the Company has reflected
      aggregate officer compensation charged to operations of $223,879 (the value
      of
      the shares and options of $274,890 less the face amount of the loan balance
      of
      $51,110).





31




**Stock
      Option Plans and Agreements**





*Option
      Plan -* In May
      1996, the Directors of the Company adopted and the stockholders of the Company
      approved the adoption of the Company's 1996 Stock Option Plan (the "1996 Option
      Plan"). The 1996 Option Plan provided for the issuance of 2,225,000 options.
      The
      purpose of the 1996 Option Plan was to enable the Company to encourage key
      employees and Directors to contribute to the success of the Company by granting
      such employees and Directors incentive stock options ("ISOs") or non-qualified
      stock options ("NQOs").





On
      October 19, 2005, the Company’s stockholders and Directors amended and renewed
      the 1996 Option Plan, designated the 2005 Stock Option Plan (the “2005 Option
      Plan”), which provided for the issuance of up to 5,000,000 options. The 2005
      Option Plan will be administered by the Board of Directors or a committee
      appointed by the Board of Directors (the "Committee") which will determine,
      in
      its discretion, among other things, the recipients of grants, whether a grant
      will consist of ISOs, NQOs or a combination thereof, and the number of shares
      to
      be subject to such options.





The
      2005
      Option Plan provides for the granting of ISOs or NQOs to purchase Common Stock
      at an exercise price to be determined by the Board of Directors or the Committee
      not less than the fair market value of the Common Stock on the date the option
      is granted.





The
      total
      number of shares with respect to which options may be granted under the Option
      Plan is currently 5,000,000. Options may not be granted to an individual to
      the
      extent that in the calendar year in which such options first become exercisable
      the shares subject to such options have a fair market value on the date of
      grant
      in excess of $100,000. No option may be granted under the Option Plan after
      October 2015 and no option may be outstanding for more than ten years after
      its
      grant. Additionally, no option can be granted for more than five (5) years
      to a
      stockholder owning 10% or more of the Company's outstanding Common Stock and
      such options must have an exercise price of not less than 110% of the fair
      market value on the date of grant.





Upon
      the
      exercise of an option, the holder must make payment of the full exercise price.
      Such payment may be made in cash or in shares of Common Stock, or in a
      combination of both. The Company may lend to the holder of an option funds
      sufficient to pay the exercise price, subject to certain
      limitations.





The
      Option Plan may be terminated or amended at any time by the Board of Directors,
      except that, without stockholder approval, the Option Plan may not be amended
      to
      increase the number of shares subject to the Option Plan, change the class
      of
      persons eligible to receive options under the Option Plan or materially increase
      the benefits of participants.





As
      of
      December 31, 2006, 2,850,000 options to purchase Common Stock under the Option
      Plans. The options are exercisable at between $.15 and $0.37 and expire on
      at
      various dates through 2015. No determinations have been made regarding the
      persons to whom options will be granted in the future, the number of shares
      which will be subject to such options or the exercise prices to be fixed with
      respect to any option.




32


*Other
      Options*





On
      January 13, 2006, the Company issued an option to purchase 1,000,000 shares
      of
      common stock at an exercise price of $.20 per share for legal services
      rendered.





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





The
      following table sets forth, as of March 31, 2007, the beneficial ownership
      of
      our common stock (i) by the only persons who are known by us to own beneficially
      more than 5% of our common stock; (ii) by each director and executive officer;
      and (iii) by all directors and officers as a group. Percentage ownership assumes
      all vested warrants and options are fully exercised, and all preferred stock
      is
      converted, and is based on 50,028,293 shares of common stock issued and
      outstanding as of March 31, 2007.


Name
                  and Address of
              
              Shares
                  of Common
              
              PercentageBeneficial
                  Owner*
              
              Stock
                  Owned (1)
              
              OwnershipJohn
                  Chase Lee
              
              
              14,380,632
              (2)
              
              28.7
              %Tarlochan
                  Bains
              
              
              576,726
              
              
              1.2
              %Devendar
                  S. Bains
              
              
              3,212,985
              (3)
              
              4.3
              %Mikio
                  Tajima
              
              
              —
              
              
              —Harris
                  Freedman
              
              
              2,509,525
              (4)
              
              5.0
              %1241
                  Gulf of Mexico Dr.Longboat
                  Key, FL 34228Craig
                  H. Bird
              
              
              7,199,650
              
              
              14.4
              %261
                  Old York Rd. #518Jenkintown,
                  PA 19046All
                  Officers and Directors
              
              
              17,970,343
              
              
              41.7
              %as
                  a Group (6 persons)




*
        Unless
        otherwise indicated, the address of all persons listed in this section is
        c/o
        Wi-Tron, Inc., 59 LaGrange Street, Raritan, NJ 08869




(1)  Beneficial
      ownership is determined in accordance with Rule 13d-3 of the Securities and
      Exchange Commission. Percentages are based on the total number of shares
      outstanding at March 31, 2006, plus the total number of shares underlying
      outstanding options, warrants and preferred stock held by each person that
      are
      exercisable or convertible within 60 days of such date. Shares issuable upon
      exercise of outstanding options and warrants, however, are not deemed
      outstanding for purposes of computing the percentage ownership of any other
      person.





(2)  Represents
      (a) 200,000 shares of common stock held directly by Mr. Lee, (b) 109,400 shares
      of common stock held jointly with Mr. Lee’s spouse, (c) 625,000 shares of common
      stock held by Mr. Lee’s spouse, of which Mr. Lee disclaims beneficial ownership,
      (d) 646,232 shares of common stock held by Axxon Corporation, a company wholly
      owned by Mr. Lee, and (e) 128,000 shares of Series C Convertible Preferred
      Stock, which is convertible into 12,800,000 shares of common stock at any time.
      John Chase Lee is not related to either Jessica Hye Lee or Joong Bin Lee.





33


(3)  Includes
      (a) options to purchase 1,000,000 shares of common stock held by Mr. Bains,
      and
      (b) options to purchase 50,000 shares of common stock within 60 days, and 28,173
      shares of common stock held by Mr. Bains = spouse.





(4)  Represents
      (a) 1,373,901 shares held by Bridge Ventures, Inc., of which Mr. Freedman is
      an
      officer, (b) 927,124 shares held by Annelies Freedman IRA, Mr. Freedman’s
      spouse, and of which Mr. Freedman disclaims beneficial ownership, (c) 86,600
      shares held by Harris Freedman, IRA, (c) 69.900 shares held by SMACS Holding
      Corp., of which Mr. Freedman is an officer, and (d) 52,000 shares held by Mr.
      Freedman individually.





**Item
      12.**  **Certain
      Relationships and Related Transactions and Director
      Independence** **.**





The
      Board’s Audit Committee is responsible for review, approval, or ratification of
“related-person transactions” between the Company or its subsidiaries and
      related persons. Under SEC rules, a related person is a director, officer,
      nominee for director, or 5% stockholder of the Company since the beginning
      of
      the last fiscal year and their immediate family members. The Audit Committee
      determines whether the related person has a material interest in a transaction
      and may approve, ratify, rescind, or take other action with respect to the
      transaction in its discretion.





In
      the
      year ended December 31, 2006, the following related party transactions
      occurred:




In
      November 2006, Craig Bird, a holder of 5% of the outstanding common stock,
      and a
      former officer, purchased 200,000 shares of restricted common stock for an
      aggregate purchase price of $40,000.




In
      November 2006, pursuant to a subscription agreement dated September 26, 2006,
      the Company issued 200,000 shares of restricted common stock to Joseph Nordgaard
      (former CEO) for $.20 per share for aggregate gross proceeds of
      $40,000.




In
      March
      2006, Craig Bird purchased 1,500,000 shares of common stock at $.15 per share
      for gross proceeds of $225,000




In
      March
      2006, Susan Lee, the wife of our CEO John Lee, purchased 625,000 shares at
      $.08
      per share for gross proceeds of $50,000.





In
      May
      2006, Craig Bird purchased 500,000 shares of common stock at $.22 per share
      for
      gross proceeds of $110,000.




Director
      Independence.





Only
      Mikio Tajima, a non-employee director, qualifies as “independent” in accordance
      with the published listing requirements of NASDAQ: Mr. Lee, Tarlochan Bains,
      and
      Devendar Bains do not qualify as independent because they are Wi-Tron employees.
      The NASDAQ rules have both objective tests and a subjective test for determining
      who is an “independent director.” The objective tests state, for example, that a
      director is not considered independent if he is an employee of the Company
      or is
      a partner in or executive officer of an entity to which the Company made, or
      from which the Company received, payments in the current or any of the past
      three fiscal years that exceed 5% of the recipient’s consolidated gross revenue
      for that year. The subjective test states that an independent director must
      be a
      person who lacks a relationship that, in the opinion of the Board, would
      interfere with the exercise of independent judgment in carrying out the
      responsibilities of a director.





34


Mr.
      Tajima is considered “independent” under the objective tests. In assessing
      independence under the subjective test, the Board took into account the
      standards in the objective tests, and reviewed and discussed additional
      information provided by the directors and the Company with regard to each
      director’s business and personal activities as they may relate to the Company
      and its management. Based on all of the foregoing, as required by NASDAQ rules,
      the Board made a subjective determination as to Mr. Tajima that no relationships
      exists which, in the opinion of the Board, would interfere with the exercise
      of
      independent judgment in carrying out the responsibilities of a director. The
      Board has not established categorical standards or guidelines to make these
      subjective determinations, but considers all relevant facts and
      circumstances.





In
      addition to the board-level standards for director independence, the directors
      who serve on the Audit Committee each satisfy standards established by the
      SEC
      providing that to qualify as “independent” for the purposes of membership on
      that Committee, members of audit committees may not accept directly or
      indirectly any consulting, advisory, or other compensatory fee from the Company
      other than their director compensation.





Transactions
      Considered in Independence Determinations.





In
      making
      its independence determinations, the Board considered transactions occurring
      since the beginning of 2004 between the Company, its predecessors, and entities
      associated with the independent directors or members of their immediate family.
      All identified transactions that appear to relate to the Company and a person
      or
      entity with a known connection to a director are presented to the Board for
      consideration. In making its subjective determination that each non-employee
      director is independent, the Board considered the transactions in the context
      of
      the NASDAQ objective standards, the special standards established by the SEC
      for
      members of audit committees, and the SEC and Internal Revenue Service (IRS)
      standards for compensation committee members. In each case, the Board determined
      that, because of the nature of the director’s relationship with the entity
      and/or the amount involved, the relationship did not impair the director’s
      independence.





Indemnification.





The
      Company intends to indemnify its officers and directors to the full extent
      permitted by Delaware law. Under Delaware law, a corporation may indemnify
      its
      agents for expenses and amounts paid in third party actions and, upon court
      approval in derivative actions, if the agents acted in good faith and with
      reasonable care. A majority vote of the Board of Directors, approval of the
      stockholder or court approval is required to effectuate
      indemnification.





Insofar
      as indemnification for liabilities arising under the Securities Act of 1933,
      as
      amended, may be permitted to officers, directors or persons controlling the
      Company, the Company has been advised that, in the opinion of the Securities
      and
      Exchange Commission, such indemnification is against public policy as expressed
      in such Act and is, therefore, unenforceable. In the event that a claim for
      indemnification against such liabilities (other than the payment by the Company
      of expenses incurred or paid by an officer, director or controlling person
      of
      the Company in the successful defense of any action, suit or proceeding) is
      asserted by such officer, director or controlling person in connection with
      the
      securities being registered, the Company will, unless in the opinion of its
      counsel the matter has been settled by controlling precedent, submit to a court
      of appropriate jurisdiction the question whether such indemnification by it
      is
      against public policy as expressed in such Act and will be governed by the
      final
      adjudication of such issue.





Transactions
      between the Company and its officers, directors, employees and affiliates will
      be on terms no less favorable to the Company than can be obtained from
      unaffiliated parties. Any such transactions will be subject to the approval
      of a
      majority of the disinterested members of the Board of Directors.





35


**Item
      13.**  **Exhibits** **.** ****




**(a)
      (1) Financial Statements.**





The
      following financial statements are included in Part II, Item
      7:


PageReport
                  of Independent Certified Public Accountants
              F-2
                  to F-3Financial
                  StatementsBalance
                  Sheets
              F-4
                  to F-5Statements
                  of Operations
              F-6Statement
                  of Stockholders' Deficiency
              F-7Statements
                  of Cash Flows
              F-8
                  to F-9Notes
                  to Financial Statements
              F-10
                  to F-28





**(a)
      (2) Exhibits**


1.1(1)
              Form
                  of Underwriting Agreement1.2(1)
              Form
                  of Selected Dealer Agreement1.3(1)
              Form
                  of Agreement Among Underwriters3.1(1)
              Certificate
                  of Incorporation of the Company3.2(1)
              Certificate
                  of Merger (Delaware)3.3(1)
              Certificate
                  of Merger (New Jersey)3.4(1)
              Agreement
                  and Plan of Merger3.5(1)
              By-Laws
                  of the Company3.6(2)
              Certificate
                  of Designation of Series A Preferred Stock3.7(3)
              Certificate
                  of Amendment to the Certificate of Incorporation4.1(1)
              Specimen
                  Certificate for shares of Common Stock4.2(1)
              Specimen
                  Certificate for Warrants4.3(1)
              Form
                  of Underwriter’s Purchase Option4.4(1)
              Form
                  of Warrant Agreement10.1(1)
              1996
                  Incentive Stock Option Plan10.2(1)
              Employment
                  Agreement between the Company and Devendar S. Bains10.3(1)
              Employment
                  Agreement between the Company and Tarlochan Bains10.4(1)
              Employment
                  Agreement between the Company and Nirmal Bains**10.5**
              Intentionally
                  Omitted10.6
              Intentionally
                  Omitted10.7(1)
              Agreement
                  between the Company and Electronic Marketing Associates,
                  Inc.10.8(1)
              Agreement
                  between the Company and Link Microtek Limited.10.9(1)
              Agreement
                  between the Company and ENS Engineering.10.10(4)
              Settlement
                  Agreement between John Chase Lee and the Company10.11
              2005
                  Stock Option Plan
  36


14
              Code
                  of Ethics31.1
              Certification
                  of Chairman and Chief Executive Officer Pursuant to Section 302
                  of the
                  Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350).31.2
              Certification
                  of Chief Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002 (18 U.S.C. Sec. 1350).32.1
              Written
                  Statement of Chairman and Chief Executive Officer Pursuant to Section
                  906
                  of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                  1350).32.2
              Written
                  Statement of Chief Accounting Officer Pursuant to Section 906 of
                  the
                  Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                  1350).


(1)
            Incorporated
                by Reference to the Company’s Registration Statement on Form SB-2, No.
                333-11015.




(2)
            Incorporated
                by Reference to the Company’s Current Report on Form 8-K filed on August
                3, 1999.




(3)
            Incorporated
                by Reference to the Company’s Current Report on Form 8-K filed on November
                9, 2005.




(4)
            Incorporated
                by Reference to the Company’s Current Report on Form 8-K filed on July 21,
                2005.





37




**WI-TRON,
      INC.**





**INDEX
      TO FINANCIAL STATEMENTS**





PageReport
                of Independent Certified Public Accountants
            
            
            F-2
                to F-3Financial
                StatementsBalance
                Sheets
            
            
            F-4
                to F-5Statements
                of Operations
            
            
            F-6Statement
                of Stockholders' Deficiency
            
            
            F-7Statements
                of Cash Flows
            
            
            F-8
                to F-9Notes
                to Financial Statements
            
            
            F-10
                to F-28





-F1-





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





Board
      of
      Directors and Stockholders


WI-TRON,
      INC.





We
      have
      audited the accompanying balance sheet of Wi-Tron, Inc. as of December 31,
      2006
      and the related statements of operations, stockholders' deficiency, and cash
      flows for the year then ended. These financial statements are the responsibility
      of the Company's management. Our responsibility is to express an opinion on
      these financial statements based on our audit.





We
      conducted our audit in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Wi-Tron, Inc., as of December
      31,
      2006 and the results of its operations and its cash flows for the year 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 discussed in Note A to the financial
      statements, the Company suffered losses from operations, has no cash and
      otherwise limited financial resources, raising substantial doubt about its
      ability to continue as a going concern. Management's plans in regard to these
      matters are also described in Note A. The financial statements do not include
      any adjustments relating to the recoverability and classification of asset
      carrying amounts or the amounts and classifications of liabilities that might
      result should the Company be unable to continue as a going concern.


May 17, 2007
            
            
            MOORE & ASSOCIATES,
              CHARTEREDLas
                Vegas, NV


-F2-





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





Board
      of
      Directors and Stockholders


WI-TRON,
      INC. (F/K/A AMPLIDYNE, INC.)





We
      have
      audited the accompanying balance sheet of Wi-Tron, Inc. as of December 31,
      2005
      and the related statements of operations, stockholders' deficiency, and cash
      flows for the year then ended. These financial statements are the responsibility
      of the Company's management. Our responsibility is to express an opinion on
      these financial statements based on our audits.





We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Wi-Tron, Inc., as of December
      31,
      2006 and 2005, and the results of its operations and its cash flows for the
      years then ended in conformity with accounting principles generally accepted
      in
      the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note A to the financial
      statements, the Company suffered losses from operations, has no cash and
      otherwise limited financial resources, raising substantial doubt about its
      ability to continue as a going concern. Management's plans in regard to these
      matters are also described in Note A. The financial statements do not include
      any adjustments relating to the recoverability and classification of asset
      carrying amounts or the amounts and classifications of liabilities that might
      result should the Company be unable to continue as a going concern.


March
              28,
              2006
            
            
            KBL,
              LLPForest
                Hills, New York


-F3-





**WI-TRON,
      INC.**


**BALANCE
      SHEETS**


**December
      31, 2005**





2006
            
            2005**ASSETS
                - PLEDGED****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            -
            
            $
            34,998Accounts
                receivable, net of allowance for doubtful accounts of$1,000
                and $NIL in 2006 and 2005, respectively
            
            
            25,077
            
            
            21,926Inventories
            
            
            94,587
            
            
            108,591Prepaid
                expenses and other
            
            
            -
            
            
            1,208Total
                current assets
            
            
            119,664
            
            
            166,723**PROPERTY
                AND EQUIPMENT - AT COST**Machinery
                and equipment
            
            
            587,276
            
            
            587,276Furniture
                and fixtures
            
            
            43,750
            
            
            43,750Leasehold
                improvements
            
            
            8,141
            
            
            8,141639,167
            
            
            639,167Less
                accumulated depreciation and amortization
            
            
            (625,635
            )
            
            (621,306
            )13,532
            
            
            17,861SECURITY
                DEPOSIT
            
            
            5,500
            
            
            5,500TOTAL
                ASSETS
            
            $
            138,696
            
            $
            190,084





**THE
      ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**




-F4-





**WI-TRON,
      INC.**


**BALANCE
      SHEETS**


**December
      31, 2005**





2006
            
            2005**LIABILITIES
                AND STOCKHOLDERS' (DEFICIENCY)****CURRENT
                LIABILITIES**Overdraft
            
            $
            36,140
            
            $
            -Secured
                note payable -- Phoenix -- payment default
            
            $
            10,000
            
            $
            20,000Accounts
                payable
            
            
            211,700
            
            
            280,293Other
                convertible notes payable
            
            
            -
            
            
            -Notes
                payable issued in connection with private placement of common stock,including
                accrued interest of $25,016 (2006) and $7,015 (2005) - payment
                default
            
            
            325,016
            
            
            307,015Accrued
                expenses and other current liabilities (including delinquent federal
                payrolltaxes,
                penalties and interest aggregating $1,822 (2006) and $90,752
                (2005)
            
            
            102,397
            
            
            214,998Accrued
                settlement of litigation
            
            
            95,000
            
            
            95,000Loan
                payable to TEK, Ltd.
            
            
            44,500
            
            
            -Loans
                payable - officers
            
            
            150,100
            
            
            423,200TOTAL
                CURRENT LIABILITIES REPRESENTING TOTALLIABILITIES
            
            
            974,853
            
            
            1,340,506**STOCKHOLDERS'
                (DEFICIENCY)**Convertible
                Preferred Stock,******Series
                C -******authorized
                5,000,000 shares of $.0001 par value with a liquidation preference
                of $2
                per share;
              130,000
                shares issued and outstanding at December 31, 2006 - liquidation
                preference $260,000
              140,000
                shares issued and outstanding at December 31, 2005 - liquidation
                preference $280,000
            
            
            13
            
            
            14Common
                stock - authorized, 100,000,000 shares of $.0001 parvalue;
                shares 36,928,293 and 23,338,267 shares issued/issuableand
                outstanding at December 31, 2006 and 2005, respectively
            
            
            3,694
            
            
            2,334Additional
                paid-in capital
            
            
            25,999,095
            
            
            23,794,954Accumulated
                deficit
            
            
            (26,838,959
            )
            
            (24,947,724
            )(836,157
            )
            
            (1,150,422
            )$
            138,696
            
            $
            190,084


**THE
        ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**
  -F5-





**WI-TRON,
      INC.**


**STATEMENTS
      OF OPERATIONS**


**Year
      ended December 31, 2005**





2006
            
            2005Net
                sales
            
            $
            154,309
            
            $
            471,487Cost
                of goods sold (including write-down of raw materials inventoryof
                $26,237 in 2006 and $129,906 in 2005)
            
            
            398,364
            
            
            626,003Gross
                loss
            
            
            (244,055
            )
            
            (154,516
            )Operating
                expensesSelling,
                general and administrative
            
            
            1,284,384
            
            
            603,211Research,
                engineering and development
            
            
            337,799
            
            
            552,0761,622,183
            
            
            1,155,287Operating
                loss
            
            
            (1,866,238
            )
            
            (1,309,803
            )Nonoperating
                income (expenses)Interest
                income and other income
            
            
            3,292
            
            
            -Interest
                expense
            
            
            (18,001
            )
            
            (8,092
            )Federal
                tax penalties and interest
            
            
            (26,558
            )
            
            (51,738
            )Settlements
                of accounts payable
            
            
            17,629
            
            
            -Loan
                conversion costs
            
            
            -
            
            
            (21,627
            )Sale
                of New Jersey tax benefits
            
            
            -
            
            
            73,126Loss
                before income taxes
            
            
            (1,889,876
            )
            
            (1,318,134
            )Provision
                for income taxes
            
            
            1,359
            
            
            601NET
                LOSS
            
            $
            (1,891,235
            )
            $
            (1,318,735
            )Net
                loss per share - basic and diluted
            
            $
            (0.06
            )
            $
            (0.09
            )Weighted
                average number of shares outstanding
            
            
            32,078,424
            
            
            15,195,746


**THE
        ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**
  -F6-




**Wi-Tron,
      Inc.**


**STATEMENT
      OF STOCKHOLDERS' DEFICIENCY**


**Years
      Ended December 31, 2006 and 2005**





Series
                C Convertible Preferred Stock
            
            Common
                Stock
            
            AdditionalShares
            
            Par
              Value
            
            Shares
            
            Par
              Value
            
            Paid-In
                  Capital
            
            Accumulated
                  Deficit
            
            TotalBALANCE
                AT DECEMBER 31, 2006 (restated)
            
            
            -
            
            $
            -
            
            
            10,668,267
            
            $
            1,067
            
            $
            22,502,985
            
            $
            (23,628,989
            )
            $
            (1,124,937
            )Net
                loss for the year ended December 31, 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,318,735
            )
            
            (1,318,735
            )Issuance
                of convertible preferred stock in satisfaction of certainloans
                from John C. Lee and Jessica Lee
            
            
            140,000
            
            
            14
            
            
            
            
            
            
            
            
            699,986
            
            
            
            
            
            700,000Notes
                payable converted into common stock
            
            
            
            
            
            
            
            
            370,000
            
            
            37
            
            
            44,363
            
            
            
            
            
            44,400Private
                placement of common stock, net of costs of $56,000
            
            
            
            
            
            
            
            
            12,050,000
            
            
            1,205
            
            
            515,795
            
            
            
            
            
            517,000Private
                placements costs to be paid with issuable common stock
            
            
            
            
            
            
            
            
            200,000
            
            
            20
            
            
            25,980
            
            
            
            
            
            26,000Issuance
                of common stock for services rendered by third party
            
            
            
            
            
            
            
            
            50,000
            
            
            5
            
            
            5,845
            
            
            
            
            
            5,850BALANCE
                AT DECEMBER 31, 2005
            
            
            140,000
            
            
            14
            
            
            23,338,267
            
            
            2,334
            
            
            23,794,954
            
            
            (24,947,724
            )
            
            (1,150,422
            )Net
                loss for the year ended December 31, 2006
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,891,235
            )
            
            (1,891,235
            )Private
                placements of common stock
            
            
            
            
            
            
            
            
            11,075,000
            
            
            1,108
            
            
            1,365,084
            
            
            
            
            
            1,366,192Shares
                sold to officer at prices below market
            
            
            
            
            
            
            
            
            40,000
            
            
            4
            
            
            13,196
            
            
            
            
            
            13,200Conversion
                of preferred stock into common stock
            
            
            (9,000
            )
            
            (1
            )
            
            900,000
            
            
            90
            
            
            (89
            )
            
            
            
            
            -Offering
                costs paid through the issuance of stock options
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            62,809
            
            
            
            
            
            62,809Shares
                issued to employee in satisfaction of vacation pay
            
            
            
            
            
            
            
            
            40,000
            
            
            4
            
            
            9,914
            
            
            
            
            
            9,918Amortization
                of share based compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            7,467
            
            
            
            
            
            7,467Public/investor
                relations fees paid by issuance of common stock
            
            
            
            
            
            
            
            
            237,780
            
            
            24
            
            
            59,421
            
            
            
            
            
            59,445Public/investor
                relations consulting agreement
            
            
            
            
            
            
            
            
            625,000
            
            
            63
            
            
            206,187
            
            
            
            
            
            206,250Shares
                issued to officer to reimburse for legal fees paid by him in2003
                with Company shares owned by him
            
            
            
            
            
            
            
            
            132,246
            
            
            13
            
            
            46,273
            
            
            
            
            
            46,286Settlement
                of officer loans through issuance of common stock
            
            
            
            
            
            
            
            
            500,000
            
            
            50
            
            
            274,840
            
            
            
            
            
            274,890Contribution
                of capital by officer - settlement of officer loans atless
                than face amounts
            
            
            -
            
            
            -
            
            
            
            
            
            -
            
            
            145,843
            
            
            
            
            
            145,843Employee
                options exercises
            
            
            
            
            
            
            
            
            40,000
            
            
            4
            
            
            13,196
            
            
            
            
            
            13,200BALANCE
                AT DECEMBER 31, 2006
            
            
            131,000
            
            $
            13
            
            
            36,928,293
            
            $
            3,694
            
            $
            25,999,095
            
            $
            (26,838,959
            )
            $
            (836,157
            )


**THE
        ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**
  -F7-




**Wi-Tron,
      Inc.**


**STATEMENTS
      OF CASH FLOWS**


**Year
      ended December 31, 2005**





2006
            
            2005Cash
                flows from operating activities:Net
                Loss
            
            $
            (1,891,235
            )
            $
            (1,318,735
            )Adjustments
                to reconcile net loss to net cash used in operating
                activitiesGain
                on sale of property & equipment
            
            
            -
            
            
            -Amortization
                of share based compensation
            
            
            7,467
            
            
            -Salary
                deferrals added to officer loans
            
            
            -
            
            
            62,635Restricted
                common stock issued on employee options exercise
            
            
            7,200
            
            
            -Provision
                for inventory write-down
            
            
            26,237
            
            
            129,906Depreciation
                and amortization
            
            
            4,329
            
            
            5,537Share-based
                compensation of officer in connection withsettlement
                of officer loans
            
            
            223,879
            
            
            -Shares
                issued to employee in satisfaction of vacation pay
            
            
            9,918
            
            
            -Interest
                accrued added to private placement and convertible promissory
                notes
            
            
            18,001
            
            
            7,015Loan
                conversion costs
            
            
            -
            
            
            21,627Payment
                of security deposits
            
            
            -
            
            
            (5,500
            )Shares
                issued to officer to reimburse for legal fees paid by him in 2003
                withCompany
                shares owned by him
            
            
            46,286
            
            
            -Consultants
                paid through the issuance of common stock
            
            
            265,695
            
            
            5,850Changes
                in assets and liabilitiesAccounts
                receivable
            
            
            (3,151
            )
            
            (6,329
            )Inventories
            
            
            (12,233
            )
            
            71,136Prepaid
                expenses and other assets
            
            
            1,208
            
            
            (1,212
            )Accounts
                payable and accrued expense
            
            
            (181,194
            )
            
            (54,370
            )Advances
                from customer
            
            
            -
            
            
            (22,008
            )Total
                adjustments
            
            
            413,642
            
            
            214,287Net
                cash used in operating activities
            
            
            (1,477,593
            )
            
            (1,104,448
            )Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            -
            
            
            (21,647
            )Net
                cash (used in) provided by investing activities
            
            
            -
            
            
            (21,647
            )Cash
                flows from financing activities:(Decrease)
                Increase in overdraft
            
            
            36,140
            
            
            -Payment
                of secured promissory note to Phoenix
            
            
            (10,000
            )
            
            (20,000
            )Proceeds
                from convertible notes pursuant to Lee financing
            
            
            -
            
            
            194,000Proceeds
                from notes payable in connection with private placement of common
                stock
            
            
            -
            
            
            300,000Proceeds
                from the sale of common stock via private placements
            
            
            1,429,001
            
            
            573,000Shares
                sold to officer at prices below market
            
            
            13,200
            
            
            -Employee
                options exercises
            
            
            6,000
            
            
            -Proceeds
                from loans from TEK, Ltd.
            
            
            44,500
            
            
            -Repayment
                of loans from officers
            
            
            (76,246
            )
            
            (8,141
            )Net
                cash provided by financing activities
            
            
            1,442,595
            
            
            1,038,859Continued
                on next page


**THE
        ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**
  -F8-
 **Wi-Tron,
            Inc.**
 **STATEMENTS
            OF CASH FLOWS**
 **Year
            ended December 31, 2005**


Continued
                from previous pageNET
                (DECREASE) IN CASH
            
            $
            (34,998
            )
            $
            (87,236
            )Cash
                and cash equivalents at beginning year
            
            
            34,998
            
            
            122,234Cash
                and cash equivalents at end year
            
            $
            -
            
            $
            34,998**Supplemental
                disclosures of cash flow information:**Cash
                paid for:Interest
            
            $
            406
            
            $
            -Income
                taxes
            
            $
            1,359
            
            $
            601**Noncash
                financing activities:**Restricted
                common stock issued to settle officer loans
            
            $
            51,011
            
            $
            -Contribution
                of capital by officer - settlement of officer loans at less than
                face
                amounts
            
            
            145,843
            
            
            -





**THE
        ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS**
  -F9-




**WI-TRON,
      INC.**


**Notes
      to Financial Statements**


**December
      31, 2006 and 2005**





**NOTE
      A - NATURE OF OPERATIONS AND LIQUIDITY**





Wi-Tron,
      Inc. (the Company) has historically operated in one segment, which is the
      design, manufacture and selling of ultra linear single and multi channel power
      amplifiers, cellular base station components, and broadband wireless products
      to
      the worldwide wireless telecommunications market.





The
      Company's financial statements have been presented on a going concern basis,
      which contemplates the realization of assets and the satisfaction of liabilities
      in the normal course of business. The liquidity of the Company has been
      adversely affected in recent years by significant losses from operations. The
      Company has incurred losses of $1,891,235 and $1,318,735 in 2006 and 2005,
      respectively.





With
      no
      remaining cash and reduced revenues, management believes that the Company will
      continue to have some difficulty meeting its working capital obligations over
      the next 12 months. The Company is presently dependent on cash flows generated
      from sales and private placements of debt or equity. If we don't substantially
      improve our deteriorated revenues or if we are unable to raise additional
      capital through private placements, there will be serious adverse consequences
      and, accordingly, there is substantial doubt in our ability to remain in
      business over the next 12 months. There can be no assurance that sufficient
      financing will be available to the Company on acceptable terms, or at all.
      If
      adequate funds are not available, the Company may be required to delay, scale
      back or eliminate its research, engineering and development or manufacturing
      programs or obtain funds through arrangements with partners or others that
      may
      require the Company to relinquish rights to certain of its technologies or
      potential products or other assets. Accordingly, the inability to obtain such
      financing could have a material adverse effect on the Company's business,
      financial condition and results of operations.





In
      the
      past, the Company funded certain operating expenses through borrowings (in
      the
      form of deferring salaries and cash advances) from officers and principal
      shareholders. The Company also issued its stock in lieu of cash payments for
      compensation, sales commissions and consulting fees, wherever possible.





Management's
      plans for dealing with the foregoing matters include:


·Increasing
      sales of its high speed
      internet connectivity products through both individual customers, strategic
      alliances and mergers.




·Decreasing
      the dependency on certain
      major customers by aggressively seeking other customers in the amplifier
      markets;




·Partnering
      with significant companies
      to jointly develop innovative products, which has yielded orders with
      multinational companies to date, and which are expected to further expand such
      relationships;




·Maintaining
      a reduced cost structure
      through a more streamlined operation by using automated machinery to produce
      components for our products;




-F10-


**WI-TRON,
        INC.**
 **Notes
        to Financial Statements**
 **December
        31, 2006 and 2005**


·Deferral
      of payments of officers'
      salaries, as needed;




·Reducing
      overhead costs and general
      expenditures.




·Merging
      with another company to
      provide adequate working capital and jointly develop innovative products.




**NOTE
      B - SUMMARY OF ACCOUNTING POLICIES**





A
      summary
      of the significant accounting policies consistently applied in the preparation
      of the accompanying financial statements follows.





1.
      REVENUE RECOGNITION





Revenue
      is recognized upon shipment of products to customers because our shipping terms
      are F.O.B. shipping point. There are generally no rights of return, customer
      acceptance protocols, installation or any other post-shipment obligations.
      All
      of our products are custom built to customer specifications. We provide an
      industry standard one-year limited warranty under which the customer may return
      the defective product for repair or replacement. There is no maintenance or
      support revenue.





Returns
      received under warranty are not material relative to sales, nor are the costs
      to
      repair. All sales are final, except for warranty repair/replacement and there
      is
      no price protection. In addition, the only company post-shipment obligation
      is
      for warranty repair and replacement. Finally, we do not install product or
      provide services for a fee.


-F11-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


2.
      INVENTORIES





Inventories
      are stated at the lower of cost or market; cost is determined using the
      first-in, first-out method. As virtually all of our products are made to
      customer specifications, we do not keep finished goods in stock except for
      completed customer orders that have not been shipped. Our work-in-progress
      generally consists of customer orders that are in the process of manufacture
      but
      are not yet complete at the period end date. We review all of our components
      for
      obsolescence and excess quantities on a periodic basis and make the necessary
      adjustments to net realizable value as deemed necessary. At December 31, 2006
      and 2005, inventories consisted of the following:




2006
            
            2005Component
                parts
            
            $
            26,722
            
            $
            58,177Work-in-progress
            
            
            46,040
            
            
            36,431Finished
                Goods
            
            
            21,825
            
            
            13,983$
            94,587
            
            $
            108,591


3.
      PROPERTY, PLANT AND EQUIPMENT





Depreciation
      and amortization are provided for in amounts sufficient to relate the cost
      of
      depreciable assets to operations over their estimated service lives, which
      range
      from three to seven years. Leasehold improvements are amortized over the lives
      of the respective leases, or the service lives of the improvements, whichever
      is
      shorter. The straight-line method of depreciation is followed for substantially
      all assets for financial reporting purposes, but accelerated methods are used
      for tax purposes.





4.
      VALUATION OF LONG-LIVED ASSETS





The
      Company reviews long-lived assets held and used for possible impairment whenever
      events or changes in circumstances indicate that the carrying amount of an
      asset
      may not be recoverable. The Company has not recorded any provision for the
      impairment of long-lived assets at December 31, 2006.





5.
      INCOME
      TAXES





The
      Company accounts for income taxes under the provisions of Statement of Financial
      Accounting Standards No. 109, Accounting for Income Taxes. This statement
      requires, among other things, an asset and liability approach for financial
      accounting and reporting of deferred income taxes. In addition, the deferred
      tax
      liabilities and assets are required to be adjusted for the effect of any future
      changes in the tax law or rates. Deferred income taxes arise from temporary
      differences resulting in the basis of assets and liabilities for financial
      reporting and income tax purposes. A valuation allowance is provided if the
      Company is uncertain as to the realization of deferred tax assets.





6.
      RISKS,
      UNCERTAINTIES AND CERTAIN CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCY





The
      Company's future results of operations involve a number of significant risks
      and
      uncertainties. Factors that could affect the Company's future operating results
      and cause actual results to vary materially from expectations include, but
      are
      not limited to, dependence on key personnel, dependence on a limited number
      of
      customers, ability to design new products and product obsolescence, ability
      to
      generate consistent sales, ability to finance research and development,
      government regulation, technological innovations and acceptance, competition,
      reliance on certain vendors, credit and other risks.





Additionally,
      the Company assumes certain insurance risks by self-insuring and its statutorily
      required workers compensation coverage lapsed due to non-payment of the
      premiums. The Company has no reserves to cover self insurance
      losses.




-F12-


**WI-TRON,
        INC.**
 **Notes
        to Financial Statements**
 **December
        31, 2006 and 2005**


Financial
      instruments, which potentially subject the Company to concentrations of credit
      risk, consist principally of cash and accounts receivable.





The
      Company maintains cash and cash equivalents in bank deposit and money market
      accounts in one bank, which, at times, may exceed federally insured limits
      or
      not be insured. The Company has not experienced any losses in such accounts
      and
      does not believe it is exposed to any significant credit risk on cash and cash
      equivalents.





During
      2006, 4 customers accounted for approximately 96% of net sales 3 customers
      accounted for and 100% of net accounts receivable at December 31, 2006. Export
      sales in 2006 accounted for approximately 88% all net sales including 60% to
      Europe.





During
      2005, one customer accounted for approximately 88% of net sales and 99% of
      net
      accounts receivable at December 31, 2005. Export sales in 2005 accounted for
      substantially all net sales and were primarily to Europe.





In
      addition, the Company is dependent on a limited number of suppliers for key
      components used in the Company's products (primarily power transistors) and
      subcontracted manufacturing processes. Management believes that other suppliers
      could provide similar components and processes on comparable terms. A change
      in
      suppliers, however, could disrupt manufacturing.





The
      carrying values of financial instruments potentially subject to valuation risk,
      consisting of cash and cash equivalents, accounts receivable, and officer's
      loan
      receivable, approximate fair value, principally because of the short maturity
      of
      these items.





7.
      USE OF
      ESTIMATES





In
      preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management is required
      to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements and revenues and expenses during the reporting
      period. Actual results could differ from those estimates.





8.
      STOCK-BASED EMPLOYEE COMPENSATION





On
      January 1, 2006 the Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”). SFAS
      123(R) requires the Company to recognize expense related to the fair value
      of
      employee stock option awards and to measure the cost of employee services
      received in exchange for an award of equity instruments based on the grant
      date
      fair value of the award. This eliminated the exception to account for such
      awards using the intrinsic method previously allowable under Accounting
      Principles Board Opinion No. 25, “Accounting for Stock issued to Employees”
(“APB 25”). Prior to January 1, 2006, we accounted for the stock based
      compensation plans under the recognition and measurement provisions of APB
      25,
      as permitted by SFAS No. 123, “Accounting for Stock-Based
      Compensation.”


-F13-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**




Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      SFAS 123(R), using the modified-prospective-transition method. Under that
      transition method, compensation cost recognized in 2006 and beyond includes:
      (a)
      compensation cost for all share-based payments granted prior to, but not yet
      vested as of January 1, 2006, based on the grant date fair value estimated
      in
      accordance with the original provisions of SFAS No. 123, and (b) compensation
      cost for all stock-based payments granted subsequent to January 1, 2006, based
      on the grant-date fair value estimated in accordance with the provisions of
      SFAS
      123(R). Results for prior periods have not been restated and there is no
      cumulative effect upon adoption of SFAS 123(R).





Prior
      to
      adoption of SFAS 123(R) the Company used intrinsic-value method of accounting
      for stock based-awards granted to employees. No stock-based compensation cost
      is
      included in the net loss for the year ended December 31, 2005 as no options
      were
      granted to employees during that period. All stock-based compensation during
      the
      year ended December 31, 2006 was paid in the form of restricted common
      stock.





9.
      CASH
      AND CASH EQUIVALENTS





The
      Company considers all highly liquid investments purchased with original
      maturities of three months or less to be cash equivalents.





10.
      ADVERTISING EXPENSES





The
      Company expenses advertising costs as incurred. Advertising expenses were $5,951
      and $500 for the years ended December 31, 2006 and 2005, respectively.





11.
      LOSS
      PER SHARE





The
      Company complies with the requirements of the Financial Accounting Standards
      Board issued Statement of Financial Accounting Standards No. 128, "Earnings
      per
      Share" ("SFAS No. 128"). SFAS No. 128 specifies the compilation, presentation
      and disclosure requirements for earnings per share for entities with publicly
      held common stock or potential common stock. Net loss per common share - basic
      and diluted is determined by dividing the net loss by the weighted average
      number of common stock outstanding. Net loss per common share - diluted does
      not
      include potential common shares derived from stock options and warrants (see
      Note C) because they are antidilutive.


-F14-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**





12.
      SEGMENT INFORMATION





The
      Company has not pursued its wireless Internet connectivity business since 2003
      and is currently operating in one segment.





13.
      FAIR
      VALUE OF FINANCIAL INSTRUMENTS





Cash
      and
      cash equivalents, accounts receivable, accounts payable, and accrued expenses
      reported in the consolidated balance sheets equal or approximate fair value
      due
      to their short maturities.





14.
      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS





In
      February, 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial
      Assets and Financial Liabilities including an amendment of FAS 115, or FAS
      159.
      This statement provides companies with an option to report selected financial
      assets and liabilities at fair value. This statement is effective for fiscal
      years beginning after November 15, 2007 with early adoption permitted. We are
      assessing FAS No. 159 and have not yet determined the impact that the adoption
      of FAS No. 159 will have on our results of operations or financial position,
      if
      any.





In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements , or SAB 108,
      that requires public companies to utilize a “dual approach” to assessing the
      quantitative effects of financial misstatements. This dual approach includes
      both an income statement focused assessment and a balance sheet focused
      assessment. SAB 108 is effective for annual financial statements covering the
      first fiscal year ending after November 15, 2006. We are currently assessing
      the
      impact of SAB 108 but do not expect that it will have a material effect on
      our
      results of operations or financial condition.





In
      September 2006, the FASB issued Statement of Financial Accounting Standard
      (“SFAS”) No. 157 Fair Value Measurements. This statement defines fair value,
      establishes a fair value hierarchy to be used in generally accepted accounting
      principles and expands disclosures about fair value measurements. Although
      this
      statement does not require any new fair value measurements, the application
      could change current practice. The statement is effective for fiscal years
      beginning after November 15, 2007. The Company is currently evaluating the
      impact of this statement to its financial position and results of
      operations.




In
      September 2006, the FASB issued SFAS No. 158 Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an Amendment of FASB Statements
      No. 87, 88, 106, and 132(R). This statement requires a company to recognize
      the
      funded status of a benefit plan as an asset or a liability in its statement
      of
      financial position. In addition, a company is required to measure plan assets
      and benefit obligations as of the date of its fiscal year-end statement of
      financial position. The recognition provision of this statement, along with
      additional disclosure requirements, is effective for fiscal years ending after
      December 15, 2006, while the measurement date provision is effective for fiscal
      years ending after December 15, 2008. Management does not believe that adoption
      of this statement will have a material
      impact on the financial position of the Company.


-F15-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


In
      July
      2006, the FASB interpretation (“FIN”) No. 48, Accounting for Uncertainty in
      Income Taxes - An Interpretation of FASB Statement No. 109, was issued regarding
      accounting for, and disclosure of, uncertain tax positions. This Interpretation
      clarifies the accounting for uncertainty in income taxes recognized in an
      enterprise's financial statements in accordance with FASB Statement No. 109,
      “Accounting for Income Taxes,” and prescribes a recognition threshold and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in a tax return. The interpretation
      also provides guidance on derecognition, classification, interest and penalties,
      accounting in interim periods, disclosure, and transition. This interpretation
      is effective for fiscal years beginning after December 15, 2006. Management
      does
      not believe that adoption of this statement will have a material impact on
      the
      financial position of the Company.





In
      March
      2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial
      Assets, an Amendment of SFAS No. 140. SFAS No. 156 requires separate recognition
      of a servicing asset and a servicing liability each time an entity undertakes
      and obligation to service a financial asset by entering into a servicing
      contract. This statement also requires that servicing assets and liabilities
      be
      initially recorded at fair value and subsequently adjusted to the fair value
      at
      the end of each reporting period. This statement is effective in fiscal years
      beginning after September 15, 2006. The Company feels implementation of this
      pronouncement will have no material effect on its financial
      statements.





In
      February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS NO.
      155, Accounting for Certain Hybrid Financial Instruments- An Amendment of FASB
      No. 133 and 140. The purpose of SFAS statement No. 155 is to simplify the
      accounting for certain hybrid financial instruments by permitting fair value
      re-measurement for any hybrid financial instrument that contains an embedded
      derivative that otherwise would require bifurcation. SFAS No. 155 also
      eliminates the restriction on passive derivative instruments that a qualifying
      special-purpose entity may hold. SFAS No. 155 is effective for all financial
      instruments acquired or issued after the beginning of any entity's first fiscal
      year beginning after September 15, 2006.





In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based
      Payment,” or SFAS No. 123R. SFAS No. 123R, which replaces SFAS No. 123 and
      supersedes APB Opinion No. 25, requires that compensation cost relating to
      share-based payment transactions be recognized in the financial statements,
      based on the fair value of the equity or liability instruments issued. On April
      14, 2005, the SEC staff postponed implementation of SFAS No. 123 (R) and it
      is
      effective for the Company as of the beginning of the first interim or annual
      reporting period that begins after December 15, 2005 and applies to all awards
      granted, modified, repurchased or cancelled after the effective date. The
      Company adopted this statement as of January 1, 2006.


-F16-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


**NOTE
      C - STOCKHOLDERS' EQUITY**





1.  Warrants
      and Options




At
      December 31, 2006, the following 1,445,000 warrants, remained
      outstanding:





(1)  20,000
      exercisable at $.20 through March 2010




(2)  600,000
      exercisable at $.20 through August 2009




(3)  750,000
      exercisable at $.20 through August 2009




(4)  75,000
      exercisable at $.96 through March 2007





At
      December 31, 2006, the Company had employee stock options outstanding to acquire
      2,900,000 shares of common stock at exercise prices of $.15 to $0.20 per
      share.





2.  Stock
      Purchase and Financing Agreements





On
      January 28, 2004, the Company entered into a Subscription Agreement (the
      "Agreement") with Phoenix Opportunity Fund II, L.P. ("Phoenix"), a limited
      partnership organized under the laws of the State of Delaware, pursuant to
      which
      Phoenix agreed to make investments in the Company in exchange for notes and
      preferred shares.





The
      preferred shares were never issued to Phoenix. Due to a dispute among the
      Parties with respect to the terms of the loan transaction. The Company and
      Phoenix agreed to rescind their agreement, and the Company agreed to pay
      Phoenix: (i) $20,000 in cash for the funds Phoenix invested, (ii) $80,000 in
      cash for the funds which Phoenix lent to the Company, and (iii) $40,000 for
      expenses incurred by Phoenix on behalf of the Company. The $40,000 was paid
      by
      delivery of a secured promissory note due March 31, 2005, and bearing interest
      at the rate of eight percent per annum secured by substantially all the assets
      of the Company.





The
      Company did not make the required $40,000 payment due on March 31, 2005 under
      the Phoenix rescission agreement, and the Company remains currently delinquent
      and owes a balance of $10,000 as of December 31, 2006. The Company made the
      following payments since March 31, 2005: $10,000 during the quarter ended June
      30, 2005; $5,000 during the quarter ended September 30, 2005; $5,000 during
      the
      quarter ended December 31, 2005 and $10,000 during the quarter ended June 30,
      2006. As yet, no action has been taken by Phoenix concerning this
      default.





In
      a
      separate transaction, John Chase Lee of Piscataway, NJ ("Lee") entered into
      a
      Note Purchase Agreement with the Company by which Lee agreed to lend the Company
      an initial $200,000 and up to an additional $200,000 in one or more installments
      on or before October 30, 2004. The Company agreed to deliver to Lee convertible
      promissory notes which are convertible into Series C shares representing
      approximately 80% of the Company's outstanding stock on a fully diluted basis.
      Such conversion will take place at such time as the Company is able to do so.
      Messrs. Devendar Bains and Tarlochan Bains are required to devote their full
      business time and attention to the business of the Company for eight (8) years
      from May 25, 2004. In the event that either Devendar Bains or Tarlochan Bains
      must leave the employ of the Company for any reason, each agrees that, if
      requested by the Board of Directors of the Company, he will
      use
      his best efforts to find a qualified replacement for himself acceptable to
      the
      Board of Directors, and that he will not engage in a business competitive with
      the Company for a period of eight (8) years. On May 25, 2004, Lee loaned the
      Company $250,000, and was issued three convertible promissory notes which will
      be convertible in the aggregate into Series C shares representing approximately
      40% of the Company's outstanding stock on a fully diluted basis, if and when
      converted. If not converted, the notes were payable on demand, provided that
      demand could not have been made before December 31, 2004, unless the Company
      was
      in default of the Note Purchase Agreement.


-F17-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


Of
      the
      $250,000 loaned to the Company, $100,000 was used to pay Phoenix in connection
      with the rescission described above, $45,000 was used to make a final payment
      in
      resolution of litigation with High Gain Antenna Co. Ltd. of Korea, and to pay
      associated bank fees, $12,000 was used to pay legal fees and $43,000 was used
      for working capital purposes. In August 2004, an additional $50,000 was received
      from each of Hye Joung Lee (A/K/A Jessica Lee) and Joong Bin Lee (an aggregate
      of $100,000) in connection with the same agreement. These parties are business
      associates of John Lee, but otherwise unrelated. In October 2004, an additional
      $156,000 was received from John Lee, of which $6,000 represented a temporary
      additional advance outside of the Series C Convertible financing.





At
      various times from February through May 2005, an aggregate of $194,000 was
      received from John Lee in connection with the Series C Convertible
      financing.





On
      June
      27, 2005, the Company entered into an agreement with Lee whereby 130,000 Series
      C Preferred shares (convertible into 13,000,000 common shares) would be issued
      in full satisfaction of $650,000 of loans made by him to the Company. The
      conversion of the loans into convertible preferred stock took place on August
      11, 2005.





3.  Private
      Placements of Common Stock and Debt





In
      June
      2005 the Board of Directors consented to the following:




·Authorized
      and created 500,000
      Series C Convertible Preferred Stock with a par value of $.0001 with each share
      convertible into 100 shares of common stock;




·Amend
      the Certificate of
      Incorporation to increase the authorized shares of common stock to 100,000,000
      shares, $.0001 par value and preferred stock to 5,000,000 shares, $.0001 par
      value;




·Authorize
      the conversion of
      $650,000 of the Lee notes into 130,000 shares of Series C Convertible Preferred
      Stock (converted on August 11, 2005);




·Renew
      and amend the Stock
      Option Plan extending the plan for an additional ten (10) years and increasing
      the number of shares from 2,250,000 to 5,000,000;




·Issue
      to Jessica Lee 10,000
      shares of Series C Convertible Preferred Stock convertible into 1,000,000 shares
      of common stock in satisfaction of $50,000 due to her (converted on August
      11,
      2005);


-F18-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**




·Issue
      185,000 shares to each of
      the holders of the convertible promissory notes (an aggregate of 370,000 shares)
      with a balance of $22,773 at June 30, 2005 at a price of $.06 per share reduced
      from the $.10 per share as set forth in the promissory notes (these shares
      were
      issued on July 26, 2005);




·Issue
      200,000 shares of common
      stock and 200,000 cashless warrants exercisable at $.30 per share to its lawyer
      for services rendered;




·Issue
      an aggregate of 7,000,000
      shares of common stock to certain selected individuals and entities via Private
      Placements (issued July 21, 2005) with piggy-back registration rights
      and;




·Settlement
      of the liability for
      unpaid officer compensation through the issuance of common stock warrants and
      the establishment of new employment agreements (See Note F).





In
      June
      2005, the Company completed two private placements of common stock aggregating
      7,000,000 shares and $270,000 in cash proceeds.





In
      August
      2005, the Company completed a private placement of common stock and notes
      payable aggregating 600,000 shares with $336,000 in cash proceeds as of December
      31, 2005. The offering was represented by 6 units at $56,000 each. Each unit
      consists of 100,000 shares of common stock and a $50,000 note payable with
      interest at 6%. A total of 600,000 shares were issued in this offering for
      a
      total of $36,000. The notes, aggregating $300,000, are due upon the earlier
      of
      the Company completing any financing with gross proceeds in excess of
      $1,000,000; or March 1, 2006. Since the Company was unable to repay the notes
      on
      March 1, 2006. The Company requested and all of the investors agreed to a 90
      day
      extension on the notes until June 1, 2006 and again through November 2006.
      The
      Company issued warrants to purchase an aggregate of 600,000 shares of common
      staock exercisable at $.20 per share. These notes remain unpaid at December
      31,
      2006, and the Company may continue to seek further similar extensions on an
      ongoing basis. No actions have been taken by the note holders to collect the
      balance up to and since December 31, 2006 through the date of this
      filing.





In
      November 2005, the Company commenced a private placement of 10,000,000 shares
      of
      common stock to accredited investors at $.06 per share pursuant to Regulation
      D
      of the Securities Act of 1933, as amended, and Rule 506 promulgated there under.
      The Company received gross proceeds of $267,000 in November and December 2005
      for 4,450,000 issuable shares. The Company's officers and directors directed
      the
      sale and received no commissions or other remuneration. The shares in connection
      with this offering were issued in January 2006.





On
      March
      10, 2006, the Company issued 5,550,000 shares of common stock through a private
      offering to accredited investors at $.06 per share (gross proceeds of $333,000)
      pursuant to Regulation D of the Securities Act of 1933, as amended, and Rule
      506
      promulgated thereunder. The Company's officers and directors directed the sale
      and received no commissions or other remuneration.


-F19-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


In
      March
      2006, the Company received gross proceeds of $50,000 ($.08 per share) from
      the
      wife of John C. Lee (Chairman of the Board of Directors) for 625,000 shares
      of
      restricted common stock.





4.  Series
      C Convertible Preferred Stock





As
      of
      December 31, 2006, there were 131,000 shares of Series C Convertible Preferred
      Stock outstanding, 125,000 of which are owned by John Lee, the Chairman of
      the
      Board of Directors and 6,000 of which are owned by Jessica Lee, the former
      Chief
      Financial Officer. Each share of the preferred stock is convertible into 100
      shares of common stock. Accordingly, the outstanding preferred shares, in the
      aggregate, are convertible into 13,100,000 shares of common stock.





5.  Other
      Issuances of Common Stock and Related Matters





In
      January 2006, the Company issued to the securities lawyer non-qualified 10
      year
      options to purchase 1,000,000 shares at $.20 per share for services rendered
      in
      connection with successful private placements. The options were valued at
      $62,809 and were charged against the proceeds of private placements during
      the
      quarter ended March 31, 2006. In November 2006, this lawyer voluntarily returned
      250,000 of these options.





In
      January 2006, John Lee and Jessica Lee each converted 2,000 shares of their
      preferred stock into 200,000 shares of restricted common stock (aggregate of
      400,000 shares). In September 2006, John Lee converted 3,000 shares of his
      preferred stock into 300,000 shares of restricted common stock. Also in
      September 2006, Jessica Lee converted 2,000 shares of her preferred stock into
      200,000 shares of restricted common stock.





On
      February 8, 2006, the Company issued 50,000 shares of restricted common stock
      to
      Eric Popkoff for consulting services pursuant to an agreement with Undiscovered
      Equities Research Corporation ("UERC") dated September 23, 2005 ($5,850 was
      charged to operations in 2005).





In
      March
      2006, the Company's lawyer was issued 200,000 shares of restricted common stock
      which were granted in 2005 in connection with the private placements of
      securities and accounted for in the Statement of Stockholders' Equity as of
      December 31, 2005 ($26,000 was recorded as offering costs reducing stockholders'
      equity in 2005).


-F20-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


Pursuant
      to a series of subscription agreements, the Company received $925,000 in
      proceeds from several issuances of restricted common stock it made to the former
      secretary/director (who was also the Company's public/investor relations
      consultant) as follows:





Date
                Issued
            
            
            
            Shares
                Issued
            
            Gross
                Proceeds03/30/06
            
            
            
            
            
            1,500,000
            
            $
            225,00005/04/06
            
            
            
            
            
            500,000
            
            
            110,00005/17/06
            
            
            (A)
            
            
            400,000
            
            
            100,00007/18/06
            
            
            (A)
            
            
            800,000
            
            
            200,00009/08/06
            
            
            
            
            
            1,000,000
            
            
            250,00011/11/06
            
            
            (B)
            
            
            200,000
            
            
            40,0004,400,000
            
            $
            925,000





(A)
      Governed by a subscription agreement dated July 18, 2006 for 1,200,000 shares
      at
      $.25 per share.




(B)
      Governed by a subscription agreement dated November 11, 2006 for 200,000 shares
      at $.20 per share.





During
      the year ended December 31, 2006 the Company issued 237,780 shares of restricted
      common stock to the former secretary/director as compensation for consulting
      services rendered valued at $59,445. Pursuant to the April 2006 consulting
      agreement, the Company issued 625,000 shares of restricted common stock to
      this
      individual resulting in charges to operations of $206,250.





On
      May
      16, 2006, the Company issued 300,000 shares of restricted common stock to an
      accredited investor for gross proceeds of $81,000.





On
      May
      17, 2006, the Company issued 40,000 shares of restricted common
      stock ** to
      an
      employee in payment of a previously accrued vacation liability of $9,918 charged
      as compensation.





On
      September 20, 2006, the Chief Executive Officer purchased 40,000 shares (valued
      at $13,200) of restricted common stock for gross proceeds of $10,000, resulting
      in a charge to operations for officer compensation of $3,200..





In
      September 2006, employees exercised stock options for an aggregate of 40,000
      shares valued at $13,200, resulting in a charge to operations for compensation
      of $7,200.





In
      September 2006, the Company issued 132,246 shares of restricted common stock
      to
      Devendar S. Bains as reimbursement for legal fees of the Company personally
      paid
      by him with common shares in 2003, resulting in a charge to operations of
      $46,286.





In
      November 2006, pursuant to a subscription agreement dated September 26, 2006,
      the Company issued 200,000 shares of restricted common stock to Joseph Nordgaard
      (the now former CEO) for $.20 per share for aggregate gross proceeds of
      $40,000.





Net
      cash
      proceeds received by the Company from private placements of restricted common
      stock were $1,429,001 for the year ended December 31, 2006, compared to
      $1,067,000 during the year ended December 31, 2005. As of December 31, 2006
      the
      Company had 36,928,293 shares of common stock issued and outstanding, compared
      to 23,338,267 shares outstanding as of December 31, 2005.


-F21-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


5.  Amendment
      to Certificate of Designation of Preferred Shares




In
      May
      2006, the Company's certificate of designation for the preferred shares was
      amended whereby the liquidation preference was corrected to be $2 per preferred
      share rather than the incorrect $750,000 per share in the original
      certificate.





6.  Preferred
      and Common Stock Restricted under Rule 144




All
      preferred shares and all shares referred to as restricted common stock are
      governed by SEC Rule 144 and cannot be sold unless they are registered pursuant
      to the Securities Act of 1933, as amended, or if such sale is pursuant to a
      valid exemption from registration.





**NOTE
      D - STOCK OPTION PLANS**





An
      option
      and stock appreciation rights (SARs) plan was authorized prior to the public
      offering whereby options could be granted to purchase no more than 1,500,000
      shares of common stock at exercise prices no less than fair market value as
      of
      date of grant. At the 2001 Annual Shareholders' Meeting, the maximum number
      of
      shares set aside for this plan was increased to 2,225,000. By majority consent
      of the shareholders in August 2005, the maximum number of shares set aside
      for
      this plan was increased to 5,000,000 and the plan was extended for an additional
      10 year period. Under the plan, employees and directors may be granted options
      to purchase shares of common stock at the fair market value at the time of
      grant. Options generally vest in three years and expire in four years from
      the
      date of grant. 2,850,000 options remained outstanding at December 31,
      2006.





The
      Company has elected to follow Accounting Principles Board Opinion (APB) No.
      25,
      Accounting for Stock Issued to Employees, and related Interpretations in
      accounting for its stock options. Under APB No. 25, if the exercise price of
      the
      Company's employee stock options equals the market price of the underlying
      stock
      on the date of grant, no compensation expense is recognized. SFAS No. 123,
      Accounting for Stock-Based Compensation, requires presentation of pro forma
      net
      loss and loss per share as if the Company had accounted for its employee stock
      options granted under the fair value method of that statement. For purposes
      of
      pro forma disclosure, the estimated fair value of the options is amortized
      to
      expense over the vesting period.





Prior
      to
      adoption of SFAS 123(R) the Company used intrinsic-value method of accounting
      for stock based-awards granted to employees. No stock-based compensation cost
      is
      included in the net loss for the year ended December 31, 2005 as no options
      were
      granted to employees during that period. All stock-based compensation during
      the
      year ended December 31, 2006 was paid in the form of restricted common
      stock.


-F22-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


Stock
      option activity during 2006 and 2005, is summarized below:





Shares
                of common stock attributable to options
            
            Weighted
                average exercise price of optionsUnexercised
                at December 31, 2004
            
            
            1,720,000
            
            $
            0.398Expired
                at December 31, 2005 (as restated)
            
            
            (320,000
            )
            
            1.474Unexercised
                at December 31, 2005 (as restated)
            
            
            1,400,000
            
            
            0.152Issued
                during 2006
            
            
            1,450,000
            
            
            0.228Unexercised
                at December 31, 2006
            
            
            2,850,000
            
            
            0.185





The
      following table summarizes information concerning outstanding and exercisable
      options, including warrants issued to officers, at December 31,
      2006:




Options
                Outstanding
            
            Options
                ExercisableExercise
                Prices
            
            Number
                outstanding at period end
            
            Weighted
                average remaining contractual life
            
            Weighted
                average exercise price
            
            Number
                exercisable at period end
            
            Weighted
                average exercise price$0.150
            
            
            1,300,000
            
            
            2.4
                years
            (1)
            $
            0.150
            
            
            1,350,000
            
            $
            0.1500.200
            
            
            200,000
            
            
            3.0
                years
            
            
            0.200
            
            
            200,000
            
            
            0.1500.370
            
            
            300,000
            
            
            3.0
                years
            
            
            0.370
            
            
            300,000
            
            
            0.3700.200
            
            
            1,000,000
            
            
            9.5
                years
            
            
            0.200
            
            
            1,000,000
            
            
            0.2000.200
            
            
            50,000
            
            
            0.25
                years
            
            
            0.200
            
            
            50,000
            
            
            0.2002,850,000
            
            
            
            
            
            
            
            
            2,900,000





(1)  Expiration
      date extended from May 1, 2000 to May 31, 2004 and was re-priced on April 9,
      2003 from $4.00 to $.15 per share and was extended again to May 31, 2009 at
      $.15
      per share.




**NOTE
      E - INCOME TAXES**





Temporary
      differences and carryforwards give rise to deferred tax assets and liabilities.
      The principal components of the deferred tax assets relate to net operating
      loss
      carryforwards. At December 31, 2006, the Federal net operating loss
      carryforwards are approximately $18,000,000. The net operating loss
      carryforwards expire at various dates through 2025, and because of the
      uncertainty in the Company's ability to utilize the net operating loss
      carryforwards, a full valuation allowance of approximately $6,200,000 and
      $5,600,000 has been provided on the deferred tax asset at December 31, 2006
      and
      2005, respectively.





The
      Company participated in the New Jersey Technology Tax Certificate Transfer
      Program, whereby
      net operating loss carryforwards generated in New Jersey can be sold to other
      qualified companies. During 2006 and 2005, the Company received $NIL and
      $73,126, respectively, from the sale of such net operating losses. As a result
      of these transactions, the New Jersey net operating loss carryforwards are
      limited to the current year loss of approximately $1,300,000 at December 31,
      2006.


-F23-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


Internal
      Revenue Code Section 382 places a limitation on the utilization of Federal
      net
      operating loss and other credit carryforwards when an ownership change, as
      defined by the tax law, occurs. Generally, this occurs when a greater than
      50
      percentage point change in ownership occurs. Accordingly, the actual utilization
      of the net operating loss carryforwards and other deferred tax assets for tax
      purposes may be limited annually under Code Section 382 to a percentage (about
      5%) of the fair market value of the Company at the time of any such ownership
      change.





The
      Company's tax provision for 2006 and 2005 is principally due to the impact
      of
      state income and minimum taxes.





**NOTE
      F - COMMITMENTS AND OTHER COMMENTS**





1.
      OPERATING LEASES





During
      July 2000, the Company entered into a lease agreement for approximately 11,000
      square feet of office and manufacturing space, for a five-year period ending
      July 13, 2004. The annual rental was $71,000 plus the Company's share of real
      estate taxes, utilities and other occupancy costs. The landlord held a security
      deposit of $35,625 representing approximately 6 months rent.





In
      July
      2004, Tek, Ltd. ("Tek") a company wholly owned by John Lee, entered into a
      contract with the existing landlord of the operating premises to purchase the
      building. In connection therewith, Tek negotiated a return of the security
      deposit and accumulated interest thereon to the Company in the aggregate amount
      of $40,160. The Company was leasing the premises on a month to month basis
      and
      paying rent on a semi-monthly basis. On April 22, 2005, concurrent with the
      closing of the purchase of the building by Tek, the Company entered into a
      non-cancelable operating lease with Tek which commenced on June 1, 2005 and
      expires on May 31, 2008. Tek is holding a security deposit of $5,500 in
      connection with this lease. The Company is obligated for minimum annual rental
      payments as follows:




Year
                ending December 312007
            
            $
            72,0002008
            
            
            30,000102,000





Rent
      expense, including the Company's share of real estate taxes, utilities and
      other
      occupancy costs, was $74,750 and $73,417 (of which $38,500 was in connection
      with the lease with Tek) for the years ended December 31, 2006 and 2005,
      respectively.


-F24-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


2.
      401(K)
      PLAN





During
      1996, the Company established a defined contribution plan, the Wi-Tron, Inc.
      401(k) Plan. The Company makes no contributions. All employees with greater
      than
      six months' service with the Company were eligible to participate in the plan.
      The plan is administered by a third party.





3.
      DELAWARE CORPORATE STANDING





The
      Company is delinquent in the filing of Delaware franchise tax reports and,
      accordingly, the corporation is not in good legal standing in the State of
      Delaware.





4.
      FEDERAL TAX LIENS





On
      January 18, 2005, the Internal Revenue Service filed a federal tax lien with
      the
      County Clerk of Somerset County, New Jersey, in the amount of $35,663. Since
      that date, the Company continued to be delinquent on additional tax periods
      and
      paid off some back periods. Consequently, more liens were filed by the
      government while several were released. These liens attach to all property
      currently owned by the Company as well as all property it may acquire in the
      future, until the liens are satisfied. The Company paid all related liabilities
      connected with these liens during the year ended December 31, 2006.





5.
      NOTES
      PAYABLE CONVERTIBLE INTO COMMON STOCK AT HOLDERS' OPTION





In
      March
      2003, two investors, each of which already own approximately 4% of the Company's
      outstanding common stock, loaned the Company $20,000. The terms of each loan
      provide for 6% interest and were due in March 2005 with accrued interest. By
      their terms, the loans provide for accelerated payment under certain conditions,
      and conversion prior to maturity into the Company's common stock at the holders
      option at the rate of $.10 per share. At December 31, 2005, all loans were
      converted.





The
      Company did not make the required payments due March 31, 2005 under the notes,
      for principal and interest. On June 27, 2005, the Board of Directors resolved
      to
      issue 185,000 of restricted common stock to each note holder (370,000 shares
      in
      total) at a revised conversion price of $.06 per share. The 370,000 restricted
      shares were issued on July 26, 2005 in full settlement of the notes payable
      of
      $22,773. Accordingly, the Company recorded a non-cash debt conversion charge
      of
      $21,627, based on the difference of the value of the restricted shares issued
      at
      the discounted price of $.12 per share at June 27, 2005 ($.20 per share
      discounted by 40% for lack of marketability of restricted shares) in excess
      of
      the face amount of the debt obligation.





**NOTE
      G - OFFICER LOANS**





1.  Officer
      Loans and Employment Agreements




As
      of
      December 31, 2006, the Company owes $150,000 to Devendar S. Bains, a former
      Chief Executive
      Officer for loans. This balance due is non-interest bearing and is secured
      by
      warrants to purchase 750,000 shares of common stock at $.20 per share,
      exercisable through September 2009 . The balance of $150,000 (after payment
      of
      $50,000 made in September 2006) is payable in three quarterly installments
      of
      $50,000 through September 2007. Each installment payment requires the surrender
      and cancellation of 250,000 warrants. 250,000 warrants were surrendered and
      cancelled in September 2006 concurrent with the $50,000 payment.


-F25-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


On
      June
      27, 2005, the Board of Directors resolved to enter into new employment
      agreements with Devendar S. Bains and Tarlochan S. Bains to settle the liability
      for unpaid salaries. In September 2006, that resolution was memorialized in
      employment agreements as follows:





(i)  Devendar
      S. Bains - (employment agreement dated September 1, 2006) in settlement of
      the
      liability for accrued and unpaid salaries, the Company agreed to:




a.
            issue
                a three year warrant for the purchase of 1,000,000 shares common
                stock
                exercisable at $.20 per share (the "Warrant"), with 750,000 remaining
                outstanding at December 31, 2006;




b.
            pay
                the amount of $200,000 in full settlement of the debt due him from
                the
                Company, payable in quarterly installments of $50,000 starting September
                30, 2006 through June 30, 2007, with $150,000 remaining outstanding
                at
                December 31, 2006;




c.
            cancel
                250,000 warrants for each $50,000 quarterly installment paid (250,000
                were
                canceled concurrent with the September 2006
                payment);




d.
            provide
                the right to exercise the warrants periodically in lieu of receiving
                the
                quarterly cash payments;




e.
            offer
                continued employment with the Company for a term of three (3) years
                at a
                salary of $80,000 per year; and




f.
            revert
                to a consulting agreement at a monthly amount of $5,000 for 12 months
                upon
                the payment in full of the $200,000 debt settlement (following the
                last
                $50,000 quarterly payment). As a consultant, the customary benefits
                allowed under his regular employment will be
                retained.





As
      a
      result of the employment agreement with Devendar S. Bains, the face amount
      of
      the loan balance of $345,843 immediately prior to the settlement exceeded the
      minimum cash settlement amount of $200,000 by $145,843. The excess was credited
      to additional paid-in capital. The current value of the warrants (based on
      the
      current trading prices of the underlying common stock) that secure this
      liability is less than the minimum cash settlement amount of $200,000.
      Accordingly, the contribution to additional paid-in capital was measured by
      the
      minimum cash settlement amount of $200,000.





Devendar
      S. Bains beneficially owns 1,050,000 stock options (50,000 of which are owned
      by
      his wife) that have been extended until May 2008, and are otherwise not affected
      by this settlement.





(ii)  Tarlochan
      S. Bains - (employment agreement dated July 1, 2005) in settlement of the
      liability for accrued and unpaid salaries, the Company agreed to (a) issue
      500,000 shares of restricted common stock valued at $185,000, (b) enter into
      an
      employment agreement at $80,000 per year, (c) issue 300,000 incentive
      stock options exercisable at $.20 per share pursuant to the 2005 Plan valued
      at
      $61,695, and (d) issue 200,000 non-qualified stock options which vest
      immediately and are exercisable at $.20 per share valued at $48,760, with an
      unspecified number of additional options to be issued over the next two years
      at
      exercise prices to be determined by the Board of Directors in accordance with
      the 2005 Plan at the time of issuance. Accordingly, the Company has reflected
      aggregate officer compensation charged to operations of $223,879 (the value
      of
      the shares and options of $274,890 less the face amount of the loan balance
      of
      $51,110).


-F26-
 **WI-TRON,
          INC.**
 **Notes
          to Financial Statements**
 **December
          31, 2006 and 2005**


2.  Other
      Related Party Transactions




As
      of
      December 31, 2006, accounts payable includes $69,636 due to Tek, Ltd. ("Tek"),
      a
      company wholly owned by John C. Lee. Additionally in 2006, Tek loaned the
      Company $44,500. between the accounts payable and the loan, the Company owes
      Tek
      114,136 as of December 31, 2006. During the year ended December 31, 2006. Tek,
      Ltd. made purchases of parts, supplies, services and equipment rentals on behalf
      of the Company for a total of $73,092 and incurred rent to Tek, Ltd of
      $69,000.





**NOTE
      H - LITIGATION**





From
      time
      to time, the Company is party to what it believes are routine litigation and
      proceedings that may be considered as part of the ordinary course of its
      business. Except for the proceedings noted below, the Company is not aware
      of
      any pending litigation or proceedings that could have a material effect on
      the
      Company's results of operations or financial condition.





1.  A
      customer filed a complaint in the Circuit Court of the Eighteenth Judicial
      District of the State of Florida on January 23, 1997 alleging breach of
      contract. During 2000, the Company settled with that customer at a cost of
      $175,000; $25,000 is to be paid quarterly over two years. $95,000 remained
      unpaid at December 31, 2006.





2.  In
      April
      2004, a law firm filed a judgment against the Company in the amount of
      approximately $40,000 in connection with non-payment of legal fees owed to
      it.
      Inasmuch as this is a perfection of an already recorded liability, management
      does not believe that the judgment will have a material impact on the financial
      position of the Company. In March 2005, a settlement was reached whereby the
      Company made a down payment of $2,500 and agreed to pay the balance in 24 equal
      monthly installments of approximately $1,600. The last payment made was in
      November 2006 and the Company is in default of the settlement agreement. There
      is a remaing balance of $7,917 as of December 31, 2006.





3.  In
      June
      2004, the Company entered into a Settlement Agreement with Wayne Fogel, et
      al,
      before the United states District court in Tampa, Florida. The settlement
      provided for, among other obligations, issuance of 250,000 shares of restricted
      common stock by July 14, 2004. On November 8, 2005, 250,000 shares were issued
      in connection with this settlement.


-F27-


**NOTE
      I - SUBSEQUENT EVENTS**





On
      January 11, 2007, John Lee converted 125,000 shares of their preferred stock
      into 12,500,000 shares of common stock.





On
      January 11, 2007, Jessica Lee converted 6,000 shares of their preferred stock
      into 600,000 shares of common stock.





As
      a
      result of such preferred stock conversion, as of January 11, 2007, the
      Registrant had 50,028,293 shares of Common Stock and no shares of preferred
      stock issued and outstanding.





On
      January 2, 2007, Joseph Nordgaard resigned his position of Chief Executive
      Officer and Director. Mr. Nordgaard agreed to remain with the Registrant
      initially as an unpaid business development advisor and agreed to negotiate
      formal terms at some future point if the relationship was beneficial to both
      parties.




-F28-


**Item
      14:**





*Audit
      fees*





Aggregate
      fees bills by the Company’s principal accountant were $51,052 in 2006 and
      $41,092 in 2005.





*Audit-Related
      Fees*





There
      were no audit related fees in 2006.





*Audit
      Committee Policies and Procedures for Pre-Approval of Services*





The
      audit
      committee is in the process of formulating procedures for pre-approval of all
      audit, review and attest services and non-audit services.




38


**SIGNATURES**





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


WI-TRON,
                INC.By:
            /s/
              John
              C. LeeName:
John
              C. LeeTitle:
              Chief Executive Officer, and Director




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


Signature
              
              Title
              
              Date/s/
                  John C. LeeJohn
                  C. Lee
              
              Chief
                  Executive Officer
              
              May
                  17, 2007/s/
                  Tarlochan S. BainsTarlochan
                  S. Bains
              
              Vice
                  President and Director
              
              May
                  17, 2007/s/
                  Mikio Tajima
              
              Director
              
              May
                  17, 2007Mikio
                  Tajima




39