UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



Form 10-KSB



(Mark one)

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2007



Commission file number: 0-26307





Nettel Holdings, Inc.

(Exact name of small business issuer as specified in its charter)



|Florida                                                        | 65-0827278                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)



12655 SW Center Street, Beaverton, Oregon  97005

(Address of principal executive offices)  (Zip Code)



360-369-6367

(Issuers telephone number)





Securities registered under Section 12(g) of the Exchange Act:

Common Stock, Par Value $.01

(Title of class)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the 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. [ ]



Issuers revenues for its most recent fiscal year: $21,505,122.



As of March 31, 2008, there were 53,679,833 shares of the issuer's common stock issued and outstanding. There is only a limited trading market in the shares of the issuers common stock at the date of the filing of the Form 10-KSB. Affiliates of the Issuer own 13,576,290 shares of the Issuer issued and outstanding common stock. 40,103,543 shares are held by non-affiliates. Affiliates for the purposes of this Annual Report refer to the officers, directors and/or persons or firms owning 5% or more of Issuers common stock, both of record and beneficially and affiliates thereof.



If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., PartI, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 31, 2007). No documents are incorporated by reference.



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TABLE OF CONTENTS





PART I



Item 1. Description of Business

Item 2. Description of Property

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders



PART II



Item 5. Market for Common Equity and Related Stockholder Matters

Item 6. Management's Discussion and Analysis

Item 7. Financial Statements

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



PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Beneficial Owners and Management

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits and Reports on Form 8-K

Item 14. Control and Procedures



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PART I



ITEM 1.    DESCRIPTION OF BUSINESS.



Safe Harbor Statement



This Form 10-KSB contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions that are not statements of historical facts. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intends," "estimates," "forecast," "project" and similar expressions identify forward-looking statements.



The forward-looking statements in this document are based upon various assumptions, many of which are based on management's discussion and analysis or plan of operation and elsewhere in this report. Although we believe that these assumptions were reasonable when made, these statements are not guarantees of future performance and are subject to certain risks and uncertainties, some of which are beyond our control, and are difficult to predict. Actual results could differ materially from those expressed in forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect management's view only as of the date of this report. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequence events or circumstances. Readers are also encouraged to review the Company's publicly available filings with the Securities and Exchange Commission.



General



On May 1, 2003, the Board of Directors declared a fifty to one reverse stock split of the Company's common stock. An amount equal to the par value of the common shares affected by the reverse split was transferred from the common stock account to the additional paid-in capital account. All references to number of shares, except shares authorized, and to per share information in the consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis.



On May 23, 2003, the Company entered into an Agreement of Merger with NetTel Globalcommunication, Inc. ("NetTel"), a Delaware corporation. Pursuant to the Merger Agreement, the Company issued 10,596,290 shares of its common stock to the NetTel's shareholders in exchange for all the issued and outstanding shares of the NetTel's common stock and issued 2,250,000 shares of its common stock to consultants facilitating the merger transaction.



The merger of the Company with NetTel has been accounted for as a reverse acquisition under the purchase method of accounting since the shareholders of NetTel obtained control of the consolidated entity. Accordingly, the merger of the two companies has been recorded as a recapitalization of the NetTel, with NetTel being treated as the continuing entity. The continuing company has retained December 31 as its fiscal year end. The historical results for the year ended December 31, 2003 include NetTel and the Company (from the acquisition date), while the historical results for the year ended December 31, 2002 include only the NetTel.



At a board meeting duly called and held on May 23, 2003, authorized and approved the change of the name of the Company from Bio Standard Corporation to Nettel Holdings, Inc. The Company's new symbol "NTTL" became effective on May, 2003.



NetTel began operations in March 2001 selling wireless communication devices and service activation with various providers.  During 2002, the Company began reselling used computer equipment and providing retail internet access. In April 2003, the Company discontinued retail wireless and internet access sales. Additionally, the Company began development of telecommunications software as well as a web security and financial software packages. In July 2003, the Company began marketing telecommunication minutes to a limited test market. In October 2003, in response to requests from customers concerned about technical support and customer service, the Company suspended telecommunication sales and marketing efforts to upgrade the infrastructure. In August 2004 the Company began selling telecommunication minutes and prepaid calling cards to the wholesale market using its upgraded technology to a limited test market.  In April 2005, the Company began providing service to major suppliers and carriers.

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The Company is currently pursuing three businesses areas:



Telecommunications Services



Wholesale Telecommunication Minute Sales



The Company purchases telecommunication minutes directly form in-country telecom companies and resells these minutes to worldwide carriers.  The Companys software system routes minutes from buyer to seller and monitors systems loads and payment settlements.  We sell the majority of our minutes to tier 1 carriers worldwide.



Advanced Voice Order Processing



AVOP Direct acts as a single point of contact, posting the rate each carrier charges to terminate calls in its country and then offers those rates to all other carriers who wish to terminate the calls.



By joining AVOP Direct, carriers and service providers will be able to avoid the time and expense of negotiating and managing one-time agreements with other carriers or telecom providers.



AVOP Direct handles routing management, settlements, billing and administration, allowing carriers to save on staff and administration costs. Here are a few key features with AVOP Direct that set us apart from hard to deal with typical exchanges, and their procedures:



Any destinations posted on AVOP Direct can be purchased immediately.

Instant Financial Settlement for seller.



Buyers would be able to view not only the rates but also in real time ASR, PDD, ACD, and Voice Quality ratings. This is very important because most of the time, rate is not the only factor in deciding which carrier to purchase from. As long as the buyer maintains a positive account balance, they could at any time be able to immediately purchase and use any minutes that are posted in our exchanges.



We have made purchasing minutes from AVOP Direct very simple. To purchase any route listed on AVOP Direct, buyer would simply enter the Route ID + Country Code + City Code in to the dialing plan. Members will be able to view CDR in real time, review all account information, network information, and settlement data. They will now be able to furnish a computerized summation from start to finish!



Sales and marketing began in 2005.



Voice over Internet Protocal ("VoIP")



The Company is a cutting edge telephony company in the exploding VoIP industry. Planned products and services include residential and commercial long distance, prepaid calling card, PC to phone, unified messaging, and teleconferencing.



The VoipXchange.net division of the Company has partnered with major VoIP network termination partners worldwide to access their network infrastructure. This allows VoipXchange.net to provide high-quality, low-cost any-distance'' call termination to over 250 countries and territories. We operate our own, or in cooperation with other providers, a network of VoIP gateways throughout the world. These gateways are located mostly in difficult-to-reach countries or regions and provide local termination of international calls. VoipXchange.net offers this service to any international carrier, which is interested in reliable and inexpensive completion of its traffic to the VoipXchange.net's On-Net destinations.



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Telecommunication Products and Service Summary:



Gateway Termination for ITSP



The Company plans to market its IP telephony services to other international long distance carriers and wholesale customers that have a need for large blocks of long distance telephone time between selected locations. Although margins at the wholesale level are lower than retail margins, the sale of blocks of long distance time to other carriers will enable The Company to generate revenues with only a limited number of Gateways installed. The company is in the process of pre-marketing its services and has identified several potential wholesale resellers of block minutes.



Broadband Telephone  Local Phone Services  Domestic and International Market



SIPZOO is a comprehensive global Broadband Telephone service.  SIPZOO Broadband Telephone service uses a technology called Voice-over-IP to allow consumers to make and receive calls.  However, with SIPZOO a computer is not required to make or receive the calls.  The only requirement to use the service is a DSL or Cable Internet connection and an ATA (Analog Terminal Adapter).  An ATA adapter can be provided by SIPZOO. To use the service the customer plugs one end of the ATA device into a telephone and the other end into the broadband service; the customer will immediately get a regular dial tone. SIPZOO provides customers with a local U.S telephone number which includes many call options such as Call Forwarding, Caller ID, Three-way calling, Call Transfer, Call Waiting, Call Return, , Speed Dial, Anonymous Call Rejection, Hunt group, and Voicemail



Unified Messaging  FaxZoo



To Receive Faxes:  The customers receive a FaxZoo local U.S or International telephone number.  Faxes received are automatically forwarded to the customers personal computer as an email attachment. The customer can also forward the email to a fax machine.



Receive Voice Messages:  SIPZOO will automatically forward voice messages to the customer PC via email.  The customer can listen to them on the computer over the internet.



Web to Fax:  A web page enables registered users to fax from any browser from any location.



PC to Fax:  PC to fax acts like a printer on the customers PC. PC to Fax enables the customer to fax any document they can print. PC to fax also provides for real-time status reporting of each fax sent on the customers PC and offers additional features such as an address book and resend capabilities.



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Computer Equipment Sales



The Nettel Trading division of the Company is currently exporting qualified computer electronics equipment. The Company established connections and cooperative relations with over 1,000 companies in more than 40 countries and regions in the world. Through these important connections the Company plans to expand into other importing and exporting activities, but has no agreements or contracts at this time.



Software Programming



The Entec division is currently developing Accounting, Finance, Project Management, Inventory System, Database Management, Presentation Tools, E-mail, Voice Recognition, and Word Processing software that will have an entry level price point ranging from $9.95 to $49.95 U.S. dollars.



Entec Voice XML is a next generation telecom application service provider. The Company will provide customers with value-added voice services that are unique in their user utility, ease of application and use, presentation to users and cost advantage. Talking Technologies is making IVR technology more affordable and accessible to customers through standards-based technology. Talking Technologies next-generation IVR -- using VoiceXML enables companies to easily and quickly deploy automated phone services that can improve employee productivity, reduce costs, increase customer satisfaction, and create new revenue opportunities. This IVR allows companies to extend existing or new Web applications to be accessible by any phone at the lowest total cost of ownership. Entec games division is a developer of interactive entertainment software and technology for a variety of consoles and computer platforms.





Employees



As of December 31, 2007, the Company had three employees working in the Portland office; two administrative and one engineer. The Company also has approximately sixty software engineers, system monitors and customer service personnel contracted through a company in Vietnam.  Additionally, the Company has contracts for consulting services with six development engineers in the U.S.

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RISK FACTORS



You should carefully consider the following risks relating to our business and our common stock, together with the other information described elsewhere in this Form 10-KSB. If any of the following risks actually occur, our business, results of operations and financial condition could be materially affected, the trading price of our common stock could decline, and you might lose all or part of your investment. We have experienced losses and we expect future losses and we may not become profitable.



*

We may not be able to expand our revenue and achieve profitability.  Our future success depends on the growth in the use of the internet as a means of communications.

*

If we fail to establish marketing relationships that provide us visibility, we may not be able to sufficiently increase our sales.

*

We may be unable to manage our expansion and anticipated growth effectively.

*

Intense competition could reduce our market share and harm our financial performance.

*

Our network may not be able to accommodate our capacity needs.

*

We face a risk of failure of computer and communications systems used in our business. Our computer systems and operations may be vulnerable to security breaches.

*

Our services may infringe on the intellectual property rights of others.

*

Operating internationally exposes us to additional and unpredictable risks.



ITEM 2.    DESCRIPTION OF PROPERTY



In May 2007, the Company leased 1,300 square feet of office space at 12655 SW Center Street, Beaverton, Oregon. We believe that our office space is adequate for our current needs.





ITEM 3.    LEGAL PROCEEDINGS



There are no legal proceedings presently pending or threatened against the Company.



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



None.





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PART II



ITEM 5.    MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS



(A) Market Information



Our shares of common stock are traded over-the-counter in what is referred to as the OTC: Bulletin Board under the symbol NTTL. As of March 31, 2008, there were 16 market makers submitting quotations on the OTC:BB. However, the trading volume during the past months has been sporadic. The following information with respect to the high and low bid price of our shares was obtained from the National Quotation Bureau. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. In May 2002, our shares were subject to a one for ten recapitalization and in May 2003, our shares were subject to one for fifty recapitalization. The table below reflects such information.



|                                   |       |      
|---------------------------------- | ----- | -----
|                                   | High  | Low  
|Fiscal Year 2006                   |       |      
|First Quarter Ending March 31,     | $0.11 | $0.11
|Second Quarter Ending June 30,     | $0.11 | $0.10
|Third Quarter Ending September 30, | $0.09 | $0.08
|Period Ending December 31,         | $0.11 | $0.10
|Fiscal Year 2007                   |       |      
|First Quarter Ending March 31,     | $0.74 | $0.10
|Second Quarter Ending June 30,     | $074  | $0.42
|Third Quarter Ending September 30, | $0.58 | $0.30
|Period Ending December 31,         | $0.38 | $0.18
|Fiscal Year 2008                   |       |      
|First Quarter Ending March 31,     | $0.18 | $0.17





(B) Holders

As of March 31, 2008, there 116 were shareholders.



(C) Dividends



Holders of common stock are entitled to dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore. The Company has never paid cash dividends on its common stock. The Board of Directors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of the Company's businesses.



( 1) We relied upon Section 4(2) of the Act as the basis for the exemption from the registration requirements of the Act and there was no public solicitation involved. The shares of restricted common stock were sold to private investors. All recipients either received adequate information about the Company or had access, through employment or other relationships, including business and personal relationships with the Company's management to such information.



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ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations



The Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006



The Company's net revenues for the year ended December 31, 2007 were $21,505,122 compared to $7,832,916 for the year ended December 31, 2006. All revenues for 2007 were from telecommunication minutes sales.  For the year ended December 31, 2006, telecommunication minute sales were $7,486,296 and used equipment sales were $467,500.



Gross margin was 5.1 percent of revenue for the telecommunication sales for year ended December 31, 2007 compared to 7.1 percent for the same period ended December 31, 2006.  The sales in 2007, which were a 287% increase over 2006, were at competitive rates with realistic long-term gross margins. The gross margin on used equipment sales for the year ended December 31, 2006 was 50% related primarily to one high margin sale in 2006 that is not likely to reoccur.



Operating expenses consisting primarily of research and development expense and general and administrative expense increased $3,797,270 to $5,267,460 for the year ended December 31, 2007 compared to $1,470,190 for the same period ended December 31, 2006. Research and development expense was $3,096,675 for the year ended December 31, 2007 compared to $1,090,332 in the same period in 2006. These costs are primarily personnel and consulting costs for engineers upgrading and maintaining software. $2,696,391 of this expense was a non-cash charge for the market value of the Company's common stock issued to engineers for their services during the year ended December 31, 2007 as compared to $710,201 for the year ended December 31, 2006. The $2,006,373 increase in 2007, relates to software upgrades and maintenance to accommodate the 287% increase in sales in 2007.  Additionally, approximately $1,000,000 of the non-cash charge for common stock issued to consultants was for a new generation of software that is still in the development stage.



General and administrative expense was $2,103,885 in the period ended December 31, 2007 as compared $369,904 for the same period ended December 31, 2006. The $1,733,988 increase in 2007 resulted primarily from $1,702,000 non-cash charge for the market value of the Companys common stock issued to investor relations consultants and the $25,000 fee paid to cancel the facilities lease which reduced the monthly facilities expense by 65%.  The new facilities, which have considerably less square footage, is more appropriate for the needs of the Company.



Liquidity and Capital Resources



The cash flow from operations for the year ended December 31, 2007 is primarily attributable to the net loss of $4,176,773 offset by the $4,444,706 non-cash charge for the common stock issued for services. The negative cash flow from operations in 2006 resulted from the net loss of $783,527 and the $449,827 decrease in customer deposits and deferred revenue which were recognized as revenue, offset by the $710,201 non-cash charges for common stock issued for services.



The Company invested $253,854 in property and equipment during the year ended December 31, 2007 compared to $2,236 for the same period ended December 31, 2006.  The equipment increase is for servers and related equipment for which installation is in process to accommodate higher sales volume.



The Company made a $60,000 payment on the outstanding loan balance in 2007.  Cash flow was provided by financing activities in 2006 from a $225,000 loan.



The Company has incurred an accumulated deficit as of December 31, 2007 of $11,144,484. As shown in the accompanying consolidated financial statements, the Company has incurred losses in years ended December 31, 2007 and 2006. The future of the Company is dependent on its ability to generate cash from operations. There can be no assurance that the Company will be able to implement its current operating plan.



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ITEM 7.    FINANCIAL STATEMENTS.



NETTEL HOLDINGS, INC

Consolidated Financial Statements

Years Ended December 31, 2007 and 2006







Contents



Page



Report of Independent Registered Public Accounting Firm

F-1



Financial Statements:



Consolidated Balance Sheet as of December 31, 2007

F-2



Consolidated Statements of Operations for the years ended

December 31, 2007 and 2006

F-3



Consolidated Statements of Stockholders' Equity (Deficit) for the years ended

December 31, 2007 and 2006

F-4



Consolidated Statements of Cash Flows for the years ended

December 31, 2007 and 2006

F-5



Notes to Consolidated Financial Statements

F-6









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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Stockholders and Board of Directors

Nettel Holdings, Inc.



We have audited the accompanying consolidated balance sheet of Nettel Holdings, Inc. as of December 31, 2007, and the related consolidated statements of operations, consolidated shareholders' Equity (Deficit), and consolidated cash flows for the years ended December 31, 2007 and 2006. These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nettel Holdings, Inc.  as of December 31, 2007, and the results of their operations and cash flows for the years ended December 31, 2007 and 2006 in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  During the year ended December 31, 2007, the Company incurred net losses of $4,176,773 and has accumulated deficit of $11,144,484 as of December 31, 2007.  These factors, among others, as discussed in Note 13 to the consolidated financial statements, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 13. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Kabani & Company, Inc.

Certified Public Accountants



Los Angeles, California



May 1, 2008



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|                           |                             |                                                               |                                            |         |             |             |           |  |  |  |  | 
|-------------------------- | --------------------------- | ------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | ----------- | --------- |  |  |  |  | 
|NETTEL HOLDINGS, INC.     
|CONSOLIDATED BALANCE SHEET
|DECEMBER 31, 2007         
|                          
|                           |                             |                                                               | ASSETS                                     |         |             |            
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           | CURRENT ASSETS:             |                                                               |                                            |         |             |            
|                           |                             | Cash & cash equivalents                                       |                                            | $       | 215,324     |            
|                           |                             | Accounts receivable, net                                      |                                            |         | 38,630      |            
|                           |                             | Prepaid expenses                                              |                                            |         |             | 695,007     |          
|                           |                             |                                                               | Total current assets                       |         |             | 948,961     |          
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           | PROPERTY AND EQUIPMENT, net |                                                               | 281,413                                    |        
|                           | Deposits                    |                                                               | 6,804                                      |        
|                           |                             |                                                               | TOTAL ASSETS                               |         |             | $           | 1,237,178 | 
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           |                             |                                                               | LIABILITIES AND STOCKHOLDERS' EQUITY       |         |             |            
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           | CURRENT LIABILITIES:        |                                                               |                                            |         |            
|                           |                             | Accounts payable                                              | $                                          | 148,510 |            
|                           |                             | Payroll liabilities                                           |                                            | 50,309  |            
|                           |                             | Accrued expenses                                              |                                            |         |             | 97,180      |          
|                           |                             | Customer Deposits                                             |                                            |         |             | 437,735     |          
|                           |                             | Notes payable                                                 |                                            |         |             | 165,000     |          
|                           |                             |                                                               | Total current liabilities                  |         | 898,734     |            
|                           |                             |                                                               |                                            |         |             |             |           | 
|                           | STOCKHOLDERS' EQUITY        |                                                               |                                            |         |            
|                           |                             | Preferred stock, $10 par value, 1,000 shares authorized,      |                                            |         |            
|                           |                             | 1,000 shares issued and outstanding                           |                                            | 10,000  |            
|                           |                             | Common stock, $0.001par value; 250,000,000 shares authorized; |                                            |         |            
|                           |                             | 51,607,119 shares issued and outstanding                      |                                            | 51,607  |            
|                           |                             | Additional paid-in capital                                    |                                            |         | 12,799,621  |            
|                           |                             | Shares issued for security deposit on equipment               |                                            |         | (1,313,000) |            
|                           |                             | Shares issued for future purchases                            |                                            |         | (65,300     | )          
|                           |                             | Deficit accumulated                                           |                                            |         |             | (11,144,484 | )        
|                           |                             |                                                               | Total stockholders' equity                 |         | 338,444     |            
|                           |                             |                                                               |                                            |         |             |            
|                           |                             |                                                               | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |         |             | $           | 1,237,178 | 



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



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|                                               |                                                       |                              |            |           |            |          
|---------------------------------------------- | ----------------------------------------------------- | ---------------------------- | ---------- | --------- | ---------- | ---------
|NETTEL HOLDINGS, INC.                         
|CONSOLIDATED STATEMENTS OF OPERATIONS         
|FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
|                                              
|                                               |                                                       |                              |            |           |            |          
|                                               |                                                       |                              |            | 2007      |            | 2006     
|                                               |                                                       |                              |            |           |            |          
|                                               | Net revenues                                          | $                            | 21,505,122 | $         | 7,832,916 
|                                               |                                                       |                              |            |           |            |          
|                                               | Cost of goods sold                                    |                              | 20,418,041 |           | 7,130,755 
|                                               | Gross profit                                          |                              | 1,087,081  |           | 702,161   
|                                               |                                                       |                              |            |           |            |          
|                                               | Operating expenses:                                   |                              |            |           |           
|                                               |                                                       | Research and development     |            | 3,096,675 |            | 1,090,332
|                                               |                                                       | Sales and marketing          |            | 66,900    |            | 9,954    
|                                               |                                                       | General and Administrative   |            | 2,103,885 |            | 369,904  
|                                               |                                                       | Total operating expenses     |            | 5,267,460 |            | 1,470,190
|                                               |                                                       |                              |            |           |            |          
|                                               | Loss from Operations                                  |                              | (4,180,379 | )         | (768,029) 
|                                               |                                                       |                              |            |           |            |          
|                                               | Other Income (Expense)                                |                              |            |           |           
|                                               | Gain on settlement of debt                            |                              | 28,152     |           | -         
|                                               | Interest Expense                                      |                              | (24,546    | )         | (15,498)  
|                                               |                                                       | Total Other Income (Expense) |            | 3,606     |            | (15,498) 
|                                               |                                                       |                              |            |           |            |          
|                                               | Net loss                                              | $                            | (4,176,773 | )  $      | (783,527) 
|                                               |                                                       |                              |            |           |            |          
|                                               | Basic and diluted net loss per share*                 | $                            | (0.09      | )  $      | (0.02)    
|                                               |                                                       |                              |            |           |            |          
|                                               | Basic and diluted weighted average shares outstanding |                              | 47,952,108 |           | 36,254,029



*  Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.





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



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|NETTEL HOLDINGS, INC.                                    
|---------------------------------------------------------
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
|FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|Balance at December 31, 2005                             
|Shares issued for services                               
|Shares issued for prepaid expense                        
|Net loss for the year                                    
|                                                         
|Balance at December 31, 2006                             
|Shares issued for services                               
|Shares issued in payment of debt                         
|Shares issued as a deposit on equipment                  
|Net loss for the year                                    
|                                                         
|Balance at December 31, 2007                             
|                                                         



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



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|----------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------- | --------- | --------- | --------- | --------- |  |  |  |  |  |  | 
|NETTEL HOLDINGS, INC.                                                  
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                  
|FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006                         
|                                                                        |                                                                                           |                                                     |                                        |          
|                                                                        |                                                                                           | 2007                                                |                                        | 2006     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                  
|                                                                        | Net loss                                                                                  | $                                                   | (4,176,773)                            | $         | (783,527)
|                                                                        | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                     |                                        |           | -        
|                                                                        |                                                                                           | Depreciation and amortization                       |                                        | 71,383    |           | 82,038   
|                                                                        |                                                                                           | Gain on extinguishment of debt                      |                                        | (28,152)  |           |          
|                                                                        |                                                                                           | Common shares issued for services                   |                                        | 4,444,706 |           | 710,210  
|                                                                        |                                                                                           | Amortized shares issued for prepaid expense         |                                        | -         |           | 200,700  
|                                                                        |                                                                                           | (Increase) decrease in current assets:              |                                        |           |           |          
|                                                                        |                                                                                           |                                                     | Accounts receivables                   |           | 24,522    |           | 119,008  
|                                                                        |                                                                                           |                                                     | Prepaid telecommunication minutes      |           | (400,438) |           | (65,489) 
|                                                                        |                                                                                           |                                                     | Deposits                               |           | (6,804)   |           | 2,200     | 
|                                                                        |                                                                                           | Increase (decrease) in current liabilities:         |                                        |           |           |          
|                                                                        |                                                                                           |                                                     | Accounts payable                       |           | 12,901    |           | (139,619)
|                                                                        |                                                                                           |                                                     | Accrued payroll and expense            |           | 20,949    |           | (42,743) 
|                                                                        |                                                                                           |                                                     | Customer deposits and deferred revenue |           | 435,385   |           | (449,827 
|                                                                        | Total Adjustments                                                                         |                                                     | 4,574,452                              |           | 416,469  
|                                                                        |                                                                                           | Net cash provided by (used in) operating activities |                                        | 397,679   |           | (367,058)
|                                                                        |                                                                                           |                                                     |                                        |          
|CASH FLOWS FROM INVESTING ACTIVITIES                                    |                                                                                           |                                                     |                                        |          
|                                                                        |                                                                                           | Acquisition of property & equipment                 |                                        | (253,854) |           | (2,236)  
|                                                                        |                                                                                           |                                                     |                                        |          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                  
|                                                                        |                                                                                           |                                                     | Proceeds from borrowings               |           | -         |           | 225,000  
|                                                                        |                                                                                           |                                                     | Principal payments on debt obligations |           | (60,000)  |           | (6,000)  
|                                                                        |                                                                                           | Net cash provided by (used in) financing activities |                                        | (60,000)  |           | 219,000  
|                                                                        |                                                                                           |                                                     |                                        |          
|NET INCREASE IN CASH & CASH EQUIVALENTS                                 |                                                                                           | 83,825                                              |                                        | (150,294)
|                                                                        |                                                                                           |                                                     |                                        |          
|CASH & CASH EQUIVALENTS, BEGINNING BALANCE                              |                                                                                           | 131,499                                             |                                        | 281,793  
|                                                                        |                                                                                           |                                                     |                                        |          
|CASH & CASH EQUIVALENTS, ENDING BALANCE                                 | $                                                                                         | 215,324                                             | $                                      | 131,499  
|                                                                        |                                                                                           |                                                     |                                        |          
|                                                                        |                                                                                           |                                                     |                                        |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                       |                                                                                           |                                                     |                                        |          
|                                                                        | Interest paid                                                                             | $                                                   | -                                      | $         | -        
|                                                                        | Income taxes                                                                              | $                                                   | -                                      | $         | -        
|                                                                        |                                                                                           |                                                     |                                        |          
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |                                                                                           |                                                     |                                        |          
|Common shares issued to extinguish debt                                 | $                                                                                         | 8,610                                               | $                                      | -        
|Common shares issued as a deposit                                       |                                                                                           | 1,313,000                                           |                                        | 266,000  



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



---



NETTEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006





1.

DESCRIPTION OF BUSINESS



NetTel Globalcommunication, Inc. (NetTel) was incorporated on December 10, 1999 in the state of Delaware.  On May 23, 2003, the NetTel entered into an Agreement of Merger with Nettel Holdings, Inc. (formerly Bio Standard Corporation), (the Company), a Florida corporation. Pursuant to the Merger Agreement, the Company issued 10,596,290 shares of its common stock to the NetTels shareholders in exchange for all the issued and outstanding shares of the NetTels common stock and issued 2,250,000 shares of its common stock to consultants facilitating the merger transaction.



The merger of the Company with NetTel was accounted for as a reverse acquisition under the purchase method of accounting since the shareholders of NetTel obtained control of the consolidated entity. Accordingly, the merger of the two companies was recorded as a recapitalization of the NetTel, with NetTel being treated as the continuing entity. The continuing company has retained December 31 as its fiscal year end.



In October, 2003, the Company created a wholly owned subsidiary in the State of Delaware by the name of Entec Software, Inc. (ENTEC). There are currently no operations in ENTEC.



In October, 2005, the Company created another wholly owned subsidiary in the State of Delaware by the name of IPXC, Inc (IPXC).



Business operations



The Company primary operations are the purchase of telecommunication minutes directly from in-country telecom companies and then resell these minutes to worldwide carriers.  The Companys software system routes minutes from buyer to seller and monitors systems loads and payment settlements.



---



2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS



Use of estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Cash and cash equivalents



The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. The Company maintains its cash in bank deposit accounts that may exceed federally insured limits. The company has not experienced any losses in such accounts.



Allowance for doubtful accounts



In determining the allowance to be maintained, management evaluates many factors including industry and historical loss experience.  The allowance for doubtful accounts is maintained at an amount management deems adequate to cover estimated losses.  Allowance for doubtful accounts is $106,399 as at December 31, 2007.



Property & Equipment



Capital assets are stated at cost. Depreciation of equipment is provided using the straight-line method over the estimated useful lives (3 years) of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. Expenditures for maintenance and repairs are charged to expense as incurred.



Long-lived assets



In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company reviews the carrying value of its long-lived assets to assess recoverability and impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An evaluation of the recovery of the long-lived assets was performed as of the year ended December 31, 2007. No impairments were recorded for the years ended December 31, 2007 and December 31, 2006.



Revenue Recognition



Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. The Company recognizes revenue from telecommunications and internet services as services are provided; the Company recognizes sales from equipment when, price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured.

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as deferred revenue. Deferred revenue (customer deposits) as of December 31, 2007 is $437,735.



Cost of sales includes the cost of equipment sold and the cost of capacity for internet and wholesale minutes associated with the revenue recognized within the corresponding time period.

Payments to vendors for wholesale telecommunication minutes made prior to the delivery of service to customers are recorded as a prepaid. The prepaid balance as of December 31, 2007 is $695,007.



---

Advertising



The Company expenses advertising costs as incurred. Advertising expenses for the years ended December 31, 2007 and 2006 were $0 and $2,068, respectively.



Research and Development



Expenditures for telecommunication software development costs and research are expensed as incurred. Such costs are required to be expensed until the point that technological feasibility is established. The period between achieving technological feasibility and the general availability of such software has been short. Consequently, costs otherwise capitalized after technological feasibility is achieved are generally expensed because they are insignificant. The Company recorded research and development cost of $3,096,675 and $1,090,332 in the years ended December 31, 2007 and 2006, respectively, for development of software products.



Issuance of shares for service



The Company accounts for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable.



Income taxes



The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.



FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109 (FIN 48) requires the accrual of interest and potential penalties on unrecorded tax liabilities.  Interest and penalties are accounted for as tax expense.



Fair value of financial instruments



Statement of financial accounting standard No. 107, Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.



Basic and diluted net loss per share



Net loss per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), Earnings per share. SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for all periods presented has been  restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The company did not issue any options or warrants during the years ended December 31, 2007 and 2006.



Comprehensive Loss



SFAS No. 130, "Reporting Comprehensive Loss," establishes standards for the reporting and display of comprehensive income and its components in the financial statements. For the years ended December 31, 2007 and 2006, the Company does not have items that represented other comprehensive income and, accordingly, has not included in the statement of stockholders' equity the change in comprehensive loss.



Stock-Based Compensation



The Company adopted SFAS No. 123 (Revised 2004), Share Based Payment (SFAS No. 123R), under the modified-prospective transition method on January 1, 2007. SFAS No. 123R requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. Share-based compensation recognized under the modified-prospective transition method of SFAS No. 123R includes share-based compensation based on the grant-date fair value determined in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation, for all share-based payments granted prior to and not yet vested as of January 1, 2006 and share-based compensation based on the grant-date fair-value determined in accordance with SFAS No. 123R for all share-based payments granted after January 1, 2006. SFAS No. 123R eliminates the ability to account for the award of these instruments under the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and allowed under the original provisions of SFAS No. 123. Prior to the adoption of SFAS No. 123R, the Company accounted for our stock option plans using the intrinsic value method in accordance with the provisions of APB Opinion No. 25 and related interpretations.



There were no stock based compensations in the years ended December 31, 2007and 2006, respectively.



---

Segment Reporting



Statement of financial accounting standards No. 131, Disclosures about segments of an enterprise and related information (SFAS No. 131), which superseded statement of financial accounting standards No. 14, Financial reporting for segments of a business enterprise, establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographic areas and major customers. SFAS No. 131 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. The Company allocates its resources and assesses the performance of its sales activities based upon revenue by product line and services (see Note 10).



Recent Pronouncements



In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157), which is effective for fiscal years beginning after November 15, 2008. This statement defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. The Company does not expect the adoption of this statement to have a material effect on this consolidated financial position, results of operations or cash flows.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits all entities to choose, at a specified election date, to measure eligible items at fair value (the fair value option). This statement is effective for our fiscal year beginning December 30, 2007. The Company does not expect the adoption of this statement to have a material effect on its consolidated financial position, results of operations or cash flows.



In December 2007, the FASB issued SFAS No. 141(R), Business Combinations.  This statement replaces SFAS 141.  SFAS 141(R) expands the assets acquired and liabilities assumed which are measured at fair value as of the acquisition date, changes the method of recording contingent consideration and requires expensing of all acquisition-related costs as incurred. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. The Company does not expect the adoption of this statement to have a material effect on its consolidated financial position, results of operations or cash flows.



In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARP No, 51.  This statement replaces the term minority interest with noncontrolling interest and includes noncontrolling interest in the equity section of the financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company does not expect the adoption of this statement to have a material effect on this consolidated financial position, results of operations or cash flows.



In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.  SFAS No. 161 amends and expands the disclosure requirement of SFAS No. 133 to enhance the understanding of how the derivative instruments and related hedged items affect an entitys financial position, financial performance and cash flow.  The Company does not expect the adoption of this statement to have a material effect on this consolidated financial position, results of operations or cash flows.



---

3.

PRINCIPLES OF CONSOLIDATION



The accompanying consolidated financial statements include the accounts of Nettel Holdings, Inc., (the Company) and its 100% wholly-owned subsidiaries NetTel Globalcommunication, Inc. (NetTel), Entec Software, Inc (ENTEC) and IPXC, Inc. (IPXC).  All significant inter-company accounts and transactions have been eliminated in consolidation.



4.

PROPERTIES AND EQUIPMENT



Property and equipment at December 31, 2007 consisted of the following:



2007

Equipment

$  274,444

Software

8,615

Furniture and fixtures

3,082

Construction in progress

251,193

537,334

Less: accumulated depreciation & amortization

(255,921)

Property & Equipment (net)

$  281,413



Depreciation expense for the years ended December 31, 2007 and 2006 was $71,383 and $82,038 respectively.  Construction in progress includes $251,193 in equipment and related accessories.



5.

PAYROLL LIABILITIES



The Company has not paid a salary to its officer and has accrued $13,100 in payroll liabilities for the past three years. $4,616 in payroll tax liabilities are payable at December 31, 2007. $32,593 of the payroll liability balance was assumed by the Company from Bio Standard during the recapitalization transaction. As at December 31, 2007, $50,309 was accrued as payroll liabilities.



6.

NOTES PAYABLE-CURRENT



In June 2006, the Company borrowed $225,000 from an individual for working capital.  The note was due on July 1, 2007, is unsecured and has an annual interest rate of 12% on the unpaid principal balance. The Company repaid $60,000 on the principal balance in August 2007 and is in process of renewing the terms, and hence, the note has been classified as a current liability.



In January 2007, the Company issued 41,000 shares of Common Stock with a value of $8,610 (see Note 7) to repay a note payable of $22,000 and the accrued interest payable of $14,762.  A $28,152 gain on extinguishment of debt was recorded for the three-month period ended March 31, 2007.



Interest expense for these notes for the years ended December 31, 2007 and 2006 was $24,546 and $15,498 respectively.



7.

STOCKHOLDERS' EQUITY



In January 2006, the Company issued 1,133,334 shares of Common Stock to consultants for engineering services for a combined value of $176,900.  In April 2006, the Company issued 1,000,000 shares of Common Stock to a consultant for engineering services for a combined value of $105,000.  In August 2006, the Company issued 1,500,000 shares of Common Stock to a consultant for engineering services for a combined value of $150,000; and in December 2006, the Company issued 2,420,000 shares of Common Stock to consultants for engineering and marketing services for a combined value of $278,300. The valuation of shares was based upon market value of the shares at the time of the consummation of the transaction.



In January 2007, the Company issued 1,548,000 shares of Common Stock to consultants for services for a combined value of $169,830 and 41,000 shares of Common Stock with a value of $8,610 to repay a note payable and related interest payable (see Note 6). In February 2007, the Company issued 1,027,500 shares of Common Stock to consultants for services for a combined value of $655,150. In March 2007, the Company issued 1,854,715 shares of Common Stock to consultants for services for a combined value of $1,064,885.



In April 2007, the Company issued 2,427,000 shares of Common Stock to consultants for services for a combined value of $1,428,570 and 1,300,000 shares of Common Stock with a combined value of $793,000 as a deposit for the purchase of computer equipment. In May 2007, the Company issued 319,071 shares of Common Stock to consultants for services for a combined value of $161,571. In June 2007, the Company issued 605,000 shares of Common Stock to consultants for services for a combined value of $ $302,600 and 1,000,000 shares of Common Stock with a value of $520,000 as a deposit on the purchase of computer and other equipment. In September 2007, the Company issued 1,670,000 shares of Common Stock to consultants for services for a combined value of $651,300. In December 2007, the Company issued 60,000 shares of Common Stock to consultants for services for a combined value of $10,800. The valuation of shares was based upon market value of the shares at the time of the consummation of the transaction.



The 2,300,000 shares of Common Stock issued on April 16, 2007 and June 5, 2007, is a security deposit on the purchase of equipment with the vendor while the vendor sources and assembles the computer systems.  When the Company has made full payment for all installed equipment, the security deposit will be returned to the Company.  The $1,313,000 value of the shares is recorded as contra equity on the balance sheet.

---





8.

INCOME TAXES



For federal income tax purposes, the Company has available net operating loss carryforwards of approximately $10,876,000 and $6,786,000 for the years ended December 31, 2007 and 2006, respectively. The federal net operating loss carryforwards expire through 2027 and are available to offset future income tax liabilities. The state net operating loss carryforwards expire through 2022 and are available to offset future income tax liabilities.



Deferred tax assets are comprised of the following at December 31, 2007:





December 31,

2007



Allowance for doubtful accounts

$       40,900

Unpaid liabilities

17,875

Net operating loss carryforwards

4,099,400

4,158,175

Valuation Allowance

(4,158,175)

Net deferred taxes

$            -







December 31,

2007



Income tax expense (benefit) for the years ended December 31, 2007 is summarized as follows:



|                             |   | 2007        | 
|---------------------------- | - | ----------- | 
|Current:                     |   |             | 
|Federal                      | $ | (1,287,200) | 
|State                        |   | (270,000)   | 
|Deferred taxes               |   | 8,100       | 
|Valuation allowance          |   | 1,549,100   | 
|Income tax expense (benefit) | $ | -           | 



The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Consolidated Statements of Operations:



December 31,

December 31,

2007

2006





Tax expense (credit) at statutory rate-federal

(34.0%)

(34.0%)

State tax expense (credit) net of federal tax

(4.4)

(4.4)

Graduated federal rate

0.3

1.5

Valuation allowance

38.1

36.9



Tax expense at actual rate

-

-       _





9.

EMPLOYEE BENEFIT PLANS



The 2003 Employee Benefit Plan (the Plan) adopted by the Board of Directors on April 30, 2003, provides for the granting of either a stock award or non-qualified stock options to purchase shares of the Companys Common Stock to employees, officers, directors and consultants of the Company.  Information relating to the Plan during 2007 and 2006 is as follows:



|                                                                   | Shares     
|------------------------------------------------------------------ | -----------
|Balance of shares available to issue or grant at December 31, 2005 | 144,854    
|Shares reserved and registered under Form S8 during 2006           | 3,400,000  
|Shares issued during 2006                                          | -          
|Options granted during 2006                                        | -          
|Balance of shares available to issue or grant at December 31, 2006 | 3,544,854  
|Shares reserved and registered under Form S8 during 2007           | -          
|Shares issued during 2007                                          | (3,256,286)
|Options granted during 2007                                        | -          
|Balance of shares available to issue or grant at December 31, 2007 | 288,568    



On February 15, 2001, the Company adopted a 2001 Stock Option Plan (the Option Plan) for employees, officers, directors and consultants. Information relating to the Plan is as follows:



|                                      |                          |   |                                
|------------------------------------- | ------------------------ | - | -------------------------------
|                                      | Shares subject to option |   | Weighted Average Exercise price
|Options outstanding December 31, 2005 | 700                      | $ | 225.00                         
|Options exercised                     | -                        | $ | -                              
|Options cancelled                     | -                        | $ | -                              
|Options issued                        | -                        | $ | -                              
|Balance, December 31, 2006            | 700                      | $ | 225.00                         
|Options exercised                     | -                        | $ | -                              
|Options cancelled                     | (700)                    | $ | -                              
|Options issued                        | -                        | $ | -                              
|Balance, December 31, 2007            | -                        | $ | -                              



---



10.

SEGMENTS



The Company has two reportable segments consisting of (1) Equipment Sales and (2) Telecommunications long distance and prepaid calling card minutes. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on sales, gross profit margins and operating profit before income taxes.  Unallocated assets and loss from continuing operations are primarily related to software development in the ENTEC subsidiary.



The following is information for the Companys reportable segments for the years ended December 31, 2007 and 2006:



|                                                                         |                   |                            |               |              
|------------------------------------------------------------------------ | ----------------- | -------------------------- | ------------- | -------------
|(in thousands)                                                           | Equipment Segment | Telecommunications Segment | Unallocated   | Total        
|                                                                         |                   |                            |               |              
|Revenue
2007
2006                                                        | $   0
347         | $21,505
7,486              | $       0
0   | $21,505
7,833
|Gross margin
2007
2006                                                   | 0
172             | 1,087
530                  | 0
0           | 1,087
702    
|Depreciation and amortization
2007
2006                                  | 0
0               | 71
82                      | 0
0           | 71
82        
|Profit (Loss) from continuing operations before interest & tax
2007
2006 | 0
169             | (991)
(689)                | (3,189)
(248) | (4,180)
(768)
|Interest expense
2007
2006                                               | 0
16              | 0
0                        | 0
250         | 25
16        
|Identifiable assets
2007
2006                                            | 0
0               | 1,013
455                  | 224
133       | 1,237
588    
|Capital expenditures
2007
2006                                           | 0
0               | 254
2                      | 0
0           | 254
2        
|                                                                         |                   |                            |               |              





11.

MAJOR CUSTOMERS



For the year ended December 31, 2007, four customers provided 49%of the net revenues and four suppliers provided 72% of the cost of goods sold. For the year ended December 31, 2006, two customers provided 29% of the net revenues and two suppliers provided 31% of the cost of goods sold. The receivable balances due from the customers were $0 and $6,005 at December 31, 2007 and 2006, respectively. The Company extends credit to its customers based upon its assessment of their credit worthiness and generally does not require collateral.  The accounts payable balances due to the suppliers were $36,481 and $0 at December 31, 2007 and 2006, respectively.



12.

COMMITMENTS



In June 2006, the Company entered into a three year lease for office and warehouse space in Portland, Oregon. In May 2007, the Company entered into a two year lease for office space in Beaverton, Oregon and negotiated a termination of the Portland lease for a one-time fee of $25,000 which in included in the total rent expense of $59,291 for fiscal 2007. Lease commitments are as follows:



2008

21,648

2009

9,020



13.

GOING CONCERN



The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has accumulated deficit of $11,144,484 including net losses of $4,176,773 and $783,527 for the years ended December 31, 2007 and 2006, respectively.  In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Companys ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



Management has taken various steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue on in the subsequent year. Management devoted considerable effort during the year ended December 31, 2007, towards management of liabilities and improving the operations. The management believes that these actions will allow the Company to continue its operations through the next fiscal year.



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



None



---



PART III



ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS



The following sets forth certain information with respect to directors and executive officers of the Company.



|                                       |          |                                                                  
|-------------------------------------- | -------- | -----------------------------------------------------------------
|Name                                   | Age      | Position with the Company                                        
|Michael Nguyen
Tyroe Chhim
Larry Olson | 37
40
57 | President, Chief Financial Officer and Director
Director
Director



Directors serve for a term of one year or until their successors are elected and qualified. Executive officers are appointed by and serve at the will of the Board of Directors. Each of the officers serves at the discretion of the Board of Directors.



At a board meeting on May 1, 2003 duly held and called, Tam Bui and Tina Phan were elected to the board of directors by majority vote of the board of directors. Following the election of Mr. Bui and Ms. Phan to the board of directors of the Company, Thomas J. Craft, Jr. and Richard Rubin submitted their resignation as directors and officers of the Company. At a board meeting on May 23, 2003 duly held and called, Michael Nguyen was elected to the board of directors and In June 2003, Ms. Phan submitted her resignation as an officer and a director of the Company.  In August 2004, Mr. Bui submitted his resignation as a director of the Company. The current board of directors of the Company consists of Michael Nguyen, Chairman.



Michael Nguyen, President and Chairman



Mr. Nguyen holds a Bachelor of science degree from Portland State University; he also served six years in the Oregon Army National Guard. Mr. Nguyen has over 10 years experience in the telecommunications industry. He founded NetTel Globalcommunication Inc. in 1999 and has served as its chief executive officer since the Company was founded.



Tyroe Chhim, Director



Mr. Chhim holds a Bachelor of Science degree from Portland State University.  Mr. Chhim has over 12 years experience in the finance industry.  Since 1993, he has been in Corporate Cash/Treasury Management.  From 2000 to 2006, he owned the House of Asia restaurant chain.  Since 2007 to the present, he has been the President of Stoneleigh Investment.



Larry Olson, Director



Mr. Olson has a Business Degree and Engineering Degree.  In 1973, Mr. Olson started Olson Precast of Arizona, a multi million dollar company employing 130 people.  This venture spearheaded Olson Precast of Las Vegas, now owned by Mr. Olson's son.  Mr. Olson also created and developed Olson Precast, Nevada which is also a multimillion dollar company with over 100 employees.   From 2002 to 2005, Mr. Olson was part owner and director of the Phoenix National Bank until it was sold to Northern Trust.  Presently, he is serving as Director of Azco Mining, a public company,   He became a director in 1999 and has held position of Chairman since 2000.  Mr. Olson  was also President and CEO until October 2003.  As of 2007, he has also served as Director of Providential Holdings, a public company, and Education 20/20 a private company from 2004 to 2006.  Since 2005, Mr. Olson is also Chairman and founding Director of LoveWorks International, an African Non-Governmental Organization which oversees the operation of New Hope Orphanage and school. New Hope provides a home and education to 800 children who have lost a parent to AIDS.





ITEM 10.    EXECUTIVE COMPENSATION



The following table sets forth compensation earned by the Companys executive officer:



|N


Name and Principal Position                       | Year | Salary
($) | Bonus
($) | Stock
Awards
($) | Option
Awards
($) | Non-Equity Incentive Plan Compensation
($) | All other
Compen
sation
($) | Total
($)
|----------------------------------------------------- | ---- | ---------- | --------- | ---------------- | ----------------- | ------------------------------------------ | --------------------------- | ---------
|                                                      |      |            |           |                  |                   |                                            |                             |          
|Michael Nguyen, President and Chief Executive Officer | 2007 | 0          | 0         | 0                | 0                 | 0                                          | 0                           | 0        
|2006                                                  | 0    | 0          | 0         | 0                | 0                 | 0                                          | 0                          
|2005                                                  | 0    | 0          | 0         | 0                | 0                 | 0                                          | 0                          



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ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth information, as of March 31, 2007, with respect to the number of shares beneficially owned by individuals, directors and officers and by all directors and officers of the Company as a group, and by persons known to own more than 5% of the Company's shares.



|                                                                                    |                           |           
|----------------------------------------------------------------------------------- | ------------------------- | ----------
|Name and Address of Beneficial Owner                                                | Number of Shares Held (1) | Percentage
|Michael Nguyen, President and Chairman
4701 NE Portland Hwy, Portland, Oregon 97218 | 10,596,290                | 19.7%     



(1) Based upon shares 53,679,833 issued and outstanding as of March 31, 2008.





(B) Compliance with Section 16(a) of the Exchange Act



Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's officers and directors, and persons who own more that ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and with any exchange on which the Company's securities are traded. Officers, directors and persons owning more than ten percent of such securities are required by Commission regulation to file with the Commission and furnish the Company with copies of all reports required under Section 16(a) of the Exchange Act. Based solely upon its review of the copies of such reports received from officers, directors and greater than ten percent shareholders, the Company reports the following failures to file reports under Section 16(a) of the Exchange Act:



|                                                                            |                                                 |                                
|--------------------------------------------------------------------------- | ----------------------------------------------- | -------------------------------
|Name                                                                        | Beneficial Owner of class of Securities (%) (1) | Forms filed under Section 16(a)
|Michael Nguyen, President
610 SW Broadway, Suite 405
Portland, Oregon 97205 | 19.7%                                           | Form 5                         
|Tran Le
536 Widgeon Lane
Bloomingdale, IL  30108                            | 5.6%                                            | SC -13G                        

(1) Based upon shares 53,679,833 issued and outstanding as of March 31, 2008.



ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

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PART III



ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits



Exhibit No.

Description

3(i)

Articles of Incorporation (filed as an exhibit to Form 10-SB/12g on June 9, 1999)

3(i)

Articles of Incorporation, as amended, previously filed

3(ii)

By-laws (filed as an exhibit to Form 10-SB/12g on June 9, 1999)

31.1

Rule 13a-14a/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32.1

Section 1350 Certification of Chief Executive Officer and Chief Financial Officer



(b) Reports on Form 8-K

None





ITEM 14.    CONTROL AND PROCEDURES

As required by SEC rules, we have evaluated the  effectiveness of the design and operation of our  disclosure  controls and  procedures  at the end of the period covered by this report.  This  evaluation was carried out under the  supervision and with the participation of our management,  including our principal executive officer  and  principal  financial  officer.  Based  on this  evaluation,  these officers have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial  reporting or in other factors that have materially affected,  or are reasonably  likely to materially  affect,  our internal  control over  financial reporting. 
Disclosure  controls and procedures are our controls and other  procedures  that are designed to ensure that  information  required to be disclosed by us in the reports that we file or submit  under the  Exchange Act is recorded,  processed, summarized  and reported,  within the time periods  specified in the SEC's rules and forms.  Disclosure  controls and  procedures  include,  without  limitation, controls  and  procedures  designed  to ensure that  information  required to be disclosed  by us in  the  reports  that  we  file  under  the  Exchange  Act  is accumulated and communicated to our management,  including  principal  executive officer  and  principal  financial  officer,  as  appropriate,  to allow  timely decisions regarding required disclosure.

---



SIGNATURES



In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.



Nettel
Holdings, Inc.

Date: May  , 2008



/s/ Michael Nguyen, President

Michael Nguyen, Chief Executive Officer and Chairman



---



Exhibit 31.1



Pursuant to the requirements of Rule 13a-14 of the Securities Exchange Act of 1934, as amended, provides the following certification.

I, Michael Nguyen, President, Chief Financial Officer and Director of Nettel Holdings, Inc. ("Company"), certify that:



1.

I have reviewed this annual report on  Form 10-KSB of Nettel Holdings, Inc.;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The other directors and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.



Date: May
14, 2008



/s/ Michael Nguyen

Michael Nguyen, President, Chief Financial Officer and Director



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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Nettel Holdings, Inc. on Form 10-KSB for the year ending December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael Nguyen, President and Chairman of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael Nguyen

Michael Nguyen

President and Chief Financial Officer

May  14, 2008